Wednesday, 22 August 2018

Whether it is necessary to issue notice to tenant prior to grant of exemption to trust property from provisions of rent law?

It is a settled position of law that no category of tenants can claim to possess any vested right to be protected by the rent laws. In Mohinder Kumar v. State of Haryana, MANU/SC/0037/1985 : [1986]1SCR74 the Supreme Court observed:

"The argument that the tenants have acquired a vested right under the Act prior to the amendment is without substance. The right claimed is right to be governed by the Act prior to its amendment. If the legislature had thought it fit to repeal the entire Act, could the tenant have claimed any such right. Obviously, they could not have I the question of acquiring any vested rights really does not arise".
7. To the same effect are the observations of Fazal Ali, J., in Kewal Singh v. Lajwanti, MANU/SC/0491/1979 : [1980]1SCR854 :

"...Thus any right that the tenant possessed after the expiry of the lease was conferred on him only by virtue of the Rent Control Act. It is, therefore, manifest that if the legislature considered in its wisdom to confer certain rights or facilities on the tenants, it could due to changed circumstances curtail, modify, alter or even take away such rights or the procedure enacted for the purpose of eviction and leave the tenants to seek their remedy under the common law."
8. In the present case the Notification dated 10th August 1982 was issued under the provisions of Section 4(2)(ii) and (iii) of the Act thereby exempting the trust properties from the operation of the provisions of the Act. There was no question of taking away any vested right as the Act could not be regarded as having created any vested right in the tenants to remain in occupation of the property. The Rent Act constitutes a kind of remedial legislation which gives additional protection to the tenants but could not be regarded as creating any vested right in them. 

11. In view of the forgoing discussion we hold that no notice is required to be given to the tenant before granting an exemption under the provisions of Section 4 of the Act as it does not contemplate grant of prior hearing to the tenants of the trust property.
IN THE HIGH COURT OF BOMBAY

Writ Petition No. 3545 of 1992

Decided On: 01.07.2004

Vijaya Irappa Kattimni Vs.  State of Maharashtra and Ors.

Hon'ble Judges/Coram:
A.P. Shah, Acg. C.J. and S.U. Kamdar, J.

Citation: 2005(1) MHLJ 194


1. In this petition the Petitioner, who is a tenant of shop premises in a shopping complex belonging to the Respondent No. 2 public trust, has challenged the legality and validity of the exemption granted to the properties of the Respondent No. 2 from all the provisions of the bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short the "Act") in exercise of powers conferred upon the State Government under Section 4(2)(ii) and (iii) of the Act.

2. Section 4 of the Act runs thus:

"4.Exemptions - (1)..

(2) The State Government may direct that all or any of the provisions of the Act (shall not subject to such conditions and terms as it may specify, apply generally,)

(i) to premises used for a public purpose of a charitable nature or to any class of premises used for such purpose;

(ii) to premises held by a charitable trust for a religious or charitable purpose and (let or given on licence, at a nominal or concessional rent or licence fee or charge); or

(iii) to premises held by a public trust for a religious or charitable purpose and administered by a local authority".

The Respondent No. 2 is a public charitable trust registered under the Bombay Public Trust Act, 1960 and is administered by the Solapur Municipal Corporation. The Respondent NO. 2 has constructed a shopping complex in which present Petitioner was inducted as a tenant. By Notification No. BRA-2080/CR.729(8)XII dated 10th August 1982 the State Government in exercise of power under Section 4(2)(ii) and (iii) exempted all the properties owned by the Respondent No. 2 from the provisions of the Act subject to the condition that the properties are used for the purpose of the trust.

3. The relevant Notification which is being impugned herein runs thus:

"HOUSING AND SPECIAL ASSISTANCE DEPORTMENT
Mantralaya Bombay 400032 dated the 10th August 1982.
BOMBAY RENTS, HOTEL AND LODGING HOUSE RATES CONTROL, ACT, 1947
500

No. BRA-2000/CR.729(8) (XII)-in exercise of the powers conferred by Clause (ii) and (iii) of Sub-section (2) of Section 4 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom LVII of 1947), the Government of Maharashtra hereby directs that with effect from the date of publication of this notification in the official gazette, all the provisions of Part II of the said Act shall not apply generally to the properties specified in the schedule hereto belongs to Bhavaniram Dharamshala Trust, situated at A-4 Solapur, District Solapur, subject to the conditions that the said premises are used for the purpose of the said trust.

Schedule

The premises belonging to Bhavaniram Dharamshala Trust A-4 Solapur District Solapur 413002.

By order and in the name of the Governor of Maharashtra.

V.S. Mathkar
Deputy Secretary to Government"

4. The Petitioner has challenged the aforesaid Notification granting exemption to the properties belonging to the Respondent No. 2 trust from the provisions of the Act solely on the ground that no order withdrawing the protection of the Act could have been made by the State Government without complying with the rules of natural justice and without granting an opportunity of hearing to the affected party i.e. Petitioner. Reliance is placed on the decision of this court in Keraba v. Shri Sheshashahi Trust reported in 1990 M L J 1183. On the other hand the State Government and the 2nd Respondent trust have contended that while granting exemption under Section 4 of the Act, it is not necessary to give hearing to the tenant as no vested right is affected by the exemption certificate. It is also pointed out that Section 4 of the Act is a piece of conditional legislation and no hearing is contemplated in exercise of power conferred under a conditional legislation.

5. At the outset we may mention that the validity of Section 4 is not questioned by the Petitioner. In S. Kandaswamy Chettiar v. State of Tamil Nadu, MANU/SC/0353/1984 : [1985]2SCR398 , a similar provision contained in Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 was held to be intravires. It was held that in the matter of beneficial legislations also there are bound to be cases in which an inflexible application of the provisions of the enactment may result in unnecessary and undue hardship not contemplated by the legislature. Obviously the power to grant exemptions under Section 29 of the Act has been conferred not for making any discrimination between tenants and tenants but to avoid undue hardship or abuse of the beneficial provisions that may result from uniform application of such provisions to cases which deserve different treatment.

6. It is a settled position of law that no category of tenants can claim to possess any vested right to be protected by the rent laws. In Mohinder Kumar v. State of Haryana, MANU/SC/0037/1985 : [1986]1SCR74 the Supreme Court observed:

"The argument that the tenants have acquired a vested right under the Act prior to the amendment is without substance. The right claimed is right to be governed by the Act prior to its amendment. If the legislature had thought it fit to repeal the entire Act, could the tenant have claimed any such right. Obviously, they could not have I the question of acquiring any vested rights really does not arise".
7. To the same effect are the observations of Fazal Ali, J., in Kewal Singh v. Lajwanti, MANU/SC/0491/1979 : [1980]1SCR854 :

"...Thus any right that the tenant possessed after the expiry of the lease was conferred on him only by virtue of the Rent Control Act. It is, therefore, manifest that if the legislature considered in its wisdom to confer certain rights or facilities on the tenants, it could due to changed circumstances curtail, modify, alter or even take away such rights or the procedure enacted for the purpose of eviction and leave the tenants to seek their remedy under the common law."
8. In the present case the Notification dated 10th August 1982 was issued under the provisions of Section 4(2)(ii) and (iii) of the Act thereby exempting the trust properties from the operation of the provisions of the Act. There was no question of taking away any vested right as the Act could not be regarded as having created any vested right in the tenants to remain in occupation of the property. The Rent Act constitutes a kind of remedial legislation which gives additional protection to the tenants but could not be regarded as creating any vested right in them. We may mention that similar view has been taken in Nambiar K.C. v. State of Madras reported in MANU/TN/0173/1953 : AIR1953Mad351 and Sadhu Singh S. Mula Singh v. District Board, Gurdaspur reported in AIR 1960 Pan 172.

9. The decision of the Division Bench in Keraba v. Sheshashahi Trust has no application to the present case. In that case the question was whether before granting exemption certificate to a public trust under Section 88(1)(b) of the Bombay Tenancy and Agricultural Lands Act, 1948, notice to tenant was necessary. The Division Bench held that grant of exemption certificate under Section 88(1)(b) of the said Act takes away a valuable right of a cultivator of the agricultural land to become purchaser on the tillers day and, therefore, the Collector while exercising powers under Section 88(1)(b) is bound to serve notice upon the person whose property rights are affected. Under the Bombay Tenancy Act consequence of grant of exemption certificate is that the tenant of the agricultural land, in respect of which exemption certificate is granted, loses his valuable right of becoming purchaser of the land on the tillers' day. Section 88(1)(b) prescribes that on grant of exemption certificate except sections which are set out by Sub-section (1) other provisions of the Bombay Tenancy Act will not be attracted with respect to such lands. Section 32 of the Act provides that on 1st April 1957 which is known as the tillers day, every tenant shall be deemed to have purchased from the landlord, land held by him as a tenant free from all encumbrances subsisting on the same day. Section 32 of the said Act then sets out mode of determining purchase price, and mode of payment by the tenant. The right conferred upon the cultivator under Section 32 of the Act stands excluded in respect of the land belonging to the trust on grant of exemption certificate. It is, therefore, obvious that consequence of grant of exemption certificate by the Collector and which is made conclusive evidence results into serious prejudice to the interest of the tenants. But situation under the Bombay Rent Act is entirely different. The Act merely confers additional protection to the tenants and it does not create any vested right in them.

10. Our attention was also drawn to the decision of the Supreme Court in the case of State of Tamil Nadu v. K. Sabanayangam AIR 1998 SC 344 in which the Court held that in exercise of powers of delegated legislation requirement of hearing parties likely to be affected need not be complied with when the delegate has to act on subjective satisfaction about the existence of condition precedent for exercise of power, however, where the objective satisfaction the delegate is required hearing of affected parties is essential. We do not think that this decision has any bearing on the issue involved in this petition.

11. In view of the forgoing discussion we hold that no notice is required to be given to the tenant before granting an exemption under the provisions of Section 4 of the Act as it does not contemplate grant of prior hearing to the tenants of the trust property.

12. Petition is accordingly dismissed. Rule is discharged. However, there shall be no order as to costs.

All the parties concerned to act on the ordinary copy of this order duly authenticated by the Private Secretary of this court.


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