# WELFARE ASSOCN. A.R.P., MAHARASHTRA AND ANR. ETC. ETC v. RANJIT P. GOHIL AND ORS. ETC. ETC

- **Citation:** [2003] 2 S.C.R. 139
- **Court:** Supreme Court of India
- **Decided:** 2003-02-18
- **Case number:** Civil Appeal No. 5168 of 1998
- **Bench:** R.C. Lahoti, Brijesh Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/welfare-assocn-a-r-p-maharashtra-and-anr-etc-etc-v-ranjit-p-gohil-and-ors-etc-18906
- **Pages:** 41

## Headnote

A
B
Bombay Rents, Hotel, Lodging House Rates Control, Bombay, Land
Requisition and Bombay Government Premises (Eviction) (Amendment) Act, C
1996-Act amending certain provisions of Bombay Rents, Hotel and Lodging
House Rates (Control) Act, 1947, Bombay Land Requisiiion Act, 1948 and
Bombay Government Premises (Eviction) Act, 1955-Altering the basis of
occupation of premises by occupants and declaring that requisitioning shall
come to an end-Constitutional validity of-Held: The Act is intra vires the
Constitution and thus valid.
D
Constitution of India, 1950:
Article 246, Entries 6, 7, 13 of List 111 and Entry 18 of List 11 of Seventh
Schedule-Legislative competence-Held: Power of the State Legislature is to
legislate in respect of landlord and tenant found in entries 6, 7 and 13 of List- E
111 of the Seventh Schedule-No voluntary transfer of property between owners
and allottees-State Government in exercise of its power of eminent domain
requisitioned the properties in public interest and allotted to occupants and
paid compensation-Also privily of estate was compulsorily converted into
privily of contract-Thus within the legislative competence of the StateF
Bombay Rents, Hotel, Lodging House Rates Control, Bombay, Land Requisition
and Bombay Government Premises (Eviction) (Amendment) Act, 1996.
Articles 245 and 246-Amending Act is merely placing additional
restrictions on the right of the owners to seek eviction of the premises, thus
is neither in conflict with the judgments of Supreme Court nor a piece of G
colourable legislation-Bombay Rents, Hotel, Lodging House Rates Control,
Bombay, Land Requisition and Bombay Government Premises (Eviction)
(Amendment) Act, 1996.
Article 246, Schedule Vll:
139
H
140
SUPREME COURT REPORTS
(2003] 2 S.C.R.
~
A
Enactment challenged with reference to entries in Schedule VII-Held:
In such cases it is necessary to examine the pith and substance of the Act.
Legislative entries-Interpretation of-Held: Entries should be widely
...
interpreted making them meaning/UI and effective-Transgression into the
B
field of another entry placed in another list is to be avoided-Interpretation
of statutes.
Articles 141, 245 and 246-Enactment of /aw-Competency of-Held:
Legislature can enact a law, subject to its legislative competence, which will
withdraw or fundamentally alter the very basis on which a judicial
c
pronouncement has proceeded and create a situation which if it had existed
. .....,.,
earlier, the Court would not have made the pronouncement.
Article 14-Reasonab/e classification-Validity of-Held: Legislation
enacting a law interJding to apply to or benefit the 'well defined class'-
premises whose occupants are under threat of eviction, thus not violative of
D Article 14-Bombay Rents, Hotel, Lodging House Rates Control, Bombay,
Land Requisition and Bombay Government Premises (Eviction) (Amendment)
Act, 1996.
Doctrines:
E
Doctrine of colourable legislation and doctrine of Pith and SubstanceDiscussed
~
Paucity of accommodation and severe population and habitation
conditions in Bombay led to enactment of Bombay Rent Restriction Act
-->
1939 .. This was followed by Bombay Rents, Hotel Rates and Lodging
F Houses Rates (Control) Act, 1944. Both these acts were repealed and
Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 was
enacted to amend and consolidate the law relating to control of rents and
repairs of premises, rates of hotels and lodging houses, evictions and
charges for licenses of premises etc. There was lot of pressure of
accommodation in the State and thus, Bombay Land Requisition Act, 1948
G was enacted to provide for requisition of land which was to continue upto
31.3.1950. Due to shortage of accommodation requisition properties
continued under requisition for endless period of time and also the Act
was amended from time to time. In H.D. Vora v. The State of Maharashtra*
this Court struck down the requisition and directed derequisitioning of
H the flats. Thereafter the derequisi

## Text

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WELFARE ASSOCN. A.R.P., MAHARASHTRA
AND ANR. ETC. ETC.
v.
RANJIT P. GOHIL AND ORS. ETC. ETC.
FEBRUARY 18, 2003
[R.C. LAHOTI AND BRIJESH KUMAR, JJ.]
A
B
Bombay Rents, Hotel, Lodging House Rates Control, Bombay, Land
Requisition and Bombay Government Premises (Eviction) (Amendment) Act, C
1996-Act amending certain provisions of Bombay Rents, Hotel and Lodging
House Rates (Control) Act, 1947, Bombay Land Requisiiion Act, 1948 and
Bombay Government Premises (Eviction) Act, 1955-Altering the basis of
occupation of premises by occupants and declaring that requisitioning shall
come to an end-Constitutional validity of-Held: The Act is intra vires the
Constitution and thus valid.
D
Constitution of India, 1950:
Article 246, Entries 6, 7, 13 of List 111 and Entry 18 of List 11 of Seventh
Schedule-Legislative competence-Held: Power of the State Legislature is to
legislate in respect of landlord and tenant found in entries 6, 7 and 13 of List- E
111 of the Seventh Schedule-No voluntary transfer of property between owners
and allottees-State Government in exercise of its power of eminent domain
requisitioned the properties in public interest and allotted to occupants and
paid compensation-Also privily of estate was compulsorily converted into
privily of contract-Thus within the legislative competence of the StateF
Bombay Rents, Hotel, Lodging House Rates Control, Bombay, Land Requisition
and Bombay Government Premises (Eviction) (Amendment) Act, 1996.
Articles 245 and 246-Amending Act is merely placing additional
restrictions on the right of the owners to seek eviction of the premises, thus
is neither in conflict with the judgments of Supreme Court nor a piece of G
colourable legislation-Bombay Rents, Hotel, Lodging House Rates Control,
Bombay, Land Requisition and Bombay Government Premises (Eviction)
(Amendment) Act, 1996.
Article 246, Schedule Vll:
139
H
140
SUPREME COURT REPORTS
(2003] 2 S.C.R.
~
A
Enactment challenged with reference to entries in Schedule VII-Held:
In such cases it is necessary to examine the pith and substance of the Act.
Legislative entries-Interpretation of-Held: Entries should be widely
...
interpreted making them meaning/UI and effective-Transgression into the
B
field of another entry placed in another list is to be avoided-Interpretation
of statutes.
Articles 141, 245 and 246-Enactment of /aw-Competency of-Held:
Legislature can enact a law, subject to its legislative competence, which will
withdraw or fundamentally alter the very basis on which a judicial
c
pronouncement has proceeded and create a situation which if it had existed
. .....,.,
earlier, the Court would not have made the pronouncement.
Article 14-Reasonab/e classification-Validity of-Held: Legislation
enacting a law interJding to apply to or benefit the 'well defined class'-
premises whose occupants are under threat of eviction, thus not violative of
D Article 14-Bombay Rents, Hotel, Lodging House Rates Control, Bombay,
Land Requisition and Bombay Government Premises (Eviction) (Amendment)
Act, 1996.
Doctrines:
E
Doctrine of colourable legislation and doctrine of Pith and SubstanceDiscussed
~
Paucity of accommodation and severe population and habitation
conditions in Bombay led to enactment of Bombay Rent Restriction Act
-->
1939 .. This was followed by Bombay Rents, Hotel Rates and Lodging
F Houses Rates (Control) Act, 1944. Both these acts were repealed and
Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 was
enacted to amend and consolidate the law relating to control of rents and
repairs of premises, rates of hotels and lodging houses, evictions and
charges for licenses of premises etc. There was lot of pressure of
accommodation in the State and thus, Bombay Land Requisition Act, 1948
G was enacted to provide for requisition of land which was to continue upto
31.3.1950. Due to shortage of accommodation requisition properties
continued under requisition for endless period of time and also the Act
was amended from time to time. In H.D. Vora v. The State of Maharashtra*
this Court struck down the requisition and directed derequisitioning of
H the flats. Thereafter the derequisitioning was upheld by this Court in
WELFARE ASSOCN. A.R.P., MAHARASHTRA"· RANJ!T P. GOH!L
141
Grahak Sanstha Manch v. The State of Maharashtra case*. However by A
virtue of interim order the aHottees in requisitioned premises continued .
in occupation which stood vacated and Court allowed time till 30.11.1994
to derequisition such properties. The period of requisition was to expire
on 31.12.1994. Several persons were in the requisitioned accommodation
and the Government was facing difficulties ou account of paucity of funds B
and ever rising prices in constructing alternative accommodation to
accommodate Government employees in service and others. Ordinance of
1994 was then issued and the period of requisition was extended.
Subsequently the Ordinance was replaced by the Maharashtra Act No VII
of 1995. Thereafter the derequisitioning process was completed. However
many premises continued under requisitioning including the premises C
allotted to government servants. As such certain provisions of Bombay
Rents, Hotel and Lodging House Rates (Control) Act, 1947, Bombay Land
Requisition Act, 1948 and Bombay Government Premises (Eviction) Act,
1955 were amended and Ordinance of 1996 was promulgated which was
later replaced by the Bombay Rents, Hotels, Lodging House Rates Control, D
Bombay Land Requisition and Bombay Government Premises (Eviction)
(Amendment) Act, 1996. Amending Act declared that the requisitioning
shall come to an end and conferred the status of tenants to the occupants
under the owners who would become the landlords and the amount of
compensation shall become rent and also the time to vacate was extended.
Respondent-owners challenged the constitutional validity of the Act. High E
Court struck down the Act as ultra vires· the Constitution. Hence the
present appeals by State of Maharashtra, the Welfare Association of
Allottees of Requisitioned Premises, Maharashtra and others.
Respondents-owners contended that within the meaning of entries 6
and 7 of List-III of the Seventh Schedule to the Constitution a law dealing F
with any existing transfer of property or an existing contract can be
enacted and the legislation cannot by itself create a transfer of property
or bring a contractual relationship in existence; that the owners have not
transferred any property in the premises to the occupants nor does any
contractual relationship exist between the owners and the occupants on G
the date of coming into force of the Amending Act and, therefore, the
Amending Act cannot be said to be a law governing transfer of property
or contract and hence does not fall within the purview of entries 6 and 7;
that the impugned judgment has the effect of nullifying· or overriding the
mandate of this Court issued in H.D. Vora and Grahak Sanstha Manch cases
which could not have been done directly but was sought to be done H
"1(
142
SUPREME COURT REPORTS
[2003) 2 S.C.R.
A Indirectly by resorting to amendment which is colourable exercise of
legislative power.
Allowing the appeals, the Court
HELD: I. The Bombay Rents, Hotels, Lodging House Rates Control,
B Bombay Land Requisition and Bombay Government Premises (Eviction)
(Amendment) Act, 1996 is intra vires the Constitution and the impugned
judgement is unsustainable and liable to be reversed. (178-F)
2.1. In every case where the legislative competence of a Legislature
in regard to a particular enactment is challenged with reference to the
C entries in the various Lists, it is necessary to examine the pith and
substance of the Act and to find out if the matter comes substantially
within an item in the List. The express words employed in an entry would
necessarily include incidental and ancillary matters so as to make the
legislation effective. The scheme of the Act under scrutiny, itS object and
D purpose, its true nature and character and the pith and substance of the
legislation are to be· focused at. It is a fundamental principle of
Constitutional Law that everything necessary to the exercise of a power
is included in the grant of the power. (161-H; 162-A, BJ
2.2. The expression •transfer of property' in entry 6 and the term
E 'contracts' in entry 7 of List -III are to be widely interpreted. Such wide
meaning has to be assigned to the said expression and term as would make
the entries meaningful and effective. The entries must certainly take colour
from the Directive Principles of State Policy in Articles 38 and 39 of the
Constitution. There was no voluntary transfer of property by the owners
or property in favour of the occupant-allottees of the premises. The State
F Government in exercise of its power of eminent domain, recognized
statutorily, had requisitioned the properties in public interest and allotted
to the occupants. The Government paid compensation to the owners. Out
of the requisitioned premises some were occupied by State itself. As to the
premises which were allotted, the allottees in occupation were liable to pay
G compensation in lieu of their occupation of the premises. There was no
privity of contract between the owners and the occupants, yet a privity of
estate was brought into being by acts of State supported by law. Possession
is nine points in law and to that extent a transfer of property had resulted
and brought into being. Such privity of estate was compulsorily converted
into privity of contract by operation of law as a consequence of the
H impugned Amending Act. The Act also provided civil procedure by which
WELFARE ASSOCN. A.R.P, MAHARASHTRA v. RANJ!T P. GOHIL
143
the landlords were entitled to snap the relationship of landlord and tenant A
deemingly created by the statute and seek eviction subject to making out
a ground therefor under the pre-existing Rent Control Legislation.
Therefore, such legislation would clearly fall within the purview of entries
6,7 and 13 of List-III. (164-H; 165-A-D[
2.3. A grim and emergent situation was created on account of threat B
posed before the likely evictees who were in occupation of requisitioned
premises. The impugned Amending Act also seeks to bring into effect a
scheme of equitable redistribution of wealth and shelter so as to protect
the licencee-occupants by giving them the status of tenant and regulating
the right to eviction exercisable by the landlords by making it conditional C
upon availability of grounds under a pre-existing rent control law already
governing similar properties in the city of Bombay. The statutory goal
'from each according to his capacity, to each according to his needs' was
sought to be achieved. The essential need of shelter for other segments of
society such as the State Administration, Semi-Government bodies, PSUs
and the likes were also protected in public interest as otherwise their D
activities would have been jeopardized, which in turn would have had an
adverse effect on the society. Thus, if any grey area of impugned amending
Act is left out uncovered by entries 6,7 and 13 of List-III it is covered by
entry 18 of List-II i.e. 'economic and social planning'. Therefore, the
impugned Amending Act is intra vires and within the legislative competence
of the State Legislature. (166-H; 167-;\-CJ
E
*H.D. Vora v. The State of Maharashtra and Ors., 11984) 2 SCC 337;
*Grahak Sanstha Manch and Ors. v. The State of Maharashtra, (1994) 4 SCC
192; Accountant and Secretarial Services (P) Ltd and Anr. v. Union of India and
Ors., (1988) 4 SCC 324; Dhanapal Chettiar.v. Yesodai Ammal, 11979) 4 SCC
214; lndu Bhusan Bose v. Rama Sundari Debi and Anr., 11970) 1 SCR 443; F
Chaturbhai M Patel v. Union of India and Ors., (1960) 2 SCR 362; Diamond
Sugar Mills Ltd and Anr. v. State of Uttar Pradesh and Anr., 11961) 3 SCR 242;
Synthetics and Chemicals Ltd etc. v. State of UP. and Ors., 11990) 1 SCC 109;
United Provinces v. Mt. Atiqa Begum and Ors., AIR (1941] FC 16; Lingappa
Pochanna Appealwar v. State of Maharashira and Anr., (1985) 1 SCC 479 and G
Maneklal Chhotalal and Ors. v. M G. Makwana and Ors, referred to.
Prout v. Hunter, (1924) 2 KB 736; Property Holding Co. Ltd. v. Clark,
(1948( 1 KB 630 and Curl v. Angale and Anr., (1948) 2 All England Reports
189, referred to.
Principles of Statutory Interpretation by Justice G.P. Singh (Eighth· H
144
SUPREME COURT REPORTS
(2003) 2 S.C.R.
A Edition, 2001, pp. 36, 453,454), referred to.
3.1. It is permissible for the Legislature, subject to its legislative
competence otherwise, to enact a law which will withdraw or
fundamentally alter the very basis on.which a judicial pronouncement has
proceeded and create a situation which if it had existed earlier, the Court
B would not have.made the pronouncement. [169-H; 170-AJ
3.2. The law enunciated by this Court in H.D. Vora and Grahak
Sanstha Man~h* cases was that the Executive was exercising power of
requisitioning the premises in such a manner that the premises were in
fact acqu_ired under the guise or pretext of requisitioning. It was a
C colourable and hence a ma/a fide exercise of its executive power by the
State, thus was struck down by this Court as ultra vires the Constitution.
As' a consequence such invalid requisitioning came to an end. It followed
as a natural corollary .that the premises in occupation of the allottees
became liable to be restored to the possession of the owners. By virtue of
D interim orders passed by the Court, the possession of the occupants was
protected and that protection was continuously enjoyed by the occupants
upto the date of the decision. To relieve the occupants from the hardship
of sudden eviction caused by its judicial pronouncement, the Court allowed
some more time to the occupants by directing the protection under the
interim orders of the Court to remain in operation for some more period
E of time in spite of the cases having been disposed of. Allowing time to
vacate the premises under the protection of the interim orders is not the
same thing as issuing mandamus to vacate the premises by certain date.
[173-C-F)
3.3. The impugned Amending Act fundamentally altered the very
F basis of occupation of the premises by the occupants. Instead of their
remaining in occupation by virtue of orders of allotment of requisitioned
premises, the Act declared that the requisitioni,ng shall come to an end
and the occupants shall become tenants under the owners who would
become the landlords and the amount of compensation shall become rent.
G Right of landlords to seek revision of rent was not taken away but became
subject to the provisions governing the standard rent or controlled rent
determinable by the competent authority under the Rent Control
Legislation by which the relationship of the owners and the occupants was
to be governed henceforth as one of landlord and tenant. The right of the
owners to seek eviction of occupants and have the premises restored to
H their possession was also not taken away but was made subject to the pre-
WELFAREASSOCN. A.R.P., MAHARASHTRA v. RANJITP. GOHIL
145
existing law governing eviction of tenants. Privity of estate ·was converted A
into privity of contract and the foundation for pre-existing transfer of
property underwent a fundamental change. (173-F, G, H; 174-C, DJ
3.4. The Statement of Objects and Reasons of the Bombay Rents,
Hotel, Lodging House Rates Control, Bombay Land Requisition and
Bombay Government Premises (Eviction) (Amendment) Act, 1996 makes B
a reference to the two decisions delivered by this Court but that Is only
by way of narration of facts. The judgments of this Court are nowhere
referred to in the body of the provisions introduced by the Amendment
Act so as to spell out any motive of overruling the judgment. (174-F, G)
3.5. Merely because the indirect effect of the amendment would be to C
place additional restrictions on the right of the owners to seek eviction of the
premises consequent upon the judgment of this Court, it cannot be held that
the Legislature has overruled the judgment of this Court or made an inroad
on the doctrine of separation of powers. If the Amendment Act had been
enacted on the dates of decision in HD. Vora 's case or Grahak Sanstha Manch D
case, the Court would not have been called upon to adjudicate upon and
invalidate the unreasonably stretched requisitioning providing cloak for
acquisition without adequate compensation and the occupants would have
been held protected as tenants under the Rent Act. Thus, the Bombay Rents,
Hotels, Lodging House Rates Control, Bombay Land Requisition and Bombay
Government Premises (Eviction) (Amendment) Act, 1996 is neither in conflict . E
with the HD. Vora 's case or Grahak Sanstha Manch case of nor can it be said
to be a piece of colourable legislation. [175-F-HJ
HD. Vora v. The State of Maharashtra anc/ Ors., (1984) 2 SCC 337;
Grahak Sanstha Manch and Ors. v. The State of Maharashtra, (1994) 4 SCC F
192; Dhanapal Chettiar v. Yesodai Ammal, (1979) 4 SC 214; K.C. Gajapati
Narayan Deo and Ors. v. State of Orissa, [1954) SCR l; R.S. Joshi, S.T.O. v.
Ajit Mills Ltd., (1977) 4 SCC 98; Naga People's Movement of Human Rights
v. Union of India, [1998) 2 SCC 109; Shri Prithvi Cotton Mills Ltd. v. Broach
Borough Municipality and Ors., (1969) 2 SCC 283; Indian Aluminium Co.
and Ors. v. State of Kera/a and Ors., [1996) 7 SCC 637 and State of Tamil G
Nadu v. Arroran Sugars Ltd., (1997) 1 SCC 326, referred to.
Calley's Constitutional Limitations Vol. I, p.379, referred to.
4.1. Article 14 of the Constitution permits reasonable ·classification
for the purpose of legislation and prohibits class legislation. A legislation H
146
SUPREME COURT REPORTS
[2003] 2 S.C.R.
A intended to apply or benefit a "well defined class" is not open to challenge
by reference to Article 14 on the ground that the same does not extend a
similar benefit or protection to other persons. Permissible classification
must be founded on an intelligible differential, which distinguishes persons
or things grouped together from others left out of the class, and such
B differential must have a rational relation with the object sought to be
achieved by the legislation. It is difficult to expect the Legislature carving
out a classification which may be scientifically perfect or logically complete
or which may satisfy the expectations of all concerned still the court would
respect the classification dictated by the wisdom of Legislature and shall
interfere only on being convinced that the classification would result in
C pronounced inequality or palpable arbitrariness on the touchstone of
Article 14. [177-C-F)
4.2. The requisitioning did not solve the problem of shortage of
accommodation but continued to persist resulting in endless renewals of
requisitioning which was held by this Court to be vitiated on account of
D virtual acquisitioning without payment of compensation resulting from
recurring and non-intermittent cycles of requisitioning and was struck
down. Consequent upon constitutional interpretation and adjudication by
this Court thousands of persons and substantial activity of government,
semi-government bodies and PSU's ran the risk of being rendered roofless.
E They all needed to be protected by State intervention and constituted a
class by themselves. All such premises whose occupants were under the
threat of eviction also constituted property capable of identification by a
well defined classification. The Legislature chose to step in and enact a
legislation, which would protect the threatened evictees from likely
eviction. The persons and premises-both constitute a well defined class by
F themselves and the classification cannot be said to be arbitrary; it is
capable of being distinguished from others not included in that class. Such
classification has an apparent and clear nexus with the object sought to
be achieved. Thus the impugned legislation does not suffer from either
arbitrariness or invidious discrimination and is not violative of Article 14.
of the Constitution. [177-H; 178-A-D)
G
Charan) it Lal Chowdhary v. Union of India and Ors., [1950) SCR 869;
Kishan Singh and Ors. v. State of Rajasthan and Ors., [1955) 2 SCR 531 and
Maneklal Chhotalal and Ors. v. MG. Makwana and Ors., (1967) 3 SCR 65,
referred to.
H
5. The reversal of the impugned judgment of the High Court and
I )-
WELFARE ASSOCN. A.R.P ., MAHARASHTRA v. RANJIT P. GOHIL [LAHOTI, J .]
J 4 7
upholding the validity of the impugned legislation shall not have the effect A
of undoing or overruling the mandate of this Court in Grahak Sanstha
Manch 's case that the occupants of requisitioned premises and the State
Government which were protected in Bombay and other large cities in
Maharashtra until 30.11.1994, and with effect from that date directed that
"all occupants of premises the continued requisition of which has been B
quashed" shall be bound to vacate and hand over vacant possession to the
State Government so that the State Government may on or before
31.12.1994 derequisition such premises and hand back vacant possession
thereof to the landlords. (178-G .. H; 179-A)
Grahak Sanstha Manch and Ors. v. The State of Maharashtra, [19941 4 C
sec 192, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5168 of 1998.
From the Judgment and Order dated 27.7.1998 of the Mumbai High
Court in W.P. No. 1886 of 1997.
WITH
C.A. Nos. 5169, 5170/98, 920/99, 2484/99, 1405-1407/2003, 5692,
5681-5691/98, 6145, 6146, 7879/2001, 4091/2002, 1408-1409/2003, 5334 of
2002.
Soli J. Sorabjee, Attorney General, and Altaf Ahmed, Additional Solicitor
D
E
General, A.J. Rana Shekhar ·Naphde, S.K. Dholakia, Yageshwar Prasad,
Bhargava V. Desai, Arun Pednekar, Ashim Sood, Anand Mishra, Sunil
Mathews, V.N. Raghupathy, Mahesh Agarwal, Alok Agarwal, Dipak Chitnis,
Ashwini Kumar, E.C. Agrawala, Deepak M. Nargolkar, S.V. Deshpande,
Anuradha Rustgi, Shivaji M. Jadhav, Ms. Indu Malhotra, Sushil Karanjkar, F
Venkateswara Rao Anumolu, Shiv Kumar Suri, Guru Krishna Kumr; Mrs.
Srikala, S.R. Setia, Sakesh Kumar, Ashok Kr. Singh, S.N. Bhat, Ms. S. Manda!,
Ms. Sushmita Kapoor, Anindya Banerjee, Mrs. Rachna Gupta, Dr. LP. Singh,
R.S. Lambat, Sri Narain, Sandeep Narain, Gopal Jain, Mrs. Nandini Gore,
Sridhar Y. Chitale, Ms. Jayshree Navinchandra, Uday Umesh Lalit, Gopal G
Balwant Sathe, Ms. Anitha Shenoy, with them for the appearing parties.
The Judgment of the Court was delivered by
R.C. LAHOTI, J. Leave granted in all SLPs.
The Bombay Rents, Hotel and Lodging House Rates Control, Bombay H
148
SUPREME COURT REPORTS
[2003] 2 S.C.R.
A Land Requisition and Bombay Government Premises (Eviction) (Amendment)
Act, 1996 (Act No. XVI of 1997) having been struck down as ultra vires of
the Constitution and as being beyond legislative competence of the State
Legislature, the State of Maharashtra, the Welfare Association of Allottees of
Requisitioned Premises, Maharashtra and several others have come up in
B appeal. The decision by the Division Bench of the High Court of Judicature
at ~ombay was delivered on 27th July 1998. The judgment posed the threat
of eviction against several allottees in occupation of premises requisitioned
by the State Government. Several Writ Petitions were filed which were all
disposed of by the impugned judgment of the· Division Bench. The principal
question which arises for decision in the batch of appeals is the constitutional
C validity of Amendment Act No. XVI of 1997 abovesaid. (hereinafter referred
to as the Amendment Act, for short).
Historical background : Two decisions of this Court :-
A brief statement of historical background leading to the present
D controversy is apposite.
In the year 1948, Bombay Land Requisition Act, 1948 (Act No. XXXIII
of 1948) was enacted to make provision for the requisition of land and for
the continuance of requisition of land and for certain other purposes. 'Land'
E was widely defined so as to include therein building also and 'premises' were
defined to mean building or part of building intended to be let separately and
other things appurtenant (as defined). Land and vacant premises could be
requisitioned by the State Government for any public purpose. Provision was
also made for continuance of requisitions made under the Requisitioned Land
(Continuance of Powers) Act, 194 7 and the Defence of India Act, 1962 and
F the rules made thereunder. Section 8 of the Act made provision for payment
of compensation to persons whose property was requisitioned or continued to
be subjected to requisition to be determined by an officer authorized in this
behalf by the State Government. The basis of compensation can be spelt out
from the following part of sub-Section (1) of Section 8 :-
G
H
"The officer shall determine such amount of compensation as he
deems just having regard to all the circumstances of the case; and in
particular he shall be guided by the provisions of sub-Section (I) of
Section 23 and Section 24 of the Land Acquisition Act, 1894 (as in
force in the Bombay area of the State of Maharashtra) in so far as
they can be made applicable."
..
..
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WELFARE ASSOCN. A.R.P., MAHARASHTRA v. RANJIT P. GOHIL [LAHOTI, J.]
149
It appears that the shortage of accommodation in Bombay and the A
difficulties likely to be faced by the occupants to whom the requisitioned
land and premises were allotted by the State Government resulted in the
requisitioned properties continuing under requisition for endless periods of
time. The constitutional validity of such requisition was put in issue before
the High Court in the following factual background. On 2nd April, 1951 a
flat was requisitioned by the State Government and allotted to a person. The B
owner made a request in 1964 to the Competent Authority for derequisitioning
the flat, which was rejected. A purchaser of the property in 1973 once again
made a request to derequisition the flat, which too was turned down. The
owner filed a Writ Petition in the year 1980 under Article 226 of the
Constitution, laying challenge to the validity of the requisition. One of the C
grounds of challenge was that the requisition order cou,ld not survive for such
a long period of time and the Government was bound to derequisition the
flat. The Writ Petition was allowed. The occupant came in appeal by special
leave to this Court. Vide its judgment dated February 22, 1984 (H.D. Vora
v. The State of Maharashtra and Ors., [1984] 2 SCC 337 this Court held that
the power of requisitioning is exercisable by the Government only for a
public purpose which is of a transitory character. If the public purpose of
requisition is of a perennial or permanent charac!er from the very inception,
D
no order can be passed requisitioning the premises and in such a case the
order of requisition, if passed, would be a fraud upon the statute; further
Government would be requisitioning the premises when really speaking they E
want the premises for acquisition as the objective of taking the premises was
not transitory but permanent in character. This Court upheld the decision of
the High Court allowing the Writ Petition and directing the State Government
to derequisition the flat and to take steps to evict the appellant and to handover
possession of the flat to the owner.
F
Following the decision of the Bombay High Court in H.D. Vora's case
(supra) the Bombay High Court in numerous cases struck down the continuance
ofrequisition orders made in the late 1940s and early 1950s particularly of
residential premises. Two Writ Petitions, relating to premises requisitioned
under Bombay Land Requisition Act, 1948 one of which was requisitioned G
for purposes of residential use and the other was requisitioned for commercial
use of running fair price ration shop by a co-operative society, came to be
filed in this Court which were heard and decided on April 27, 1994 by the
decision reported as Grahak Sanstha Manch and Ors. v. The State of
Maharashtra, [1994] 4 SCC 192. The Writ Petitions in effect had sought
reconsideration of decision in H.D. Vora's case (supra), which was a two H
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SUPREME COURT REPORTS
[2003] 2 S.C.R.
A Judges Bench decision, and therefore, were placed for consideration and
hearing by a Constitution Bench. The findings of the Constitution Bench may
briefly be summed up as under:-
B
c
(i)
That the purpose of a requisition order may be permanent yet an
order of requisitioning cannot be continued indefjnitely or for a
period of time longer than that which, in the facts and
circumstances of the particular case, is reasonable. The concept
of requisitioning is temporary. The concepts of acquisition and
requisition are altogether different as are the consequences that
flow therefrom. A requisitioning which in effect and substance
results in acquisition and thereby depriving an owner of property
of hi.s rights and title to. property without being paid due
compensation is bad;
(ii} That the decision in H.D. Vora's case does not require
reconsideration.
D
However, the Constitution Bench did not approve the two Judges Bench
observation in H.D. Vora's case that requisition orders under the said Act
cannot be made for a permanent purpose. The Constitution Bench also held
that the period of 30 years has not been laid down in H.D. Vora 's case as the
outer limit for which a requisition order may continue. An order of requisition
E can continue for a reasonable period of time; what period is reasonable would
depend on the facts and circumstances of each case; and in H.D. Vora 's case
the continuance of an order of requisition for as long as 30 years was rightly
held to be unreasonable.
What is of significant relevance is the operative part of the order of the
F Constitution Bench. The same (paras 20 and 21 of sec, at p.205) is extracted
G
H
and reproduced verbatim as under:-
"The continuance of requisition orders made in the late 1940s
and early 1950s and thereabouts, particularly of residential
premises, have been struck down by the Bombay High Court in
numerous cases following the judgments in H.D. Vora case.
There are no appeals there against (except one which was, by a
separate order of this Bench, dismissed). The allottees of these
requisitioned premises (except retired government servants
allotted premises requisitioned for the purpose of housing
government servants) and their~ legal representatives have
continued in occupation thereof by reason of the interim orders
...
..
WELFARE ASSOCN. A.R.P., MAHARASHTRA v. RANJIT P. GOHIL [LAHOTI, J.) 151
of this Court passed from time to time in Writ Petition No. 404 A
of 1986. Having regard to the known difficulty of finding
alternate accommodation in Bombay and other large cities in
Maharashtra, the protection of these interim orders is hereby
continued until 30-11-1994, on which date all occupants of
premises the continued requisition of which has been quashed B
as aforesaid shall be bound to vacate and hand over vacant
possessiqn to the State Government so that the State Government
may, on or before 31-12-1994, derequisition such premises and
hand back vacant possession thereof to the landlords.
The writ petitions are, accordingly, dismissed. There shall be no order C
as to costs."
[N.B. : The portion which we have underlined to emphasise will be
of significance in constructing the operative part of our judgment.]
The majority opinion endorsed by four out of five Judges constituting
the Constitution Bench was delivered by S.P. Bharucha, J. (as his Lordship D
then was) which we have noticed and reproduced hereinabove. P.B. Sawant,
J. in his separate opinion agreed with the findings on the questions of law
recorded in the majority opinion bJJt expressed dissent with the operative part
of the order. His Lordship observed:-
"I am of the view that notwithstanding the legal position, the following E
directions can be given to mitigate the hardship of the allottees of the
requisitioned premises. These directions will in no way prejudice the
interests of the landlords of the premises. At present they are receiving
the same rent from the allottees as from the other tenants. On account
of the Rent Act, they will not receive more rent from the new tenants F
whom they may indm;t after the premises are released from requisition.
It is in rare cases that the premises would be required by the landlords
for bona fide personal requirement. All that, therefore, they will be
deprived of for some time more, on account of these directions, is the
right to induct new tenants of their choice. It is a notorious fact that
such choice is, more often than not, exercised in favour of those who G
can offer competing illegal consideration, commonly known as
"pugree" which is escalating with passage of time."
His Lordship noticed that there were two sets of allottees before the
Court:
H.
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SUPREME COURT REPORTS
[2003] 2 S.C.R.
A
(i)
Consumer Cooperative Societies running fair price ration shops
in the allotted premises,
and
(ii) Individuals who are allotted residential premises.
B
As to category (i) his Lordship opined that the Consumer Cooperative
Societies were running ration shops and shall have to be wound up. The
employees of such societies should be allowed sufficient time to find out
alternative employment and the State Government should also make alternative
arrangements for housing ration shops and for that purpose the derequisition
C and eviction should not take place before 31-5-1996. As to category (ii), his
Lordship opined that they should be given preference in allotment of plots
and flats by making suitable arrangement with City and Industrial Development
Corporation of Maharashtra Limited and Maharashtra State Housing Board.
Alternative accommodation to such occupants should be made available by
the State Government latest by 31-5-1996 and till then there should be no
D derequisition and eviction. The premises other than those covered by the said
two categories may be derequisitioned as directed in the order proposed by
the majority.
It is pertinent to note that the two writ petitions were directed to be
dismissed by the Constirution Bench. To mitigate the hardship likely to be
E caused to the occupants - the allottees in requisitioned premises continuing
in occupation by virtue of interim orders of the Court which stood vacated
by dismissal of the writ petitions, this Court allowed time until 30-11-1994
for vacating the premises by the occupants and for restoring of possession of
the premises by the State Government to the owners.
F
Rent Control Legislations leading upto the impugned amendment :-
G
Now the relevant Rent Control Legislations in their chronological order
leading upto the enactment of the impugned Amendment Act held ultra vires
by the impugned judgment of the High Court, may be noticed.
The Bombay Land Requisition Act, 1948 as originally enacted was to
remain in force upto 31-3-1950. The Act was amended from time to time
extending its life. Section 9 of the Act empowered the State Government to
release from requisition at any time the land requisitioned or continued to be
subject to requisition under the Act. By Section 2 of Maharashtra Act 51 of
H 1973, sub-Section (IA) was inserted below sub-Section (I) of Section 9
.>
)
... .,
WELFARE ASSOCN. A.R.P., MAHARASHTRA v. RANJIT P. GOHIL [LAHOTI, J.] 153
which made it obligatory for the State Government to release land from A
requisition on the expiry of the stated period. The said period was extended
from time to time by successive amendments. The period of requisition was
to expire on 31-12-1994 when the matter came up for consideration and
disposed of by the Constitution Bench in Grahak Sanstha Manch case (supra).
The paucity of accommodation and the impact of war on the population B
and habitation .conditions in Bombay led to the enactment of the Bombay
Rent Restriction Act, 1939 followed by the Bombay Rents, Hotel Rates and
Lodging Houses Rates (Control) Act, 1944 ·to curb the sky rocketing greed
of the landlords pitted against the miseries of roofless. Both these Acts were
repealed by a more comprehensive legislation namely, the Bombay Rents, C
Hotel and Lodging House Rates (Control) Act, 1947 which was enacted to
amend and consolidate the law relating to the control of rents and repairs of
certain premises, of rates of hotels and lodging houses and of evictions and
also to control the charges for licenses of premises etc. The Act protected
tenants and licensees in occupation of the premises. Section 13 made provision
for the events and contingencies on proof whereof the landlord could recover D
possession. Maharashtra Act 17 of 1973 conferred the status of tenant on
certain licensees in occupation of any premises or any part thereof, which is
not less than a room since 1st February 1973 or before. Several .other
amendments and enactments were also passed by the State Legislature
beneficial in nature to the tenants, licensees and occupants of the premises, E
the details whereof are being omitted as not necessary for our purpose. What
is relevant for our purpose is to note that the life of requisition or continued
requisition of any land which was coming. to an end by virtue of sub-section
(I-A) as inserted in Section 9 of the Bombay Land Requisition Act, 1948 by
Maharashtra Act 5 of 1973, further amended by Maharashtra Act 29 of 1990
was given an extension by issuing an ordinance, namely, the Bombay Land F
Acquisition (Amendment) Ordinance, 1994 (Maharashtra Ordinance No. XX
of 1994) which extended the life of such requisitions for a period of 24 years
from 27-12-1973 that is upto 27th December, 1997. The statement of objects
and reasons accompanying the said Ordinance referred to the two decisions
of this Court in H.D. Vora (supra) and the subsequent decision of this Court G
dated 27-4-1994 in Grahak Sanstha Manch and Ors. case (supra). The
preamble noticed the difficulty which was likely to be faced by several persons
in occupation of the accommodation requisitioned and allotted by the State
Government and the difficulties which the Government was facing on account
of paucity of funds and ever rising prices in constructing alternative
accommodation to accommodate Government employees in~service and others. H
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SUPREME COURT REPORTS
[2003] 2 S.C.R.
A The statement noticed the factum of both Houses of the State Legislature
being not in session and the Governor of Maharashtra having felt satisfied of
the existence of requisite circumstances for issuing the Ordinance and
concluded by stating :-
B
c
D
"In the facts and circumstances as aforesaid, it is considered expedient
to extend the period of requisition under the Act for a further period
of three years beyond the 26th December, 1994, so as to enable the
State Government to complete the process of derequisitioning during
the extended period of three years. It is, therefore, proposed to suitably
amend sub-Section (IA) of Section 9 of the principal Act extending
the total period of requisition from twenty-one years to twenty-four
years."
The Ordinance was replaced by Maharashtra Act No. VII of 1995. The
assent of the President of India under Article 254(2) of the Constitution of
India was received.
Now the crucial amendment. On 7-12-1996, the Governor of
Maharashtra promulgated the Bombay Rents, Hotel and Lodging Houses
Rates Control, Bombay Land Requisition and Bombay Government Premises
(Eviction) (Amendment) Ordinance, 1996 (Maharashtra Ordinance XXIII of
1996) whereby certain amendments were incorporated in the Bombay Rents,
E Hotel and Lodging House Rates Control Act, 194 7 (hereinafter referred to as
"the Principal Act, 1947") by Section 2 of the Ordinance. It is not necessary
to burden the judgment by extracting and reproducing the entire text of the
Ordinance (which is published in Maharashtra Government Gazette
Extraordinary-Part VIII-dated December 7, 1996).