Himachal Pradesh High Court
G.D. Khanna And Sons And Ors. vs State Of Himachal Pradesh And Anr. on 4 May, 1989
Equivalent citations: AIR1991HP15
ORDER N.M. Kasliwal, C.J.
1. The case of the petitioners is that they arc in occupation of the different portions of the building known as Commercial Building Nos. 1 to 6 The Mall Shimla, in the capacity as tenants. The Kailash District Co-operative Marketing and Supply Federation Ltd. (hereinafter referred to as 'the Society') is the owner of this building. The Society is registered under the Himachal Pradesh Co-operative Societies Act, 1956 and deals in the business of grains, potatoes etc. The State Government issued a notification on July 15, 1978, in exercise of the powers conferred by Section 3 of the Himachal Pradesh Urban Rent Control Act, 1971 (hereinafter referred to as 'the Act') exempting the building known as Commercial Building Nos. 1 to 6 situated on the Mall Shimla, from the operation of the provisions of the said Act. The above notification has been annexed with the writ petition as Annexure P-1. According to the petitioners the above notification has been issued malafidely and in the colourable exercise of powers by the State Government in order to give undue favour to the Society. The case of the petitioners further is that there was no intelligible differentia nor any nexus with the object sought to be achieved for issuing such notification and granting exemption in favour of the respondent Society alone. The case of the petitioners further is that the main object of the Act was to check rack-renting and unreasonable eviction and the State by issuing the impugned notification has defeated the main object of the Act.
2. In reply to the petition, it has been submitted on behalf of the State that the respondent Society had been suffering heavy loss due to shortage of accommodation for storing of potatoes and foodgrains. Since the buildings were in occupation of the petitioners and in order to promote the business of respondent No. 2, the Society, and to place it on Sound financial basis, the State considered the exemption of the said building from the operation of the Act as unavoidable and essential so that it could be got vacated from the present petitioners easily which could not be done otherwise because of the stringent provisions and unreasonable restriction of the Act.
3. It has been further submitted in the reply that the Society had become financially weak and was placed under liquidation. Thus after considering all the relevant facts, the State Government took an action bonafidely in exempting the Society and its buildings from the purview of the Act. It has also been submitted in the reply that the Co-operative Societies are institutions of social service and could not be treated at par with other business concerns, as these are formed to serve the masses in maintaining a regular supply line of various essential commodities on nominal profits and for marketing the growers produce and as such no individual interest of any kind is involved in case of such societies.
4. A rejoinder to the reply was submitted on behalf of the petitioners and the same was allowed to be taken on record by an order of this Court passed yesterday.
5. Shri Devinder Gupta appearing for the Society prayed for a short time to file further affidavit controverting the facts by way of a surrejoinder. I do not consider it necessary to ' grant any time for filing further affidavit on behalf of the Society controverting the facts mentioned in the rejoinder because the petition succeeds on the facts already mentioned in the main writ petition and even by ignoring the additional facts brought on record by way of rejoinder. It remains undisputed and rather it is conceded by Shri Devinder Gupta appearing for the Society that there are other Co-operative Societies also owning the properties not only in Shimla but in various other important towns of Himachal Pradesh where the Himachal Pradesh Urban Rent Control Act is in force. Thus it becomes clear that the present notification dated July 15, 1978 has been issued by the State only in respect of the properties of the respondent Society alone and not for the entire Co-operative Societies in the State of Himachal Pradesh, who are also circumstanced in similar manner as the respondent Society.
6. The statement of objects and reasons of the Act clearly provide, "that it is necessary to restrict the increase of rent of building and rented lands situated within the limits of urban areas and to give protection to the tenants against mala fide attempts of the landlords to procure their eviction after the death of a tenant. This Bill (i.e. Bill No. 21 of 1971) seeks to achieve the aforesaid objections. The above Objects and Reasons are in consonance with the objects of such Acts passed in whole of the country and whose main purpose is to check rack-renting and unreasonable eviction. The impugned notification has not been issued for the benefit of all the Co-operative Societies existing in the State of Himachal Pradesh but only for the benefit of the respondent Society. It cannot be denied that the object of exemption granted in favour of the Society from the applicability of the Act goes clearly contrary to the Objects and Reasons of the Act, namely, preventing rack-renting and unreasonable eviction.
7. Learned Deputy Advocate General appearing on behalf of the State, placed strong reliance on S. Kandaswamy Chettiar v. State of Tamil Nadu and Anr., (1985) 1 SCC 290 : (AIR 1985 SC 257) and S. M. Mahendru and Company and Ors. v. State of Tamil Nadu and Anr., (1985) 1 SCC 395 : (AIR 1985 SC 270). On the basis of the above authorities, it was contended that the cases of the Co-operative Societies stood on a different footing and the State Government was competent to grant exemption in favour of the respondent Society running its business for the benefit of the public.
8. A perusal of the above two cases of the Supreme Court show that in S. Kandaswmay Chettiar (supra), exemption to buildings from Rent Act was granted in favour of Public Trust. In the said case, it was held that public religious and charitable endowments or trusts constitute a well recognised distinct group inasmuch as they not only serve public purposes but the disbursement of their income is governed by the objects with which they are created and buildings belonging to such public religious and charitable endowments or trusts, clearly fall into a distinct class different from buildings owned by private landlords and as such their classification into one group done by the State Government while issuing the impugned notification Under Section 29 must be regarded as having been based on an intelligible differentia. It may be further mentioned that in the aforesaid case a notification was issued by the State Government Under Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, exempting all the buildings owned by the Hindu, Christian and Muslim religious trusts and charitable institutions from all the provisions of the Act. Originally, the exemption was available to buildings of private religious trust as also private charitable trust but later on by a fresh Government order the State Government confined the exemption to all buildings owned by the Hindu, Christian and Muslim religious trusts, and public trusts and public charitable trusts. A challenge to the above notification was made and the Supreme Court upheld the validity of such notification.
9. Another case, M/s S. M. Mahendru and Co. (supra) was also of the State of Tamil Nadu where the exemption to all buildings owned by the Co-operative Societies was granted. In this case the notification challenged was dated November 21, 1976, which reads as under:--
"No. 11(2) H.O. 6060/76.-- In exercise of the powers conferred by Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu hereby exempts the buildings owned by all Government undertakings including Government Companies registered under the Indian Companies Act, 1956 (Central Act 1 of 1956) and by all the cooperative societies from all the provisions of the said Act".
10. A perusal of the above notification would show that this was also in respect of all the buildings owned by all Government undertakings, including Government Companies registered under the Indian Companies Act, 1956 and by all the co-operative Societies in whole of the State of Tamil Nadu. Their Lordships while considering the validity of the above notification took into consideration the position of the Co-operative societies as a whole and upheld the validity of the notification under challenge before them.
11. So far as the case in hand before me is concerned, the Government of Himachal Pradesh has not exempted all the buildings owned by the Co-operative Societies as a class in the State of Himachal Pradesh but has singled out the case of the respondent Society alone. I am clearly of the view that such discrimination made in the case of the respondent society alone cannot stand the two important tests of intelligible differentia as well as nexus with the object sought to be achieved for justifying the discrimination under Article 14 of the Constitution of India. In case the Government wanted to achieve the object of promoting the economic interest of the Co-operative Societies then the exemption should have been issued in favour of all the Co-operative Societies in the State and not for the respondent Society alone. I am not satisfied with the justification given in the reply submitted by the State for the exemption granted in favour of respondent No. 2. The sole object of issuing the notification has been stated in order to have the office and business of the respondent society in the building in question. That ground cannot be considered as sufficient to fulfil the object sought to be achieved by issuing exemption notification for the respondent Society alone. So far as M/s S. M. Mahendru and Co.'s case (supra) is concerned, I may again mention with the risk of repetition that the notification in that case was issued exempting all the buildings belonging to the Co-operative Societies in the whole of the State of Tamil Nadu and in this view of the matter the reasons given for holding the notification valid in that case cannot help the respondents to justify the notification of exemption issued in the case in hand before me.
12. So far as the challenge to vires of Section 3 of the Act is concerned, Shri Sood, learned counsel for the petitioners himself has not pressed the point in view of the authoritative pronouncements already given by their Lordships of the Supreme Court, in the cases already referred to above.
13. In the result, this writ petition is allowed and the notification dated July 15, 1978, Annexure P-1 to the petition is quashed as being ultra vires of Article 14 of the Constitution of India.
14. In the facts and circumstances of the case, parties shall bear their own costs.