Decided on June 17,1970

Haridas Girdhardas And Ors. Appellant
Varadaraja Pillai And Anr. Respondents


K.Veeraswami, J. - (1.) THE plaintiffs appeal from a decree dismissing their suit for a declaration that they were, as from 1st March, 1964, the owners of the building and superstructures constructed by the first defendant on the lands demised to him by them according to the terms of the lease deed, dated 17th November, 1938, and, if necessary, for directing the 1st defendant to execute and register a deed vesting the buildings and superstructures in. the plaintiffs as from 1st March, 1964. The plaintiffs also claimed rent for the premises as from that date at the rate of Rs. 12,000 per month. By the lease deed of 17th November, 1938, vacant land of an extent of 11 -3/4 grounds or (hereabouts, comprised in premises No. 2 and 3/18, Mount Road, Madras, was leased out to the 1st defendant for a period of 15 years and 3 months, from 1st March, 1930, at a rent of Rs. 560 per month, with an option of renewal of the lease for a further term of 10 years from 1st March, 1954, but at an enhanced rent of Rs. 630 per month. Under the terms of the lease, the lessee was to construct on the demised plot of land "a theatre with all proper offices and out buildings such as bazaars, restaurants, motor and dynamo sheds, etc.", and fences drains, sewers to be used for production and exhibition of films and for staging drama therein and to expend in building; such theatre a sum not less than Rs. 50,000. The lessee shall, however, be at liberty to put up other buildings in addition to them. The most important term relevant to the appeal is: At the expiration or sooner determination of the tenancy, the Lessors shall have the option of buying the buildings to be erected on the demised land, the basis of valuation being as follows : The buildings shall be valued at Rs. 50,000 irrespective, of the actual cost of construction and the Lessee shall allow a depreciation of 3 per cent, per annum, the period being calculated for the purposes of this valuation from 1st March, 1939. If within a week from such termination of tenancy the Lessors do not signify their willingness to purchase the building or erections at the aforesaid valuation from the Lessee, the Lessee shall within three months thereafter remove and carry away any buildings or erections on the demised plot of land and shall cause to be restored to its original or natural level State and condition the demised plot of land. There were three further leases granted by the appellants to the first respondent of pieces of lands between December, 1939 and November 1945, which have been treated as annexes to the main premises demised under the lease deed, dated 17th November, 1938. The first respondent constructed a theatre known as 'Globe Talkies' at a cost of about Rs. 3 lakhs on the site and the superstructures so built up are said to be worth now about Rs. 15 lakhs. After expiry of the renewal period of lease, the appellants, by their lawyer's letter, dated 27th February, 1964, purported to exercise their option of buying the buildings and enclosed with it a cheque for Rs. 50,000. The first respondent promptly denied the right claimed by the appellants and returned the cheque to them. This led to the suit, in which the appellants claimed that they having exercised the option of purchasing the buildings and superstructure with the tender of a sum of Rs. 50,000, they had become owners thereof from and after the expiry of February, 1964, and accordingly sought a declaration to that effect. By an amendment of the plaint they added a prayer, that, if a deed was necessary, the first respondent should be directed to execute and register it, testing the buildings and superstructure in them as from 1st March, 1964. Since he first respondent was continuing in possession even after that date, the appellants claimed that he should pay rent of Rs. 12,000 per month for the entire premises covered by the lease deed, as also the buildings and superstructures thereon, and prayed for a decree for the arrears of rent. The first respondent resisted the suit claim by relying on the protection and rights created in his favour as a tenant by the Madras City Tenants' Protection Act, 1922, as amended by Madras Act (XIX of 1955), which came into force on 10th September, 1955, and contended that the terms of the lease deed which affected his rights under the Act were not enforceable. In view of this defence, the appellants attacked the validity of the Amending Act of 1955 as violative of Articles 14, 19(1)(f) and 31(1) of the Constitution, and this question was introduced into the pleadings by another amendment of the plaint and with a further written statement. On the ground that the validity of the Act was challenged, the State Government was impleaded as the second defendant, which is now the second respondent in the appeal. Kunhamed Kutti, J., who tried the suit, accepted the defence in full, found that the appellants were not owners of the buildings and superstructures on the demised lands and were not entitled to the declaration and specific performance they had asked for, and that, therefore, they could not also get a decree for arrears of rent as claimed by them.
(2.) FROM what we have said so far, it would be clear that the appellants can succeed only if they can successfully assail the validity of the Amending Act of 1955, without which the defence of the first respondent will almost be futile. We have, therefore, to decide (1) the validity of the Act, and (2) if it is valid, whether the appellants, notwithstanding its provisions, can enforce the terms of the main lease deed, and whether, even so, they are entitled to the relief of the declaration and specific relief and decree for arrears of rent at the rate claimed. As to the validity of the Amending Act aforesaid, the appellants have failed to persuade us that it is invalid. The scope and effect of the provisions of the Madras City Tenant's Protection Act, 1921 (as amended by Madras Act XIX of 1955) have been time and again noticed by Courts, and need no reiteration. It will suffice to refer to Swami Motor Transports (P.) Ltd. v. Sankaraswamigal Mutt : AIR 1963 SC 864 and Vajrapani Naidu v. New Theatre Carnatic Talkies Ltd. : [1964] 6 SCR 1015 . In those cases the Supreme Court repelled the contention that the Act violated Articles 19(1)(f) and 31(1). But the appellants' argument makes a fresh approach to the question. It may be conceded that the Act of 1922 could not be questioned on Constitutional grounds such as Article 19 or Article 14. But the Statement of Objects gave a reason, that is, evictions at that time as a special situation for the relief afforded by the Act to pre -1922 tenancies. But when the Amending Act of 1955 changed the date to 12th September, 1955, it in effect made a new law with reference to that date, and so, it required to run the gamut of Articles 19 and 14. Why are the rights and liabilities of lessors and lessees in Madras City to be different from the All India position under Section 108 of the Transfer of Property Act, and why special treatment accorded to pre -September 1955 tenancies? The Concurrent List peculiar to this country was included to provide a Uniform Code on the topics enumerated therein. Suppose Parliament itself included a special rule as to Madras City in the Transfer of Property Act, it would require justification as a reasonable classification under Article 14. While Article 254 enables the State to make the special law repugnant to the Central Law with the President's assent, the Article 14 test could be the same as if Parliament itself modified the General Law as to the City of Madras. At the Bill stage of 1955 Amending Act, it was only proposed to take power to extend the Act to the mofussil. The original Act applied it to the City of Madras only to tenancies at the commencement of the Act, to wit, 21st February, 1922. The Amending Act as it finally emerged, changed the commencement of the Act to 12th September, 1955. The Statement of the Objects cave no reasons for the change as to the City, as the Bill did not contemplate any such change. Such a change of date meant to enact completely new law with respect to tenancies created between 2ist February, 1922 and 12th September, 1955, and was arbitrary and unreasonable. As to Article 19, the Central Law provided the norm as reasonable for All India. Extra restrictions on the property right vested in the lessor must be treated and justified as reasonable for Madras City landowners by some acceptable reason why Central Law will not be for Madras City either permanently or with reference to a special situation. So runs the argument.
(3.) IT may be granted that the Statement of Objects and Reasons of the Amending Act of 1955 gave no reasons for the change of date as to the City of Madras. This is because at the initial stage of the Bill the Amending Act was not intended to apply to Madras City. But we find from the affidavit sworn to by the Additional Secretary to the Government, dated 27th January, 1970, that the idea of extending the protection of the Amending Act to City as well was suggested by some of the members of the Legislative Assembly when the Bill was introduced and during its discussion. The affidavit says: It was represented by those members that the tenants in the City who entered into the tenancy after 1922 are also suffering a lot and that they should be given security of tenure. It was also represented by some members that certain new areas like Kodambakkam, Guindy and Ayyanavaram were also included in the City only in 1946, and originally for these areas, the Act did not apply and now they have become part of the city. The same conditions were prevailing there and the Act should be extended to these areas also. The matter was then referred to the Select Committee which, on the basis of representations made to it and investigations, made a number of recommendations, one of them being that legislation should also cover the case of tenancies effected after 1922 and upto date in the case of City of Madras. It is therefore, pointed out for the second respondent that the Legislature, knowing the conditions, decided to give protection to post -1922 tenancies in the City of Madras. As held in Chastleton Corporation v. Sinclair 68 Lawyers Edn. 841, a law depending upon the existence of a certain state of facts to uphold it may cease to operate if the facts change, even though valid when passed. But in the circumstances we have just mentioned, we are of the view that the principle of Chastleton Corporation v. Sinclair 68 Lawyers Edn. 841, does not affect the validity of the Amending Act of 1955 as to the application of the main Act to post -1922 tenancies. The Legislature is shown to have been aware of the conditions of the tenancies subsequent to 1922, especially in areas committed to the City limits after 1922, and that knowing those conditions the Legislature extended the protection to post -1922 tenancies in the city. There is nothing to show before us that the facts and conditions which prompted the 1922 Act to be confined to pre -1922 tenancies in the City, did not also exist in respect of post -1922 tenancies in the City, the limits of which have subsequently been enlarged. When a law is made by the Legislature, as the Amending Act of 1955, and on its face the facts and conditions do not appear which prompted extension of the protection to post -1922 tenancies, the Courts cannot assume the absence of such facts and conditions. It is for the party asserting invalidity to show that such facts and conditions did not exist to warrant the change of date as to the City. Far from there being any material in support of the assertion of the appellants, the affidavit sworn to by the Additional Secretary to Government does set out the justification for such change of date.;

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