Andhra HC (Pre-Telangana)
M. Sreeramulu vs Tahera Yousuf Kadri on 16 March, 2000
Equivalent citations: 2000(3)ALD173, 2000(2)ALT727
Bench: B. Sudershan Reddy, I. Venkatanarayana
ORDER M.S. Liberhan, C.J.
1. Briefly undisputed sequence of events to answer the question referred to Full Bench are:
The construction of the demised premises occupied by the appellant (hereinafter referred to as 'tenant') would be deemed to be complete on 1-1-1972 as defined under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (hereinafter referred to as 'the Act'), as the tenant occupied the same on this date. Suit for possession and mesne profits was instituted on 30-11 -1981 by the respondent (hereinafter referred to as 'landlord'). The Supreme Court in Motor General Traders v. State of Andhra Pradesh, AIR 1984 SC 121, vide its order dated 26-10-1983 declared Section 32(b) of the Act granting exemption to the newly constructed buildings from the applicability of the Act as ultra vires.
2. The trial Court dismissed the suit, holding, it not maintainable, in view of Section 32(b) of the Act, providing for exemption from the applicability of the Act to the newly constructed buildings, having been struck down by the Supreme Court.
3. On appeal, learned single Judge came to the conclusion that the suit was within ten years i.e., within the period of exemption from the applicability of the Act. Suit was decreed for possession and mesne profits. Thus the appeal was allowed.
4. -, Tenant impugned the judgment of the learned single Judge in letter patent appeal, inter alia on the ground that the words "with effect on and from 26th October, 1983" in the notification means the building was not exempt from the operation of the Act on the date of its completion i.e., 1-1-1972. The period of exemption counted either retrospectively or prospectively, the period of ten years is to be counted from 26th October, 1983. It was averred that prior to 26th October, 1983 the Act was applicable to all buildings in view of the judgment of the Supreme Court declaring Section 32(b) ultra vires.
5. Landlord contended that the object behind GO was only to cover up the gap, the period for exemption between the date of the Supreme Court judgment and the date of issuance of the G.O. Ms. No.636, dated 26th October, 1983 and it cannot be the cut-off date. Period of ten years need not precede that date. The learned single Judge observed "the date of issuance of G.O. Ms. No.636 dated 26th October, 1983 or the date of its publication in A.P. Gazette on 2-1-1984 are of absolutely no relevance for the purpose of computing ten years period specified in the G.O. What is relevant is only the age of the building and its rent as on the date of institution of the suit. In the present case, the suit was instituted on 30-11-1981. It is already held that the relevant date for the purpose of computing ten years is 1-1-1972 i.e., the date of occupation of the mulgies by the tenant-DW1. There should therefore be no hesitation to conclude that the suit for eviction of four mulgies was filed within ten years from the date on which their construction was completed".
6. The principle that exemption applied to all buildings for a period of ten years from the date of the construction whether the construction was before or after G.O. Ms. No.636 was accepted. Reference was made to Kerala Transport Company v. Atul Kumar Agarwal and etc., . In R.K. Gupta v. Sirtaj Koran, 1989 (1) ALT 551, Court dissented from insofar as it laid down the principle that no decree can be passed against the tenant either by the original or Appellate Court, when once the ten years period expired during pendency of the suit, appeal, or revision. In M V Subba Rao v. N. Koteswara Rao, , it was observed that the contention that suit filed after the effective date of exemption would only be saved was rejected. The Counsel assailed the correctness of the principle laid down in the above-referred decisions of Division Bench. It was noticed though the question of the applicability of exemption was considered in the aforementioned cases, the question, whether ten-year period should be calculated with reference to the crucial date 26-10-1983 in the light of the language employed in G.O. Ms. No.636 was not considered. Thus the question was referred to the Full Bench for decision.
7. The State Government in exercise of powers under Section 26 of the Act, vide G.O. Ms. No.636, dated 29-12-1983 published in A.P. Gazette on 2-1-1984, exempted all the buildings from the applicability of the Act for a period of ten years from the date on which their construction was completed.
8. With the object to bring about uniformity in the applicability of Rent Control Laws in the State, A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 was enacted. It provides for fixing of the fair rent. It mitigates the hardship of the tenant by regulating ejectment on specified grounds. At the same time providing incentive for construction of new building, renovation of old building. It balances the rights of tenant and landlord taking into consideration cost of inflation, economic condition of the landlord, providing an opportunity to construct new buildings and realise the major part of their investment spent from life savings by exempting the building from operation of the Act. The Act consolidated and amended the law relating to lease of building, control of rent thereof, prevention of unreasonable eviction of tenant therefrom, etc. Section 26 of the Act empowered the Andhra Pradesh Government to exempt from all or any of the provisions of the Act, subject to such condition specified in the notification any building or class of building. Section 32, at the time of enactment, provided that the Act would not apply to building owned by the Government or to any building constructed on or after 26-8-1957.
9. The Supreme Court in Motor General Traders v. Stale of A.P. (supra) declared Section 32(b) being violative of Article 14 vide its order dated 26-10-1983, observing that the reason is the soul of law. When the reason for any particular law ceases so does the law itself. It further took notice of the fact that with the passage of time the validity of historical consideration on which the provisions of the Act are founded wear out and continuance of the provisions throw themselves open to challenge being discriminatory especially when the exemption was provided from the operation of the Act, the classification of building into two categories was not on historical or geographical reason but on economic one. Exemption was granted by way of incentive to encourage the building activity. It would be expedient to reproduce the observations of the Supreme Court in verbatim.
The long period lapsed after the passing of the Act itself serves as a crucial factor in deciding the question whether the impugned law has become discriminatory or not because the ground on which the classification of the building into two categories is made is not historical or geographical one but is an economic one. Exemption was granted by way of incentive to encourage the building activity and in the circumstances such exemption cannot be allowed to last for ever". At the same time took notice of the principle that time does not run in favour of Legislation. After referring to various judgments the Hon'ble Supreme Court further observed:
"Having regard to the history of Legislation under review we are of the view that the Act has to be sustained even after striking down clause (b) of Section 32 of the Act. The effect of striking down the impugned provision would be that all buildings except those falling under clause (a) of Section 32 or exempted under Section 26 of the Act in the areas where the Act is in force will be governed by the Act irrespective of the date of their construction".
The Hon'ble Supreme Court further observed:
"We do realise the adverse effect of this decision on many who may have recently built houses by spending their life saving or borrowing large funds during this inflationary dates at high rates of interest on the expectation and belief that they would not be subjected to restriction imposed by the Act. The incentive to build provides a rational basis for classification and it is necessary in the national interest that there should be freedom from restriction for limited period of time. It is always open to the State Legislature or the State Government to take action by amending the Act itself or under Section 26 of the Act as the case may be not only providing incentive to persons who are desirous of building new houses as it serves a definite social purpose but also to mitigate the rigour to such class of landlords who may have recently built their houses for a limited period as was done in the Union Territory of Chandigarh as brought out in the recent judgment in MA. Punjab Tin Supply Company v. Central Government, AIR 1984 SC 87. The question whether new Legislation should be initiated to exempt newly constructed building for a limited period or time on the pattern of similar-Legislation undertaken by different Stales or to exempt such class of buildings for a given number of years from the provisions of the Act by issue of notification under Section 26 of the Act is one for the State Government to decide."
10. In view of the observations made by the Hon'ble Supreme Court and to ameliorate the hardship of the landlords who under the bona fide belief that building would be exempt from operation Of the Act constructed the building, and taking into consideration the economic viability by incurring debts, etc., and the situation arising because of declaration of Section 32(b) as ultra vires, while leaving open and giving right to the State to grant exemption with respect to the applicability of the Act for limited period of time after the building is constructed in exercise of power under Section 26 of the Act, with an object not only to provide incentive to the persons who are desirous of building new houses as it serves definite social purpose but also to mitigate the rigour to such class of persons and the requirement of protection of the tenants of middle class or lower middle class the Government decided to exempt all new buildings for a period of ten years from the date of construction with rent not more than Rs.1,000/- p.m. from the provisions of the Act, and issued the notification dated 29-12-1983. It would be expedient to reproduce the notification to answer the question raised, in verbatim, which runs thus:
"In exercise of the powers conferred by Section 26 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (Andhra Pradesh Act XV of 1960), the Governor of Andhra Pradesh hereby exempts with effect on and from the 26th October, 1983, from the operation of the provisions of the said Act-
(a) All buildings for a period often years from the date on which their construction is completed; and
(b) Buildings the monthly rent of which exceeds rupees one thousand".
Explanation :--For purpose of clause (a) the construction of a building shall be deemed to have been completed on the date on which the completion thereof is reported to or otherwise recorded by, the local authority having jurisdiction, and in the absence of any such report or record the date on which it is actually occupied (not including occupation merely for the purpose of supervising the construction or guarding the building under construction) for the first time :
Provided that there may be different dates of completion of construction in respect of different parts of the building which are designed as separate unto or occupied separately by the landlord or/ and one or more tenants or by different tenants".
11. The learned Counsel for the appellant emphasised that the exemption granted for the period of ten years is to be counted with effect from 26-10-1983 retrospectively as well as prospectively in view of the language used to the effect "hereby exempts with effect on and from 26-10-1983". It was argued as a necessary corollary that on the date the suit was filed in 1981 the building was not exempted from the operation of the Act; consequently, the notification issued does not come to the rescue of the landlord as ten years period to be counted either forward or backward with effect from 26-10-1983 has come to an end and the exemption granted was not applicable to the building in dispute inasmuch as the building was neither exempted under Section 32(b) nor under the notification.
12. In order to support his submissions, emphasis has been laid on the principle that Legislation does not mince words, the words in the notification ""with effect from and with effect on" stand for that ten years period of exemption would be counted retrospectively from 29-12-1983. Conceding, the building having been constructed and completed on 1-7-1972 it would not fall within this exemption.
13. Reliance was placed on Motor General Traders v. State of Andhra Pradesh (supra) and Mohinder Kumar v." State of Haryana, AIR 1986 SC 244. He relied on Dinesh Chandra Sangma v. State of Assam, (1977) 4 SCC 441, wherein the cardinal rule of construction has been observed to the effect that no word should be considered redundant or surplus in interpreting the provision of a statute or a rule.
14. Further reliance was placed on M/s. Punjab Tin Supply Company v. Central Government, AIR 1984 SC 87. In support of the principle that retrospective effect may be given where the language used necessarily implies that such retrospective operation is intended. The question whether statutory provision has retrospective effect or not depends primarily on the language in which it is couched. If the language is clear and unambiguous, effect will have to be given to the provision under question in accordance with its tenor. If the language is not clear then the Court has to decide whether in the light of the surrounding circumstances retrospective effect should be given to it or not.
15. Reliance was placed on the observations of the Division Bench in Kerala Transport Company v. Atul Kumar Agarwal (supra) to the effect that after the G.O. Ms. No.636, dated 29-12-1983, having been issued after taking notice of the judgment of the Supreme Court declaring Section 32(b) as being ultra vires, the order of exemption From the applicability of the Act, having been passed on 29-12-1983 the exemption applies to all buildings for a period often years from the date of their construction whether constructed before or after the issuance of the above referred Government Order. It was found that the exemption was held to apply to buildings constructed anterior to the Government Order as well as those constructed subsequent thereto.
16. The learned Counsel for the apepllant relied on the principle of interpretation of statutes as laid down by the Hon'ble Supreme Court in M/s. Girdhari Lal and Sons v. Balbir Nath, AIR 1986 SC 1499, to the effect:
"So we see that the primary and foremost task of a Court in interpreting a statute is to ascertain the intention of the Legislature, actual or imputed. Having ascertained the intention, the Court must then strive to so interpret the statute as to promote/advance the object and purpose of the enactment. For this purpose, where necessary the Court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the plainness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing, the written word if necessary".
17. The plain reading of the Government Order provides that the State Government in view of the observations made by the Hon'ble Supreme Court in Motor General Traders v. State of Andhra Pradesh (supra) that the State is at liberty to grant exemption from applicability of the Act to the buildings provided on 26-10-1983 that the building would be exempt from the applicability of the provisions of the Act for a period of ten years form the date of construction. The plain meaning thereby is that on 26-10-1983 no rent Act was applicable to the building for a period of ten years from the date of construction. It categorically leads to an inference that the exemption from the operation of the Act would be operative not from the date 26-10-1983, as terminus quo but for the period of ten years, which period would commence for exemption from the applicability of the Act from the date on which the construction is completed. In our considered view if the submission made by the learned Counsel for the appellant is taken to be correct that the exemption has been granted to the buildings whose construction was completed on 26-10-1983 or thereafter, it would lead to anomalous situation inasmuch as that not only the words "new buildings" will be rendered redundant but even the period of ten years from the date of construction would be deemed to be substituted i.e., from the date of issuance of the notification i.e., 26-10-1983 which is neither the object nor the intention of the notification. The object, as referred to above, is to mitigate the economic hardship with which a person constructs the building creating the class on the basis of economics for exemption from the rigours of the rent laws for a period often years from the date of construction so that he may ameliorate his economic condition i.e., he is able to clear off his debts which he might have incurred by raising loans, etc., within this period and thereafter is able to decide to rent it out or do his own business.
(i) It is well-recognised principle, that choosing and picking out one clause for interpretation is not permissible secondly natural meaning should be given to the statute or the notification.
(ii) Meaning of the notification should be sought from itself.
(iii) Interpretation should be given, as well as the meaning, to the words, which give effect to all the clauses and to make it practically workable. It must not be construed in isolation but must be done harmoniously and in particular context in which it is set. Anomalous results should be avoided.
(iv) In Ms. HM.K. Ansari and Company v. Union of India, AIR 1984 SC 121, rule interpretation recognised is to the effect that the meaning of ordinary words is to be found no so much in etymological propriety of language nor even to the popular use as in the subject and context in which they are used and the object, which is intended, to be retained. The context, collocation of particular expression may show that it was not intended to be used in the sense it ordinarily bears. The language is at best an imperfect medium of instruction and variety of meaning lie in the expression. The exact colour and shape of the word or expression should not be ascertained by reading it in isolation but it should be read structurally and in its context, for its meaning may vary with the contextual text.
(v) One has to keep in mind the need of the society the Legislature intended to meet. While giving the meaning, object and reasons of the notification, background and history of its issuance even cannot be totally oblivious of it. While exploring and giving meaning to the words, sine posts is the context, the subject matter, the effect, consequences are the spirit and reason of the law.
18. Keeping in view above principles in our considered view, the Act was enacted in I960, when Section 32(b) envisaged non-
applicability of the Act to the buildings constructed on or after 26-8-1957 from the applicability of the Act for an indefinite period. The Supreme Court observed that non-providing of limited period for the non-applicability of the Act is arbitrary and is violative of Article 14 of the Constitution, while at the same time upholding the provision, Section 26, empowering the Government to exempt, subject to any condition or term, any specified building or class of buildings from all or any of the provisions of the Act. Section 26 reads as under:
"Notwithstanding anything in this Act the Government may, by notification in the Andhra Pradesh Gazette, exempt subject to such conditions and terms, if any, as they may specify in the notification, any building or class of building from all or any of the provisions of this Act".
19. Reading Section 26, on anvil of above principles concomitant emerges for granting exemption from the applicability of the Act: (i) that the Government may by notification, (ii) exempt any building or class of buildings, (iii) subject to condition and term, and (iv) from any particular provision or from all provisions of the Act.
20. The State, in view of the judgment of the Supreme Court, keeping in view the observations made categorically indicating and referring that the State, in exercise of powers under Section 26 of the Act can exempt any class of building, came forward to fill up the gap or the void created because of declaration of Section 32(b) as ultra vires, granted the exemption for a period of ten years, from the applicability of the Act on 26-10-1983, to all new buildings constructed. Thus, from a reading of the notification in its totality, while keeping in view above referred principles of interpretation, it emerges that exemption from the applicability of the Act to the buildings for a period of ten years from the date on which their construction was completed was granted on 26-10-1983. Thus, implicitly it is discernible that all new buildings are exempted from the operation of the Act, irrespective of the fact that the exemption was granted on 26-10-1983. Exemption operates retrospectively and prospectively.
21. We are constrained to observe that if the meaning given by the learned Counsel for the appellant to the words "on and from 26-10-1983" is to be given that only two classes of buildings i.e., the buildings constructed prior to 26-10-1983 and the buildings constructed from 26-10-1983 for ten years would be exempt leads to anomalous interpretation and renders the very object of the notification to fill up the void created by the declaration of Section 32(b) as ultra vires by granting exemption to the buildings constructed for a period of ten years nugatory. The tenor, text and the emphasis laid for granting exemption of the building from operation of the Act is the time factor i.e., the building would be exempt from operation of the Act for a period of ten years. Thus, terminus quo for exemption of the buildings from the operation of the Act would not be the date of granting the exemption, but is the date on which their construction is completed. In our considered view, granting of exemption on 26-10-1983 from the operation of the Act would mean that all buildings constructed after the enactment of 1960 Act for a period often years would be exempted from the operation of the Act. The interpretation put by us obliterates the vice of indefinite period suffered by Section 32(b). It also obviously means the object of granting incentive not only for the new constructions in future but also provides relief to the persons who constructed buildings by employing their financial resources under a pious hope that the buildings would not be subject to any restriction imposed by the Act and the would be able to meet their financial liabilities by leasing out for a specified period, which is the object of issuance of G.O.Ms.No.636, dated 29-12-1983.
22. Lastly and not leastly, there is no gain saying that from a reading of the notification in pith and substance it is categorically discernible that new buildings have been exempted from the operation of the Act on 26-10-1983 for a period often years from the date the construction is completed. Date specified in the notification is for the exemption of the building from the operation of the Act, not the construction. The statutory period of exemption from the operation of the Act is ten years and terminus quo for commencement of the exemption for the new building is ten years from the date on which the construction was completed.
23. The interpretation put by us is inconsonance with the observations of the Hon'ble Supreme Court which is binding on us i.e., to the effect that the State is at liberty to grant exemption from the applicability of the Act for a specified period subject to the condition provided in the exemption in exercise of the powers under Section 26 of the Act as reproduced in the earlier part of the judgment.
24. The finding and observations of the learned single Judge that it is not the date of the Government Order which is material but it is the date of construction of the building which is material and it is the construction which is exempted from the operation of the Act and the exemption from the operation of the Act came into force on and from 26-10-1983 are inconsonance with our findings referred to above.
25. From the plain reading of the Government Order also, in our considered view, the exemption operates from the date the Act came into force i.e., it is the building, which is exempted from operation of the Act, and the exemption has come into operation on and from 26-10-1983. It is the operation of the Act, which got eclipsed from its operation for a period of ten years from the date of construction of the building. Any other interpretation will lead to an anomalous situation i.e., only building constructed on or after 26-10-1983 would be exempted, thus, denuding the State of its power of exempting the buildings from the operation of the Act in view of the peculiar situations prior to that in exercise of powers under Section 26 of the Act which have been upheld. Such an interpretation cannot be given which obliterates the exercise of jurisdiction of the authority.
26. There is no gain saying in the proposition of the learned Counsel for the appellant that when exemption is granted it must be necessarily from a certain date and that date must be rationally chosen or reasonably chosen. As a broad proposition of law there cannot be any dispute with the proposition. As observed above, reading of the notification makes it obvious and rational that the date of exemption of the building from the operation of the Act has been chosen to be the date of the completion of the building for a period of ten years though such an exemption from the operation of the Act has been provided with effect on and from 26-50-1983. It stands to reason too that in view of the judgment of the Hon'ble Supreme Court which was delivered on 26-10-1983 declaring Section 32(b) as ultra vires solely on the ground that the exemption has been provided for an unlimited period and keeping it open for the State to provide exemption for a limited period the State with an object of providing exemption considering the economic conditions, incentive for new buildings, balancing the hardships of landlord and tenant provided the exemption for a period of ten years, thereby complied with the observations of the Hon'ble Supreme Court specifying the exemption for a number of years. The interpretation that exemption has been provided only in future i.e., from the date of notification or from thereafter would result in draconian rule of law that a person having constructed a building by taking loan on a categorical understanding that the building would be exempt from operation of the Act for ten years would be rendered helpless.
27. We find no force in the submissions of the learned Counsel for the appellant that a building constructed within ten years prior to 26-10-1983 or after the operation of the Act would not be considered to be a new building. The word "new" has to be read in the context and texture of the statute. Newly constructed building does not stand for a construction one week old or ten years old. It is a relative term. It is a policy decision for the authority to take. The authority in its wisdom fixed ten years period to define a building as a newly constructed building and exempted from the operation of the Act.
28. In view of the observations made above, we are of the considered view that the law laid down in Kerala Transport Company v. A. Kumar Agarwal (supra) and R.K. Gupta v. Sirtaj Karan (supra) is in conformity with the statutory notification.
29. The answer to the question, whether ten years period should be calculated with reference to the crucial date 26-10-1983 in the language employed from G.O.Ms.No.636 or from the date of completion of building, in view of the observations made in the earlier part of the judgment, we are of the considered view:
(i) That exemption from the operation of the Act has been granted to all newly constructed buildings irrespective of the date of construction treating them as a class of new buildings;
(ii) The exemption from the operation of the Act would be ten years; and
(iii) The exemption would commence from the date of completion of the building.
30. Consequently, the question referred to the Bench is answered accordingly.