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39. The above discussion is relevant because we must understand the reason why Section 3(1)(b) came to be enacted. As stated above, in our view, with the offer of an economic package to the landlords, the legislature has tried to maintain a balance. The provisions of the earlier Rent Act, as stated above, have become vulnerable, unreasonable and arbitrary with the passage of time as held by this Court in the above judgment. The legislature was aware of the said judgment. It is reflected in the report of the Joint Committee. In our view, the changes made in the present Rent Act by which landlords are permitted to charge premium, the provisions by which cash-rich entities are excluded from the protection of the Rent Act and the provision providing for annual increase at a nominal rate of 5% are structural changes brought # 15/28 # This Order is modified/corrected by Speaking to Minutes Order CRA-12-13.doc about by the present Rent Act, 1999 vis-a-vis the 1947 Act. The Rent Act of 1999 is the sequel to the judgment of this Court in the case of Malpe Vishwanath Acharya (supra).

46. According to the respondents, the words 'PSUs' in Section 3(1)(b) has to be read with the words any corporation established by or under Central or State Act. In other words, according to the respondents, only those PSUs which are established by or under any Central or State Act alone stand excluded from the protection of the Rent Act. According to the respondents, PSUs which are Government companies incorporated under Section 617 of the 1956 Act are entitled to the protection as they are not expressly excluded under Section 3(1)(b). We do not find merit in this submission. Firstly, it may be noted that several entities have been enumerated in Section 3(1)(b), namely, banks, PSUs or statutory corporations, foreign missions, international agencies, multinational companies and private limited and public limited companies having a paid up share capital of Rs.1,00,00,000 or more. As stated above, the said Rent Act, 1999 has brought about structural changes in the legislation. In this case, it was open to the legislature to opt for any of the tests, namely, test of origin, test of public character of the functions performed by each of # 16/28 # This Order is modified/corrected by Speaking to Minutes Order CRA-12-13.doc these entities, test of public character of each of the undertakings, test of agency or instrumentality, test of monopolistic status, test of mobilization of resources etc. In the present case, we find that the legislature has opted for an economic criteria, namely, entities which are in a position to pay rent at market rates are to stand excluded from Rent Act protection. This is the test of Financial Capability. This is the golden thread which runs through Section 3(1)(a). Be it banks, PSUs, statutory corporations, multinational companies, foreign missions, international agencies and public and private limited companies having a paid up share capital of Rs.1,00,00,000 or more stand excluded from the Rent Act protection. This criteria has been selected by the legislature knowing fully well that each of these entities including PSU s can afford to pay rent at the market rates. Secondly, we have given in-depth consideration to the contention advanced on behalf of the respondents on the interpretation of Sec. 3(1)(b).

Applying this test, we hold that Section 3(1)(b) clearly applies to different categories of tenants all of whom are capable of paying rent at the market rates.

Multinational companies, international agencies, statutory corporations, Government companies, public sector companies can certainly afford to pay rent at the market rates. This thought is further highlighted by the last category in Section 3(1)(b). Private limited companies and public limited companies having paid up share capital of more than Rs.1,00,00,000 are excluded from the protection of the Rent Act. This # 18/28 # This Order is modified/corrected by Speaking to Minutes Order CRA-12-13.doc further supports the view which we have taken that each and every entities mentioned in Section 3(1)(b) can afford to pay rent at the market rates. We may note that to meet the challenge of discrimination under Article 14, it is not sufficient to state that there is an intelligible differentia but it is further essential requirement to show that the differentia has a rational nexus to the object sought to be achieved by the Statute in question. (See : State of Rajasthan v. Mukanchand and Ors. (1964) 6 SCR 903). As stated above, Section 3(1)(b) strikes a balance between the interest of the landlords and the tenants; it is neither pro-landlords nor anti-tenants. It is pro-public interest. Int his connection, one must keep in mind the fact that the said rent Act, 1999 involves a structural change vis- a-vis the Bombay Rent Act, 1947. As stated above, with the passage of time, the 1947 Act became vulnerable to challenge as violative of Article 14. As stated above, the legislature has strike to balance the twin objectives of Rent Act protection and rent restriction for those who cannot afford to pay rents at the market rates. To accept the interpretation advanced on behalf of the respondents for excluding government companies from the meaning of the words "PSUs" in Section 3(1)(b) would amount to disturbing the neat balance struck by the Legislature. OIC and UIC are government companies. They have paid up capital of more than Rs.100 crores. They can easily afford to pay rents at the market rates. The legislature in its wisdom has kept PSUs, including government companies, outside the Rent Act. We have to proceed on the basis that the State Legislature was aware of the meaning of the words PSUs as understood by the various Parliamentary Committees. If Government companies are to be excluded from Section 3(1)(b) then the test of intelligible differentia having rational nexus to the objects sought to be achieved by the said Rent Act would stand defeated. We cannot exclude such PSUs from Section 3(1)(b) as is sought to be contended on behalf of the respondents. PSUs including Government Companies are independent companies/corporations. They cannot be equated to the "Government" in Section 3(1)(a). We have to read Section 3(1)(b) in its entirely. We have to read the said section keeping in # 19/28 # This Order is modified/corrected by Speaking to Minutes Order CRA-12-13.doc mind the reasons for its enactment. Lastly, we are of the view that the High Court judgment is erroneous when it adds words to Section 3(1)(b), namely, "which is not a Government company". In other words, the High Court states that OIC/UIC and BPCL are public undertakings, however, they are Government companies incorporated under Section 617 of the 1956 Act and, therefore, stand excluded from Section 3(1)