Bombay High Court
Property Owners' Association And Ors. vs State Of Maharashtra And Ors. on 13 December, 1991
Equivalent citations: 1992(1)BOMCR152
JUDGMENT M.L. Pendse, J.
1. By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging Constitutional validity of Chapter VIII-A of the Maharashtra Housing and Area Development Act, 1976 (hereinafter referred to as the "Act"). The petitioner No. 1 are an Association of Property Owners who claims to protect the interest of owners of immovable properties in City of Bombay. The petitioners Nos. 2 to 5 are Trustees of a Public Charitable Trust, while petitioner No. 6 is a landlady of a house situated at Matunga. The petitioners Nos. 7 to 17 are owners of diverse properties and claim that their properties are structurally sound and the Floor Space Index (F.S.I.) in respect of these properties is not exhausted and is available for further construction.
2. Before adverting to the challenge raised in the petition, it is necessary to refer to the Legislative provisions which are relevant to appreciate the contentions raised in the petition. The land available for housing in the island City of Bombay is very limited due to geographical limitations and Bombay City being the commercial capital of the country, the pressure on the limited availability of the land is extremely heavy. The prices of houses were always on the rise and it is extremely difficult for persons belonging to the lower income group or even middle income group to secure shelter by payment of reasonable rent. The Legislature realised the plight of people residing in the City and as far back as in year 1938, the Bombay Rent Restrictions Act, 1939 was enacted to restrict the increase in the rents of the premises where the rent charged was not in excess of Rs. 80/- per month. After IInd World War, the rents sky-racketed and it was almost impossible for a common citizen to secure housing accommodation in the city. The break of War resulted into shortages of building material and the Government was required to step in and issue orders under the provisions of Defence of India Rules, 1939. On May 12, 1944, the Legislature enacted the Bombay Rents, Hotel Rates (Control) Act, 1944 and this legislation was found to be inadequate to protect the interest of lessees of both residential and commercial premises in the town. The Legislature thereupon enacted Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 to replace the earlier Acts and Orders and this Act came into force on February 13, 1948. The Bombay Rent Act covers the towns of Bombay, Pune, Nasik, Thane and the Western Districts of Maharashtra. The Vidarbha region is governed by the Rent Control Act which is known as Central Provinces and Berar Letting of House and Rent Control Act, 1946 and the former areas of in Hyderabad State are covered by the provision of the Hyderabad House (Rent, Eviction & Lease) Control Act, 1954. The dominant intention of the Legislature in enacting the Bombay Rent Act was to uphold protection to the tenants from wrongful eviction and also to ensure that the tenants are able to secure housing accommodation at a reasonable rent. With that object in view, the Rent Act provided that the landlord shall not charge the rent in excess of standard rent and the expression "Standard rent" means that the rent which was payable for the premises on September 1, 1940. In other words, the Legislature has frozen the rent which the landlords were recovering on September 1, 1940 and has issued a flat not to recover the rent in excess of the standard rent. The Bombay Rent Act from time to time underwent amendments and the landlord was permitted to recover certain additional amount known as permitted increases. These permitted increase were for reasons of increase in tax, etc., but the basic principle of determination of standard rent with reference to September 1, 1940 was not disturbed.
3. The result of freezing of rent with reference to September 1, 1940 resulted into complex questions. The owners of the land were not prepared to erect buildings to provide shelters to the tenants both for the reason that the expenses for construction of buildings had risen stiffly as well as because of freezing of rent had restrictions on recovering possession from the tenants. The return which the landlord can expect from the properties due to the freezing of the rent was hardly 1 to 2% of the investment and that led to the landlord ignoring necessary repairs to the building. Section 23 of the Bombay Rent Act demands the landlord to keep the premises in good and tenantable repairs and in case the landlord fails to do so, then the right is created in favour of the tenant to carry out the repairs and deduct the expenses, but this provisions was entirely insufficient either to compel the landlord to carry out the repairs or for the tenant to take over the burden. Several buildings in City of Bombay in absence of necessary repairs or attention, became dilapidated and due to heavy rain fall in the city and saline atmosphere prevalent, the conditions of the buildings started deteriorating. The result of the failure to attend to the requisite repairs led to collapse of large number of buildings causing loss of life and dis-housing a large number of people.
Realising the seriousness of the situation, the Legislature passed enactment known as "The Building Repairs and Reconstruction Board Act, 1969." The legislation enabled levy of cess on buildings in Greater Bombay and the Legislature felt that from the recovery of the cess in addition to the contribution of substantial amount to be made by the State Government and the Bombay Municipal Corporation, it might be possible for the Boards constituted under the Act to carry out structural repairs to the old buildings for safe habitation. The Legislature also felt that in case structural repairs could not improve the condition of the building, then the Board could undertake reconstruction of the building by pulling down the dilapidated structure. The Act also made provision for accommodating the occupiers of such buildings and further provided that during the period of repairs or reconstruction, the occupiers should be accommodated in the transit camp set up by the Board. The Government had also passed a parallel legislation in respect of other areas of the State.
4. The Maharashtra Legislature enacted the Maharashtra Housing and Area Development Act, 1976 and the Act received the assent of the President on April 25, 1977. The object of enacting this legislation was to unify, consolidate and amend the laws relating to housing, repairing and reconstructing, dangerous buildings and carrying out improvement works in slum area. The laws relating to housing, repairing and improvement work in relation to slum areas in different parts of the State were : (a) The Bombay Housing Board Act, 1948, (b) Madhya Pradesh Housing Board Act, 1950, (c) The Bombay Building Repairs and Reconstruction Board Act, 1969, and (d) The Maharashtra Slum Improvements Act, 1973 and all these Acts were repealed on enactment of the Maharashtra Housing and Area Development Act, 1976. By section 3 of this Act, the State Government was required to establish an authority to be called the Maharashtra Housing and Area Development Authority, for securing the objective and purpose of the Act. Section 18 of the Act provides for establishment of four Boards, one each for Bombay area, the Vidarbha region, the Aurangabad area and for remaining areas of the State. The expression "Bombay area" means the area within the limits of the City of Bombay, Bombay Suburban District, and the districts of Thane, Kulaba and Ratnagiri. Section 28 of the Act sets out the functions, duties and powers of the Authority and Boards and, inter-alia, provides that the Board shall prepare and execute proposal, plans or projects for housing accommodation in the State. Section 41 of the Act sets out that on representation from the Authority or from Board to the State Government, if it is found that it is necessary that a land should be acquired, then the State Government may acquire the land in accordance with the provisions of the section. Section 44 provides the basis for determination of amount of compensation for acquisition of lands in Municipal area and sub-section (3) provides that in absence of any agreement between the owner of the land and the Authority, the amount payable shall be an amount equal to one hundred times the net average monthly income actually derived from such land, during the period of five years immediately preceding the date of publication of the notification referred to in section 41 of the Act. The net average monthly income is to be calculated in the manner and in accordance with the principle set out in First Schedule to the Act. In view of repeal of the Bombay Building Repairs and Reconstruction Board Act,. 1969, the Legislature by Chapter VIII included the identical provisions in respect of Repairs and Reconstruction of Dilapidated Buildings. Section 82 provides for levy and collection of Bombay Building Repairs and Reconstruction cess and section 84 prescribes that the buildings in City of Bombay shall be divided into three categories. Category 'A' consists of buildings erected before September 1, 1940, Category 'B' consists of buildings erected between September 1, 1940 and December 31, 1950 and Category 'C' consist of buildings erected from January 1, 1951 onwards. Certain lands and buildings are exempted from payment of the cess and the list thereof is set out in section 83 of the Act.
5. On February 26, 1986, the Governor of Maharashtra issued an Ordinance being Maharashtra Ordinance No. 1 of 1986 to amend the Maharashtra Housing and Area Development Act, 1976. The Ordinance was converted into Amending Act No. 21 of 1986 which came into force with effect from February 26, 1986. The Statement and Objects for enactment of Amendment sets out that there are 19,642 cessed old and dilapidated buildings in the island City of Bombay and out of this, 16,502 buildings were constructed prior to September 1, 1940 and majority of them are about 80 to 100 years old. These buildings have outlived their lives and as a result of this, the number of the house collapses are on the increase rendering considerable number of families homeless. The old and dilapidated buildings pose a great danger to human life and the property and the collapses add to the acute shortage of housing and posing problems of law and order. The statement then recites that the enactment of Bombay Building Repairs and Reconstruction Board Act, 1969 and the enactment of the principal Act in 1976 providing for levy of cess and creation of an Authority to attend to structural repairs and reconstruction had failed to bring the requisite results due to colossal and stupendous problems facing the City and in addition in absence of requisite financial resources. The Government, therefore, thought that more positive step for protecting the shelter of the occupiers in the old dilapidated buildings and saving life and property by preventing collapse of such buildings is to provide for occupiers' participation in carrying out the work of structural repairs or reconstruction of new buildings by acquiring the old and dilapidated buildings and transferring ownership and control of such buildings to the occupiers. The Government thought that this step would bring about equitable distribution of ownership and control of tenements in such buildings to subserve the common goods.
The preamble to the Amending Act sets out that in the urban areas and particularly in Greater Bombay area the old buildings which have outlived their lives and rendered themselves in a bad state of repairs present a dangerous possibility of collapse and, therefore, necessity was increasingly felt to take up the programme of repairs and reconstructions of such buildings. The preamble then sets out the magnitude of the housing programme for construction of new houses throughout the State and the task of repairs and reconstruction for old and dilapidated buildings and improvement of slums in the urban areas. The Amending Act, therefore, inserted Chapter VIII-A in principal Act and the subject dealt with is acquisition of cessed properties for Co-operative Societies of occupiers. Section 1-A of the Act on amendment gives a declaration that the Act is for giving effect to the policy of the State towards securing the principle specified in clause (b) of Article 39 of the Constitution of India. Section 1(2) provides that Chapter VIII, which as mentioned earlier deals with repairs and reconstruction or dilapidated buildings, and Chapter VIII-A is extended only to Greater Bombay. The expression "structural repairs" for the purpose of Chapter VIII in accordance with section 2(36), inter-alia, means repairs or replacement of decayed, cracked, or out of plumb structural components of a building or any substantial part thereof. The expression "occupier" is defined under section 2(25) by an inclusive definition as follows :
"(25) "occupier includes--
(a) any person who for the time being is paying or is liable to pay to the owner the rent or any portion of the rent of the land or building in respect of which such rent is paid or is payable;
(b) an owner in occupation of, or otherwise using, his land or building;
(c) a rent-free tenant of any land or building;
(d) a licensee in occupation of any land or building; and
(e) any person who is liable to pay to the owner damages for the use and occupation of any land or building."
6. Section 103-A to 103-N form part of Chapter VIII-A of the Act. The provisions of the Chapter are applicable to all the cessed buildings which are erected before September 1, 1940 and are classified as belonging to Category 'A' under sub-section (1) of section 84 of the Act. Section 103-A reads as follows:
"This Chapter shall come into force on and from the commencement of the Maharashtra Housing and Area Development (Second Amendment) Act, 1986 and shall apply to all the cessed buildings which are erected before the 1st day of September, 1940 and are classified as belonging to Category A under sub-section (1) of section 84.
Provided that, nothing in this Chapter shall apply to any cessed building belonging to Category A if, on the date of commencement of the Maharashtra Housing and Area Development (Second Amendment) Act, 1986, out of the total number of occupiers of such building, fifty per cent, or more occupiers are using the tenentments or premises in their possession for commercial or non-residential purpose.
Explanation.---For the purposes of this section, any such building where a floor or any part of a building is constructed subsequently and such floor or part is not separable, shall be deemed to be a building belonging to Category A."
Section 103-B is a kingpin of Chapter VIII-A and provides for acquisition of cessed properties for Co-operative Societies of occupiers. The principal challenge being to section 103-B, it is necessary to set out the entire section:
(1) Notwithstanding anything contained in any of the provisions of Chapter VIII or any other law for the time being in force or in any agreement, contract, judgment, decree or order of any Court or Tribunal to the contrary, a co-operative society formed or proposed to be formed under the provisions of the Maharashtra Co-operative Societies Act, 1960, by not less than seventy per cent of the occupiers in a cessed building may, by written application, request the Board to move the State Government to acquire the land together with the existing building thereon or where the owner of the building does not own the land underneath or appurtenant to such building but holds it as a lessee or licensee, or where any person holds the building or the land underneath or appurtenant to such building or both under a lease or licence, then to acquire the right or interest of such owner or person in or over such building or land or both as lessee or licensee together with the existing building thereon" (hereinafter in this Chapter referred to as "the land"), in the interest of its better preservation or for reconstruction of a new building in lie of the old one and intimate their willingness to pay the amount of such acquisition as may be determined under the provisions of this Chapter and to carry out the necessary structural and other repairs or, wherever necessary, to reconstruct a new building as the case may be, at their own cost.
Explanation I.---In this section the expression "seventy per cent of the occupiers" means the seventy per cent of the occupiers on the date of commencement of the Maharashtra Housing and Area Development (Second Amendment) Act, 1986, and include their successor-in-interest or new tenants inducted in place of such occupiers, but does not include the owner or the occupiers inducted by virtue of creation of any additional tenancies or licences by the owner after the date of commencement of the aforesaid Act.
Explanation II.---For the purpose of this sub-section, any suit or proceeding for recovery of possession of tenement or premises or part thereof, initiated against the occupier in any Court or before any authority whether, before or after making an application under this sub-section, shall not affect the right of such occupier to join or to continue as a member of the co-operative society of the occupiers of the building, but his membership of such co-operative society shall be subject to the final decision in such suit or proceeding:
Provided that, if in the meantime before the final decision in such or proceeding, the acquisition proceedings under this Chapter are completed and the land is conveyed to the co-operative society of the occupiers under sub-section (7), the claim for possession made in such suit or proceeding, at any stage where it is pending on the date of execution of such conveyance, shall abate.
(2) On receipt of the application made under sub-section (1), the Board shall after due verification and scrutiny approve the proposal if it considers that it is in the interest of better preservation of the building or to be necessary for reconstruction of a new building and shall direct the co-operative society, whether registered or proposed to deposit with the Board within the period specified by it in that behalf being thirty per cent of the approximate amount that would be required to be paid to the owner if the land is acquired and give intimation in that behalf to the owner.
(2-A) Where, after the date of application made under sub-section (1),--
(a) any owner has undertaken the work of any repairs to the building; or
(b) the percentage of the occupiers who had initially agreed to become members of then co-operative society formed under sub-section (1) is reduced to less than seventy per cent of the occupiers as a result of some members opting out, or due to the number of additional tenancies or licences created in the building thereafter or due to any other reason whatsoever, then the power of Board to approve the proposal shall not be affected, and not withstanding anything contained in sub-section (1), the Board shall approve the proposal and direct the co-operative society to deposit the approximate amount as required under sub-section (2).
(3) On receipt of the amount of deposit as provided in sub-section (2), the Board shall submit to the State Government a proposal to acquire the land for the aforesaid purpose.
(4) If on receipt of an acquisition proposal under sub-section (3), the State Government is satisfied about the reasonableness of the proposal, it may approve the proposal and communicate its approval to Board.
(5) On receipt of the Government approval, the Board shall forward the acquisition proposal to Land Acquisition Officer for initiating land acquisition proceedings in accordance with the provisions of sub-sections (3), (4) and (5) of section 93 and section 96 of this Act:
Provided that, where any proceedings for acquisitions of land are so initiated the notice to be published under sub-section (3) of section 95 in respect thereof need not contain any statement regarding provision of any alternative accommodation to occupiers in such land.
Provided further that, where the proposal involves acquisition of the right or interest of the lessee or licensee in or over the building or land as referred to in sub-section (1), then such building or land on its transfer by the Authority to the co-operative society under sub-section (7) shall be held by the co-operative society on lease or licence, as the case my be, subject, however, to the following conditions, namely:-
(i) where there is a subsisting lease or licence, on the same terms and conditions on which the lease or licensee held it, and
(ii) where the lease or licence has been determined or where the lessee or licensee has committed breach of the terms and conditions of the lease or licence, as the case may be, on the fresh terms and conditions, particularly in regard to the period of lease or licence and rent as may be stipulated by the owner of the land.
(5-A) Where acquisition proceedings have been initiated as provided in sub-section (5) and a notification under sub-section (5) of section 93 is published, the Collector shall take and hand over possession of the land to the Board in accordance with the provisions of sub-section (6) of section 93.
(6) After the land is vested absolutely in the Board on behalf of the Authority free from all encumbrances and the amount to be paid to the owner is determined the Board shall require the society to get itself registered if it is not registered fill then and to deposit the remainder of the amount to be paid to the owner with the Land Acquisition Officer. The Board shall simultaneously pass on the amount deposited by the co-operative society with it to the Land Acquisition Officer. The Land Acquisition Officer shall thereupon make the payment of the amount for acquisition or deposit the same in the Court as provided in section 56.
(7) Subject to the provisions of sub-section (6), the Authority shall convey the land acquired under this section to the co-operative society or the occupier thereof with its right, title and interest therein and execute without undue delay the necessary documents in that behalf".
Section 103-C deals with restriction on transfer of land or building by the society and declares that any transfer in contravention of the provisions are void having certain consequences. Section 103-D provides for relaxation in requirement of minimum number of members for formation of a Co-operative Society under the Maharashtra Co-operative Societies Act, 1960. Section 103-E deals with non-member occupiers in the Co-operative Society.
7. Shri Setalvad, learned Counsel appearing on behalf of the petitioners, submitted that the provisions of Chapter VIII-A are violative of fundamental rights guaranteed under Articles 14 & 19 of the Constitution. The learned Counsel submitted that the provisions are entirely discriminatory and arbitrary and deprive that valuable rights of the owners of the properties for negligible or illusory amounts and confers rights on the occupiers of the building irrespective of their status to occupy the premises. It was contended that the classification of the buildings is unreal and there is no effective machinery provided under the Chapter to ensure that the alleged object is achieved. The learned Counsel also submitted that the provisions are violative of principles of natural justice as the owner whose rights are acquired is deprived of an opportunity of making an effective representation. Though the petition raises two additional contentions, i.e., (a) that the provisions of Chapter are violative of Article 300-A of the Constitution of India as it provides that acquisition of the property for a compensation which is illusory, and (b) that the deletion of Article 19(1)(f) and Article 31 by the Constitution 44th (Amendment) Act, 1978 in ultra-vires as it violates the basic features of the Constitution. Shri Setalvad submitted at the outset that the petitioners are not claiming relief on this ground in this Court and if required would raise the contentions only before the Supreme Court, if so advised. Shri Mehta, learned Counsel appearing on behalf of the State Government and Shri Paranjape, learned Counsel appearing on behalf of the Board constituted under the Act, controverted the submissions that the provisions of Chapter VIII-A are violative of fundamental rights guaranteed under Article 14 of the Constitution of India. Both the Counsel submitted that the provisions are neither discriminatory nor are unreasonable so as to attract the vice of Article 14 of the Constitution of India. It was also contended that it is not open to examine the challenge to the provisions on the ground of violation of Article 14 in view of Article 31-C of the Constitution. It was submitted that the provisions of Chapter VIII-A were enacted for achieving the object of securing that ownership and control of the material resources of the community are distributed to subserve the common good as provided under Article 39(b) of Part IV of the Constitution. In view of these rival contentions, two questions squarely fell for consideration and the questions are (a) whether the provisions of Chapter VIII-A are saved by Article 31-C of the Constitution and, therefore, not open to challenge on the ground of abridgment of rights conferred by Articles 14 and 19, and (b) if not so, whether the provisions of Chapter VIII-A are violative of rights conferred by Articles 14 and 19.
8. Part IV of the Constitution deals with directive principles of State Policy and Article 39 demands that certain principles of policy shall be followed by the State. Article 39(b) require the State to direct the policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. Article 31-C, inter-alia, provides that no law giving effect to the policy of the State towards securing any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution. The Article further provides that where such law is made by the Legislature of a State, the protection under Article 31-C is not available unless the assent of the President is received to such law. Shri Setalwad urged that no doubt section 14 of the Act declares that the Act is for giving effect to the policy of the State towards securing the principle specified in clause (b) of Article 39 of the Constitution but such declaration would not attract Article 31-C of the Constitution unless it is established that the provisions of Chapter VIII-A are to subserve the purpose of Article 39(b), i.e., distribution of material resources of the community to subserve the common good. The learned Counsel in support of the submission relied upon decisions of the Supreme Court to which a brief reference in necessary. In the landmark judgement of Kesavananda Bharati Sripadagalvaru and others v. State of Kerala and another, , Mr. Justice Falcker observed in paragraph 1339 that the Court in deciding whether the law fails within the general description given of it in Article 31-C will be competent to examine the true nature and character of the legislation, its design and the primary matter dealt with, its object and scope. If the Court comes to the conclusion that the object of the legislation was merely a pretence and the real object was discrimination or something other than the object specified in Article (b), then, Article 31-C would not be attracted and the validity of the Statute would have to be tested independently of Article 31-C. In judgment Minerva Mills Ltd. and others v. Union of India and others, it was observed by Chief Justice Chandrachud that in the very nature of things, it is difficult for a Court to determine whether a particular law gives effect to a particular policy. Whether the law is adequate enough to give effect to the policy of the State about securing a directive principle is always a debatable question and the courts cannot set aside the law as invalidated merely because in their opinion, the law is not adequate to give effect to certain policy. The learned Chief Justice then observed that the only question open to judicial review is whether there is a direct and reasonable nexus between the impugned law and the provision of Article 39(b). The question has to be decided not by metaphysical subtilty, nor as a matter of semantics, but by a broad and liberal approach and the wood should not be missed for the trees. A reference can be usefully made to the decision of the Supreme Court reported in A.I.R. 1990 Supreme Court 133, Tinsukhia Electric Supply Co. Ltd. v. State of Assam and others, where the earlier decisions in Kesavan and Bharati, Minerva Mills and Sanjeev Coke Manufacturing, were considered and the principle laid down in Kesavan and Bharati's case was reiterated. Shri Setalvad referred to two decisions Balmadies plantations Ltd. & another v. The State of Tamil Nadu, and Maharao Saheb Shri Bhim Singhji Anantalakshmi Pathabi Ramacharan Yaturi and others v. Union of India and others, to urge that it is permissible for the Court to hold that though the Act is enacted for achieving the object under Article 39(b) of the Constitution, some parts of the Act are not for that purpose and provisions of that part can be attacked on the ground of violation of Articles 14 and 19.
Before examining whether the provisions of Chapter VIII-A are entitled to protection of Article 31-C, it is necessary to refer to the decision State of Maharashtra & another v. Basantibai Mohanlal Khetan & others. The Supreme Court was examining whether the provisions of section 44(3) and (4) of the Maharashtra Housing and Area Development Act providing for method of determining compensation payable in respect of lands situated within Municipal limits are violative of Article 14 of the Constitution. While reversing the decision of this Court it was held that objects of the Act, inter alia, provision for acquisition of private lands for providing sites for building houses or housing accommodation to the community and thereafter the land is developed and distributed amongst people as house sites and this amounts to equitable distribution as contemplated under Article 39(b) of the Constitution. The Supreme Court held that the High Court was in error in taking narrow view of the objects of the Act and the functions of the Authority under it because the Act was brought into force to implement the directive principle contained in Article 39(b) and hence even if there is any infraction of Article 14, it is cured as Article 31C is clearly attracted to the case. This decision is directly on the point as the Supreme Court examined the objects of the Act which now includes Chapter VIII-A and concluded that the Act is brought into force to implement the directive principle contained in Article 39(b). In view of this decision of the Supreme Court, the task of examining whether the provisions of Chapter VIII-A are enacted to subserve the purpose of Article 39(b) is considerably easy. Shri Setalvad submitted that the provisions of Chapter VIII-A were inserted by amendment after the decision of the Supreme Court and as these provisions did not come up for consideration of the Supreme Court, the decision in Basantibai's case cannot conclude the issue and it is necessary to examine whether the provisions of Chapter VIII-A are entitled to protection of Article 31-C. It is undoubtedly true that Chapter VIII-A was inserted in the present Act after the decision of the Supreme Court but that fact, in our judgment, will not make any difference to the conclusion that the object of enactment of Chapter VIII-A was the same object for which the parent Act was enacted. We will briefly examine as to whether the object in the enactment of provisions of Chapter VIII-A is for securing the distribution of material resources to the community to subserve the common good.
9. It can hardly be debated that the good governance demands that steps are taken for providing shelter to the citizens and, more so, when there is heavy pressure on the land in congested city. Due to numerous reason, there is a stalemate in respect of construction of new buildings and there is also apathy in maintenance of existing buildings and the sufferer is always the common man who ill-affords to spend a fortune for acquisition of shelter over his head. A judicial notice can be taken that in congested areas of this City, the old buildings which were constructed prior to September 1, 1940 are in extremely dilapidated condition and still are occupied by scores of people at the risk of their lives only because of their inability to secure any alternate accommodation. It is a bounden duty of the democratically elected Government to ensure that steps are taken to protect the shelter over the heads of unfortunate citizens. The buildings which are constructed for occupation of limited number of people are now occupied by desperately large number only due to scarcity of accommodation. The landlord of such buildings are not inclined to effect structural repairs or to undertake repairs due to exorbitant prices of the material and because of freezing of the rent prevalent in year 1940. The cumulative effect of all these factors is regular collapse of buildings resulting into loss of valuable human life. It was, therefore, incumbent upon the Government to take steps to ensure that structural repairs are carried out or dilapidated buildings are pulled down and reconstructed. Due to inability of the Government to generate sufficient financial resources and to persuade the owners to undertake the task, it was decided by the legislature to find out a solution by securing participation of the occupiers in stupendous task of the work of structural repairs or reconstruction. The advantage to the occupiers could be secured by requiring the occupiers to contribute towards the expenses of repairs or reconstruction and on an assurance that the occupiers would be owners of the premises on formation of Co-operative Housing Society. The Government rightly felt that the burden upon each of the occupier would not be so heavy in contribution of expenses in repairs compared to the advantage which would be secured by the occupier being the purchaser of the tenement. The submission of Shri Setalvad that the object of enactment of provisions of Chapter VIII-A is merely to carry out the work of structural repairs or reconstruction and had no nexus whatsoever to the object of distribution of material resources to subserve the common good cannot be accepted. The availability of the land in the City of Bombay is extremely limited and it is not possible to increase the available quantity of land and if the citizens are to be assured of a reasonable shelter, then it is necessary to distribute this meagre asset as equitably as possible to subserve the common good. They provisions of Chapter VIII-A confers right upon the Housing Society of the occupiers to enjoy additional F.S.I. then available to the owner of the premises and the additional F.S.I. is made available with an object that additional tenements would be constructed and some dishoused people can be provided with the shelter. In the year 1965, the State Government had appointed Bedekar Committee to examine the problem and the principal causes of collapses as found by the Committee to examine the problem and the principal causes of collaspes as found by the Committee are set out in the decision of the Supreme Court in the case of Vivian Joseph Perreira and another v. The Municipal Corporation of Greater Bombay and others, . The causes are:
(1) Indifference of owners to repair due to 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 sanitary services therein, and (5) Searing land values tempting owners to let their buildings collapse rather than continue to have them let out on frozen rents.
As observed by the Supreme Court in Basantibai's case, Article 39(b) is a futuristic mandate to the State with a message of transformation of the economic and social orders. The Supreme Court observed that expansive meaning to the pregnant words used with hopeful foresight should be given by the courts to bring social and economic justice in the context of material want and utter inequalities on a massive scale. We are, therefore, unable to accede to the submission of Shri Setalvad that the provisions of Chapter VIII-A are dehors of the object for which the Act was enacted, i.e., for securing the principles specified in clause (b) of Article 39 of the Constitution. In our judgment, the provisions are in furtherance of the object which the law desired to achieve by enacting Chapter V and Chapter VIII of the Act. In our judgement, apart from the declaration contained in section 14 of the Act, the provisions of the Act including provisions of Chapter VIII-A are entitled to protection of Article 31-C of the Constitution as each of the provisions have a direct bearing or nexus to the object of distribution of material resources of the community as best to subserve the common good.
10. To complete the judgment, we will examine the contention of the petitioners that the provisions of Chapter VIII-A of the Act are violative of Article 14 of the Constitution as the classification is unreal and the provisions are unreasonable. Before examining the relevant sections of Chapter VIII-A, a reference is required to be made to some of the decisions cited by Shri Setalvad to indicate as to what principles must be followed to determine whether the provisions of the statute are violative of Article 14 of the Constitution. The principles are well settled and it is unnecessary to set out the observations in various judgements cited like Shri Ram Krishna Dalmia v. Shri Justice S.M. Tendulkar & others, A.I.R. 1962 Supreme Court 552, Kunatiat Thathumani Deopil Nair etc. v. State of Kerala and another, The State of Rajasthan v. Mukanchand and Ors., and A.I.R. 1980 Supreme Court 1637, Federation of Hotel & Restaurant v. Union of India and others, save and except setting out the well established principles. In order to pass the test of permissible classification two conditions must be fulfilled, namely (i) that the classification must be founded which distinguishes persons or things that are grouped together from others left out of the group, and (ii) that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical, or according to the objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is well settled that the legislature understands and correctly appreciates the need of its own people and the laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. In order to sustain the presumption of constitutionality, the Court can take into consideration matters of common knowledge, matters of common report, the history of the times and can assume every state of facts which can be conceived existing at the time of legislation. With this background, it is now necessary to examine the relevant sections in Chapter VIII-A of the Act.
11. Section 103-A provides that the provisions of the Chapter shall apply to all the ceased buildings which are erected before September 1, 1940 and classified as Category A under sub-section (1) of section 84. The proviso prescribes that if out of a total number of occupiers of buildings falling under Category A, 50 per cent or more are using the tenements for commercial or non-residential purpose, then the provisions of Chapter are not attracted. Shri Setalvad submitted that there is no justification whatsoever to restrict application of Chapter only to buildings which are situated within Greater Bombay. The learned Counsel pointed out that the category of buildings in Categories A, B and C are made under section 84 for the purpose of determining the cess to be assessed on these buildings and liability to pay repairs and reconstruction cess is only in respect of buildings situated within Greater Bombay. It is not in dispute that the provisions of Bombay Building Repairs and Reconstruction Board Act, 1969 were applicable in respect of levy of cess to buildings in City of Bombay. It was contended that in case the object of the legislation is to preserve the old buildings by undertaking work of structural repairs or by reconstruction, then the object could not be limited only to buildings situated in Greater Bombay and creation of a class of buildings only in Greater Bombay is violative of Article 14 of the Constitution as the classification has no nexus to the object to be achieved. It was also urged that it cannot be assumed that only those buildings in Category A require structural repairs or are required to be reconstructed. It was submitted that the buildings which are constructed after September 1, 1940 and falling under Categories B and C may equally require structural repairs or even reconstruction and there is no rationale why legislation restricted the application of the provisions of Chapter VIII-A only to buildings falling within category A. Shri Setalvad submitted that the classification is not genuine and the Legislature blindly adopted the classification made for the wholly different purpose of levy of repairing and reconstruction cess by classification of different buildings. It was also contended that there are dilapidated buildings requiring structural repairs or reconstruction outside the limits of City of Bombay and, more so, in the old towns like Pune, Nasik, Kolhapur, etc., and the Legislature did not take into consideration the buildings in those cities and the Government is unable to explain why the application of provisions of Chapter VIII-A is limited only to buildings in City of Bombay. We are unable to accede to the submission of the petitioners that limiting the application of the provisions of the Chapter to buildings in the City of Bombay and to the buildings which were constructed prior to September 1, 1940 results into vice of discrimination. In the first instance, it must be remembered that it is not necessary for the Legislature to commence work of improvement of buildings all over the State at the same time and it is perfectly permissible to adopt new methods initially to a certain area. The implementation of the provisions of Chapter requires performance of several functions by the Board as well as the State Government and the machinery and the man--power available with the Board cannot attend to dilapidated buildings all over the State at the same time and, therefore, it was perfectly open for the Legislature to initially select an area where there is greater need to effect structural repairs or reconstruction of dilapidated buildings. It also cannot be overlooked that number of dilapidated buildings in City of Bombay are far large in number than those outside the City of Bombay and situated in districts. The pressure on the buildings and the amenities available in the buildings situated in City of Bombay is very heavy. The saline atmospheric conditions prevalent in the City and nearness to the sea and heavy monsoon contributes to rapid deterioration of the structures and, more so, where precautions are not taken to maintain them from time to time. The number of dilapidated buildings in the city and the available data about the rate of collapse of such buildings was available with the Legislature and it must be presumed that the Legislature must have decided to implement a new scheme of participation of occupiers in the structural repairs or reconstruction initially in the city in view of greater need to provide safety measures and the shelter to occupiers of buildings in the city. The contention that there are large number of buildings even in the City of Bombay which are constructed subsequent to September 1, 1940 and are in need of structural repairs and, therefore, grouping together of only those buildings which were constructed prior to September 1, 1940 is erroneous cannot be accepted. The Legislature has ultimately to draw a line and it is not possible with the limited resources available to attend to all the dilapidated buildings in the city at the same time. In our judgment, the complaint that the restriction of application of the provisions only to buildings constructed prior to September 1, 1940 and that too in the City of Bombay is discriminatory cannot be accepted. The State Legislature can always extend the application of the provisions of the Chapter to other areas by taking into consideration how the scheme functions in the City of Bombay. In our judgment, the challenge to provisions of section 103-A as being violative of Article 14 cannot be accepted.
12. Turning to section 103-B, it was contended by Shri Setalvad that the section is attracted only in respect of those buildings which require structural repairs or required to be reconstructed and there cannot be any dispute about the accuracy of the submission. Indeed, the Government accepted that the right conferred upon the occupiers under section 103-B is available provided the building requires structural repairs or is required to be reconstructed. Shri Setalvad submitted that the expression "structural repairs" is not defined for the purpose of Chapter VIII-A. The meaning of expression "structural repairs" is defined under section 2(36) and that definition can certainly be imported while considering the expression "structural repairs" in section 103-B. It was also submitted that though sub-section (1) of section 103-B refers to the application to the Board requesting the State Government to acquire the land in the interest of better preservation, the expression "better preservation" is not independent of the structural repairs and the submission is correct and deserves acceptance. The advantage of sub-section (1) of section 103-B is available provided the occupiers of the building are desirous of carrying out structural repairs or reconstruction as the case may be, and which is necessary. Shri Setalvad complained that the provisions of sub-section (1) are extremely vague and arbitrary and in support of the submission urged that the expression "occupier" as defined under section 2(23) of the Act will include even a rank trespasser. It was urged that the Legislature cannot deprive the owner of the property to confer rights on rank trespassers. The submission proceeds on the assumption that the expression "occupier" will take in its sweep even a trespassers, but, in our judgment, the assumption is ill-founded. The definition of expression "occupier" in section 2(25) is inclusive and Clause (e) covers person who is liable to pay to the owner damages for use and occupation of any land or building. It was contended that this clause enables the trespasser to claim that application can be filed by him as he is liable to pay damages for the use and occupation to the owner. We are unable to read Clause (e) to conclude that a trespasser is entitled to claim character of occupier. In our judgment, what the Legislature contemplated by clause (e) are such persons whose initial entry on the land or the building was in accordance with law but whose continuance thereon on termination of their right makes them liable to pay damages. For instance, a licensee in occupation of any land or building is covered by Clause (d) and if the licence under which the licensee is in occupation stands terminated, then such person will be required to pay to the owner damages for use and occupation. The legislature contemplated such kind of cases while enacting section 2(25)(e). We are not prepared to accept the contention that Clause (e) includes trespasser and that was also not the claim made on behalf of the State Government. Reference was made to the decision of the Division Bench of this Court reported in 1991 Maharashtra Law Journal 263, Taj Mohamed Yakub v. Abdul Gani Bhikan, and to which one of us (Pendse, J.) was a party. While considering an identical expression in section 2(e)(v) of the Maharashtra Slum Area (Improvement, Clearance and Redevelopment) Act, it was held that a person who wrongfully uses the land is liable to pay damages and, therefore, would be covered by the expression. The Division Bench put this construction on the clause in that Act by perusal of various sections of the Act which clearly contemplated that person in occupation of area declared as slum area irrespective of character of possession of such person is an occupier. It was held that the provisions were enacted for improvements of the slum area and unless a wider meaning is given to the expression, it will not be possible for the Competent Authority to evict the occupants from the building and also to carry out expansion of work of improvement of the slum area. It would also not be possible for the Competent Authority to recover from such trespasser expenses incurred by the Competent Authority for maintenance of works or enjoyment of amenities provided for improvement of the slum area and, therefore, a wider meaning was required to be given. In the present case, it was not necessary to extend such a wider meaning to clause (e) because the object of the present Act is entirely different from that of the Slum Areas Act. Shri Setalvad submitted that it is not permissible to read down the clause so as to exclude the trespasser but we are unable to accede to the submission for more than one reason. In the first instance, the plain reading of clause (e) excludes the rank trespasser in occupation and, therefore, there is no occasion to read down the provision and secondly even if it is necessary to read down clause (e), it is only for the purpose of achieving the object of the Legislature, and therefore perfectly permissible.
Shri Setalwad submitted that sub-section (1) of section 103-B is extremely vague and uncertain because right is conferred upon not less than 70% of the occupiers in the cessed building to move the Board and it is not clear as to whether 70% is to be determined by reference to the actual number of occupiers or the number of tenements in the cessed building. The learned Counsel urged that in most of the old buildings in the City, number of tenements are few, while number of occupiers is very large and if the right to apply is conferred to the number of occupiers irrespective of number of tenements, then that would create several problems. In our judgement, it is obvious from the plain reading of the sub-section that the right is conferred to apply provided not less than 70% of the occupiers come together and seek advantage of the sub-section and this number of 70% has to be determined with reference to the tenements and not to the actual number of persons in occupation. The number of persons in occupation may increase or decrease but the number of tenements can never increase or decrease and, therefore, the true test to determine whether 70% of the occupiers have come together to apply is to find out whether such occupiers are in possession of not less than 70% of the tenements in the building. In our judgment, the provisions are of beneficial nature and must be construed reasonably so as to achieve the object of the legislation. Shri Setalvad also submitted that sub-section (1) enables the occupiers to apply irrespective of any judgement, decree or order passed against the occupiers and in favour of the owner. The submission is that even if there is an order of eviction against an occupier and the owner is entitled to possession, still such person can join the number of occupiers for filing application and this is extremely unreasonable because the Legislature is creating a right in favour of person whose occupation is held by the Court to be without authority of law. We are not impressed by the submission. It is always open for the Legislature to validate the character of possession of any occupier and the Legislature has repeatedly done so in case of occupiers of buildings in Bombay. Under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, initially creation of a sub-lease was prohibited and the landlord used to obtain decree against the tenant on the ground of unlawful sub-tenancy. The Legislature having realised the difficulties of the sub-tenant stepped in and validated the possession of such sub-tenants irrespective of any decree or judgment passed by the Competent Court. The Legislature also stepped in when the possession of the licensees was regularised and the rights of the lessees were conferred on such licensees provided the licence was in existence on a particular date. It is ,therefore, obvious that the Legislature has ample powers to validate or regularise the character of possession of an occupier of the tenement in a building inspite of the fact that a Court has passed a judgment or a decree for eviction against such occupier. Such judgment or decree cannot prevent the occupier from joining the application as contemplated under sub-section (1) of section 103-B of the Act. Explanation II to the sub-section clearly provides that if any proceedings are initiated against such occupier either before or after making an application, the right of such occupier to join or continue to be a member of the Co-operative Society shall not be affected but the membership would be subject to the final decision of the proceedings. In other words, the Legislature has provided that the right of such occupier to continue to be a member is subject to the decision of the Court in proceedings instituted by the owner. It is required to be pointed out that the Chapter does not restrain the landlord from enforcing the judgment for recovery of possession against the occupier inspite of the fact that such occupier has joined in the application filed under sub-section (1).
It was also contended by the learned Counsel appearing on behalf of the petitioners that sub-section (1) does not make it clear as to what is the area which can be acquired for the benefit of the occupiers. The sub-section permits the State Government to acquire the land together with existing buildings thereon or where the owner of the building does not own the land underneath or appurtenant to such building but holds it as a lessee or licensee or where any person holds that land or building appurtenant or both under a lease or licence, then to acquire the right or interest of such person over the building or land both as lessees or licensees. The sub-section, therefore, makes it clear that it is not only the land underneath the building which can be acquired but even the land appurtenant to the existing building or the building which is required to be pulled down for reconstruction. Shri Setalvad complains that it is not clear from the provision of the Act as to what can be determined as land appurtenant to the building. It is not necessary for the Legislature to provide in the Act and which land can be considered appurtenant to the building must be left for determination of Land Acquisition Officer to whom proposal will be forwarded by the Board in accordance with sub-section (5) of section 103-B. The expression "appurtenant to the building" must be considered as understood in Common parlance and the land which is required to be kept open under the building regulations of the Corporation can be treated as appurtenant to the building.
13. Sub-section (2) of section 103-B provides that on receipt of the application, the Board shall after due verification and scrutiny approve the proposal, if it is considered in the interest of better preservation or necessary for reconstruction of the new building and then direct the Co-operative Society to deposit 30% of the approximate amount of compensation which would be required to be paid to the owner and then give intimation in that behalf of the owner. The plain reading of sub-section (2) makes it clear that duty is case upon the Board to verify, scrutinize the application and then grant the approval. Shri Setalvad submitted that the verification contemplated by sub-section (2) is not an empty formality and it is incumbent upon the Board to ascertain whether the application is made in respect of a building which strictly falls under section 103-A and really requires structural repairs or reconstruction. It is also necessary for the Board to ascertain whether the application is made by necessary number of occupiers. The learned Counsel urged that this enquire is not sufficient but the Board must also ascertain whether the applicants have requisite financial capacity to attend to the structural repairs or reconstruction and if the application lack such financial capacity , then the Board is bound to disapprove the proposal. Reliance was placed on the decision of the Supreme Court in the case of the Divisional Personal Officer, Southern Railway and another v. T.R. Chellappan, to urge what element would include the expression "consider". The elements which are required to be taken into consideration by the Board are several in number and it is not possible to lay down a strait jacket formula which must be adhered to by the Board. The nature of consideration may vary from case to case and some area of discretion must be left to the Board to determine which factors will be examined before approving or disapproving a particular proposal. The financial capacity of the applicants on the date of the application may not be relevant in every case because the applicants may be able to raise the requisite amounts either by securing loans from the financial institution or housing development boards. It is equally possible that the occupiers may collect the amount with a view to ensure that the shelter over their head is not lost.
Shri Setalvad submitted that the provisions of sub-section (2) are violative of principles of natural justice because the landlord is not given any opportunity while the Board is approving the proposal made by the occupiers. It was also urged that sub-section (4) provides that the State Government if satisfied about the reasonableness of the proposal received from the Board may approve the same. Shri Setalved submitted that neither the Board, nor the State Government is required to consider what landlord had to say before granting approval to the proposal of the occupiers and keeping out the landlord at the crucial stage amounts to violation of principles of natural justice. We are unable to find any merit in the submission. In the first instance, approval either by the Board or the State Government does not defeat or deprive any right of the landlord in the building. The approval by the Board or the State Government does not automatically lead to acquisition of the properties and sub-section (5) demands that on receipt of Government approval, the Board shall forward acquisition proposal to the Land Acquisition Officer for initiating land acquisition proceedings in accordance with sub-sections (3), (4) and (5) of section 93 of the Act. It is, therefore, clear that mere grant of approval by the Board or the State Government does not affect the rights of the landlord in the building and consequently, there is no requirement whatsoever of giving an opportunity to the landlord to show cause as to why the approval should not be given. Secondly, it must be remembered that the right conferred on the occupiers to make an application and approval thereof by the Board and the State Government is because of the failure of the landlord to take effective steps to carry out structural repairs or reconstruction of building. The occasion to make application arises because the dilapidated building needs immediate structural repairs or reconstruction and any delay in carrying out that exercise would lead to loss of human life as well as valuable property. In case, the contention of the petitioners is accepted, then the proceedings for grant of approval to the proposal either by the Board or the State Government would take years and the proposal can be successfully defeated by passage of time. Sub-section (2) also provides that after the amount of 30% of the approximate compensation is deposited by the applicants, then the intimation in that respect would be given to the owner and that makes it clear that the owner is made aware of the fact that a proposal has been received and approved by the Board. It is always open to the landlord to communicate his objections, if any, to the State Government, but for whose approval, the proposal cannot move, but to accept existence of a right in favour of the landlord to be heard before grant of an approval would make mockery of the provisions of the Chapter which require immediate attention to the proposal. Shri Setalvad then submitted that though it is undoubtedly true that sub-sections (3), (4) and (5) of section 93 provide for a reasonable opportunity to the owner of the building to be heard before the Land Acquisition Officer, the opportunity is futile because the Land Acquisition Officer is a subordinate officer and could not be expected to take a decision which is different from the Board or the State Government. We are not prepared to accede to the submission of the learned Counsel that the Land Acquisition Officer who is required to perform a statutory duty would surrender his judgment only because the State Government had taken a decision to approve the proposal made by the occupiers. Indeed, in every land acquisition proceeding under the Land Acquisition Act, the Officer commences proceedings only after the State Government or the Commissioner of the Division approves the proposal that the lands are required for a public purpose. It is futile to suggest that the Land Acquisition Officer will always surrender his statutory duties and straightaway proceed to acquire the buildings only because the Board and the State Government has given prior approval. The Land Acquisition Officer is required to ascertain as to whether the proposal made is viable and also whether the area sought to be acquired is required for reconstruction of the building. The Land Acquisition Officer has also determine what is the extent of the land which can be described appurtenant to the building. It is open for the owner to establish before the Land Acquisition Officer that none of the conditions precedent for attracting provisions of Chapter VIII-A are fulfilled , viz., the building is not constructed before September 1, 1940, and does not fall under Category 'A' or the requisite number of occupiers have not filed application, or the building does not require structural alterations or reconstruction etc., then the Land Acquisition Officer cannot exercise powers to acquire by publication of notification under sub-section (5) of section 93 of the Act. All these functions are required to be performed by the Land Acquisition Officer as a statutory duty and it is impossible to accede to the submission that reasonable opportunity provided to the owner of the building under section 93 is imaginary and not real. In our judgment, the owner has got more than sufficient opportunity to show cause why the occupiers should not be conferred with the advantage prescribed under sub-section (1) of section 103-B of the Act and the contention that the provisions of sub-sections (2), (4) and (5) are violative of principles of natural justice is required to be turned down. Reference was made by Shri Setalvad to passage at Page 525 of Wade's Administrative Law, Sixth Edition, to urge that natural justice though is concerned with the exercise of power which produces legal result and in some way alter to owner's legal disadvantage, still some preliminary steps which may not involve immediate legal consequences also attracts principles of natural justice. It was contended that protection of fair procedure is needed throughout, and the successive steps must be considered not only separately but as a whole. Reference was also made to the observation made in paragraph 25 of decision reported in 1990(2) Supreme Court Cases 48, Management of M/s. M.S. Bharat Bally Engineering Co. Ltd. v. State of Bihar and others. We are unable to accept the contention that at every stage of the consideration of the proposal made by the occupiers, the owner of the building must be given an opportunity to show cause why approval should be granted.
Shri Setalvad then submitted that the provisions of sub-section (2-A) are vague and entirely unreasonable. There is no merit in this submission. Sub-section (2-A) provides that the power of the Board to approve the proposal shall not be affected where the owner has undertaken the work of repairs after the date of the application filed by the occupiers. The learned Counsel suggests that the owner after the date of application may have completed the work of structural repairs and if so, then there is no reason why the proposal should go through. The expression used in sub-section (2-A)(a) is that where the "owner has undertaken the work" after the date of application and we are not prepared to accept the contention of Shri Setalvad that the expression 'undertaken' means completion of work. The expression "undertaken the work" means that the landlord has taken some steps in furtherance of the work of repairs and can never be equated with the completion of the work. A landlord may very well make a show of undertaking the work of repairs after realising that the occupiers have made application to the Board under sub-section (1). The Legislature was keen that once the application is lodged by the occupiers, then nothing which will happen subsequent to the date should debar the Board from considering the proposal. It is possible in a given case that if the work of structural repairs is satisfactorily completed before the approval is granted by the Board or the State Government, then those authorities may not grant approval or the Land Acquisition Officer may decline to acquire the building, and we are unable to find any on reasonableness in the provisions of sub-section (2-A)(a). Shri Setalvad then submitted that Clause (b) of sub-section (2-A) provides that the powers of the Board to approve the proposal shall not be affected even if the percentage of the occupiers who had agreed to become members reduced to less than 70%. The learned Counsel submitted that this clause is clearly arbitrary and there is no rational why the consideration of proposal should go through even when the minimum number of occupiers required to make application are not available after the date of application. The intention of the Legislature in enacting this clause is obvious. The Legislature did not want the landlord to defeat the consideration of the application by persuading some of occupiers to withdraw their participation in the proposal. The intention is clear that once the requisite occupiers make proposal, then the Board must proceed to examine it and grant approval or disapproval and reduction of number of occupiers at the later stage shall not affect the powers of the Board to consider the proposal. It is possible in a given case that some of the original applicants may withdraw, but then other applicants would join. It is equally possible that some of the applicants may be persuaded to withdraw after verification and scrutiny undertaken by the Board has proceeded to a final stage, and the Legislature was, therefore, desirous of ensuring that object of the Chapter is not defeated by such happenings. In our judgment, this clause also does not suffer from the vice of unreasonableness and the challenge to sub-section (2-A) of section 103-B is without any merit.
14. Shri Setalvad submitted that sub-section (4) of section 103-B requires the State Government to be satisfied about the reasonableness of the proposal and this satisfaction should be objective in nature but the Act does not provide for any machinery or procedure to indicate as to how the State Government should reach satisfaction. We are unable to find any merit in the contention. It is true that satisfaction of a proposal should be purely objective and not subjective. The satisfaction of proposal would depend upon the facts and circumstances of every case and there cannot be any rule of thumb that the approval or disapproval should be given irrespective of the facts and circumstances. The Legislature has taken precaution to have checks and counterchecks by the providing that the State Government would examine the proposal made by the occupier and approved by the Board and only on satisfaction would convey the approval to the Board. In our judgment, sub-section (4) is a salutory principle to ensure that every proposal is not accepted without examining the genuineness of the same. The State Government has retained the right of commencing proceedings of acquisition, the right being sovereign in nature and the Legislature was not willing to delegate this right to the Board created under the Act. In our judgment, sub-section (4) is a safeguard in the interest of the owner that the approval is not granted unless the State Government is satisfied about the genuineness and viability of proposal. It was faintly urged that the section does not provide any time limit for grant of approval either by the Board or by the State Government. We are unable to find how a legislative provision would be unreasonable merely because time limit is not fixed for grant of approval. It is obvious that the nature of the proceedings before the Board and the State Government are such which requires immediate attention and the Board and the State Government are bound to grant approval within a reasonable time. It is not necessary to lay down what should be a reasonable time, because that would depend upon the facts and circumstances of each case.
15. Shri Setalvad then submitted that the provisions of section 103-C are also unreasonable and extremely vague. We are unable to find any merit in the contention because the section deals with the circumstances which take place after the owner is divested of the title to the building or land in acquisition proceedings. Sub-section (1) of section 103-C provides that any land transferred to a Co-operative Society shall be used for the purpose for which it was used before acquisition and the Society shall carry on structural repairs or reconstruct as the case may be and for no other purpose. This sub-section ensures that Co-operative Society or the occupiers do not use the premises for any purpose other than one for which it was earlier used. It also imposes an obligation upon the Housing Society to carry out structural repairs or reconstruction of the building, as the case may be. Sub-section (2) of section 103-C prevents a member of the Society from transferring the interest in a tenement, while sub-section (3) deals with the failure of the Society to carry out structural repairs or reconstruction and the consequence flowing there-from. Sub-section (3) provides that in case the Co-operative Society or the occupiers contravenes the provisions of sub-section (2) by effecting transfers or fails to carry out the structural repairs or the reconstruction, then the authority constituted under the Act shall resume such land and transfer the same to any other Co-operative Society of the occupants of the tenements in the transit camp. The Legislature has clearly provided that the Co-operative Society of the occupiers is bound to carry out the structural repairs and shall not transfer any tenements. In case the society is unable to carry out structural repairs or reconstruction, then the authority will resume the building and hand over to another Co-operative Housing Society of persons who are residing in transit camp due to dishousing. The persons whose tenements have collapsed in a building crash are provided accommodation in transit camp for a short duration and the legislation provides that if one Society fails to carry out structural repairs, then it should be given to another society but consisting only of members who are residing in transit camp and are badly in need of shelter in the tenements. We are unable to find what is unreasonable in this provision. A faint attempt was made to urge that the sub-section does not provide that the second society to be formed is also under the same obligation to carry out structural repairs. It is impossible to find any merit in the submission because second society is bound to have the same rights and obligations as the first Society. In any event, we are unable to appreciate why the former owners who are divested of title should worry about the consequential steps to be taken under the Statute. Once the owner of the building is divested of the title in acquisition proceedings and is paid compensation as provided under the Act, then the building vests in the authority or the Board and it is not for the petitioners to debate as to what should be done in case the first Society fails to carry out structural repairs. It was not contended that in case any of the tenements fell vacant in the Society, the Chapter does also provide as to how those tenements should be disposed of. It is obvious that the society can dipose of the tenements only to those who are needy persons and who will be selected by the authority for accommodation.
16. Shri Setalvad then referred to the provisions of section 103-E (1) and (2) and urged that the owner who is in occupation of a part of the building is permitted either to join the Co-operative Society or to continue as a tenant of the Society after acquisition. The learned Counsel urged that the rent payable by the owner to the society is to be determined either under the agreement or the Court constituted under the Rent Act has to fix the standard rent. The grievance of Shri Setalvad is that before the standard rent is determined by the Court, the owner is compelled by the provisions of sub-section (2) to pay the rent as demanded by the Society. It is undoubtedly so but the section also provides that in case the Court fixes the standard rent and finds that the rent demanded by the society is unreasonably excessive, then the society is bound to refund the excess rent recovered along with interest at the rate of 6% per annum. Shri Setalvad submitted that interest of 6% per annum is inequitable. It is not possible to strike down the legislation on the ground that the rate of interest is negligible. It cannot be overlooked that while determining the rate of interest, the Legislature must have borne in mind that the occupiers are driven to form a society and spend a considerable amount for structural repairs though it was the duty and the obligation of the owner to do so according to the provisions of section 23 of the Rent Act and in which owner had completely failed. The insertion of Chapter VIII-A in the Act is because of the failure of the owner to carry out his obligations and such owner cannot expect that the he must get interest at the rate which is prevailing in the market. In any event, we are unable to find any unreasonableness in the provisions of section 103-E (1) and (2) to conclude that the provisions of Chapter VIII-A are either unreasonable or violative of fundamental right guaranteed under Article 14 of the Constitution.
Referring to provisions of section 103-I, it was contended by the learned Counsel that the area of tenement available in the reconstructed house cannot be more than 70 sq. meters and because of the availability of higher F.S.I. as provided under section 103-H to the Co-operative Society, it is permissible for the society to construct more tenements. Shri Setalvad wondered whether members of any Housing Society in their senses would ever construct additional tenements to provide for persons who are without shelter and are forced to reside in transit camp. The learned Counsel indicated that additional tenements would be constructed provided the members of the Housing Society have some incentive and such incentive is not possible when the additional tenements are to be handed over to the persons who have no shelter. Shri Setalvad wondered whether there should be a provision compelling the society to build to the maximum permissible extent. We are referring to the submission only out of respect to the learned Counsel and we do not appreciate how it is permissible for a Court to strike down the legislation only because it is possible to improve the legislation. The ambit of the enquiry in the petition under Article 226 of the Constitution cannot entitle the Court to legislate and is required to be limited only to ascertain whether any of the provisions of the Chapter lead to violation of fundamental rights guaranteed under Articles 14 and 19 of the Constitution. We are unable to accede to the submission that either of the classification of the buildings is discriminatory or any of the provisions of Chapter VIII-A are discriminatory or unreasonable. In our judgment, the steps taken by the Legislature to ameliorate the hardships suffered by the occupiers of the dilapidated buildings in Bombay are laudable and we hope and trust that the occupiers will be in a position to reap the benefit of the legislation and the instances of house collapses leading to loss of human life will be avoided hereafter. In our judgment, the challenge to the Constitutional validity of the provisions of Chapter VIII-A of the Act is without any substance apart from the fact that challenge is not open in view of the protection of Article 31-C of the Constitution. The petitioners are, therefore, not entitled to any relief and the petition must fail.
17. Accordingly, rule is discharged with costs.