Swami Motor Transport (P) Ltd. and another vs Sri Sankaraswamigal Mutt and another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeals Nos. 228 and 229 of 1962

Decision Date: 26 September 1962

Coram: Bhuvneshwar P. Sinha, Syed Jaffer Imam, K.N. Wanchoo, J.C. Shah, N. Rajagopala Ayyangar, Subba Rao

In the matter titled Swami Motor Transport (P) Ltd. and another versus Sri Sankaraswamigal Mutt and another, the Supreme Court of India delivered its judgment on 26 September 1962. The bench that heard the case comprised Justice Bhuvneshwar P. Sinha, Justice Syed Jaffer Imam, Justice K. N. Wanchoo, Justice J. C. Shah, and Justice N. Rajagopala Ayyangar. The parties were identified respectively as the petitioner, Swami Motor Transport (P) Ltd. and another, and the respondent, Sri Sankaraswamigal Mutt and another, together with connected appeals. The judgment was pronounced on 26 September 1962, and the case was reported in the 1963 volume of the All India Reporter at page 864 and also in the Supreme Court Reports (Supplement) (1) at page 282. Subsequent citator references include RF 1970 SC 564 (paragraphs 43 and 44), MV 1975 SC 1146 (paragraph 62), RF 1986 SC 63 (paragraph 25), and RF 1987 SC 1272 (paragraph 10). The legal questions arose under the Landlord and Tenant Act concerning tenant‑occupied buildings on leased land, the right of purchase, the definition of property, and the effect of the withdrawal of protection for non‑residential buildings in certain towns. The Court also had to consider whether such withdrawal amounted to discriminatory treatment or an impermissible restriction on the right of property, and to interpret the meaning of “property” within the statutory framework.

The factual background recorded that each appellant, as a tenant of land in Tanjore, had erected non‑residential premises on the leased sites and subsequently applied to the Munsif under section 9 of the Madras City Tenants Protection Act, 1921 (Act 111 of 1922), as amended by Act XIX of 1955 and Act XIII of 1960, seeking conveyance of the sites after the sale price was fixed in accordance with the Act. While the applications were pending, the protection and rights afforded to tenants who had constructed buildings on leased land were withdrawn by Act XIII of 1960 for non‑residential buildings in Tanjore, although the same protection continued for both residential and non‑residential buildings in the cities of Madras, Salem, Madurai, Coimbatore, and Tiruchirappalli. The appellants filed a petition under article 226 of the Constitution in the Madras High Court, requesting a writ of mandamus directing the Munsif to determine their applications under section 9 of the Principal Act, as extended to Tanjore by a notification and the 1955 amendment, arguing that the 1960 Act contravened articles 14, 19, and 31 of the Constitution. The High Court, relying on its earlier decision, upheld the validity of the 1960 Act. The Supreme Court held that limiting protection to residential buildings only in Tanjore, while granting protection to both residential and non‑residential buildings in the other five towns, was justified by real differences between Tanjore and the other towns, such as the pressure on non‑residential accommodation and population factors. The Court found that the differentiation was closely related to the objective of protecting tenants of residential buildings primarily, and of non‑residential buildings where the need was most acute. The Court referred to precedents including Shri Ram Krishna Dalmia v. Justice S. R. Tendolkar [1959] S.C.R. 279, Bhudan Choudhury v. State of Bihar [1955] 1 S.C.R. 1045, and State of West Bengal, among others, to support its analysis of the constitutional guarantees relating to property and the permissible scope of legislative classification.

In this case the Court referred to several earlier judgments. It noted that the decision in v. Anuwar Ali, reported in 1952 S.C.R. 284, held that Article 19(1)(f) of the Constitution guarantees both abstract and concrete rights of property and that the term “property” carries the same meaning in Article 19(1)(f) and in Article 31(1). The Court also mentioned State of West Bengal v. Subodh Gopal Bose, 1954 S.C.R. 587; The Commissioner Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Nutt, 1954 S.C.R. 1005; and Chiranjit Lal Choudhury v. Union of India, 1950 S.C.R. 869, observing that a law under Article 31 must be a valid law and, to be valid, it must satisfy the requirements of other fundamental rights, including Article 19(1)(f). The Court further cited Kavalappara Kottarathil Kochuni v. State of Madras, 1960 3 S.C.R. 887, and held that the right to purchase property conferred by a statute is essentially the same as the right of purchase created by a contract, and in neither situation does it amount to a full right of property. In addition, the Court referred to Maharana Shri Jayvantsinghji Ranmalsinghji etc. v. State of Gujarat, 1662 Supp. 2 S.C.R. 411, and concluded that the principal Act did not give the tenant any right to the super‑structure and therefore the impugned Act could not have taken away any such right.

The matter before the Court was a civil appellate jurisdiction involving Civil Appeals Nos. 228 and 229 of 1962, which arose from the judgment and order dated 26 June 1961 of the Madras High Court in W.P. Nos. 829 and 833 of 1960. Counsel for the appellants were A. V. Viswanatha Sastri, G. Ramaswami, J. B. Dadachanji, O. C. Mathur and Ravinder Narain; the respondent’s counsel was S. Kothandarama Nayanar together with M. S. K. Aiyanyar; Intervener 1 was represented by A. Ranganadham Chetty and A. V. Rangam, and Intervener 2 by R. Thiagarajan. The judgment was delivered on 26 September 1962 by Justice Subba Rao.

The Court observed that the two appeals, being on certificate, raised identical points and originated from a common order of the Madras High Court in Writ Petitions Nos. 829 and 830 of 1960, and therefore it was appropriate to dispose of them together. The factual background of Civil Appeal No. 228 of 1962 was summarised as follows: the first appellant was a limited company engaged in the transport business, and the second appellant was its managing director. The first appellant had taken over the business of Swami Motor Service Company, of which the second appellant had been the Managing Partner. In his capacity as Managing Partner, the second appellant had entered into a lease of a vacant site identified as Survey No. 2770, which belonged to the first respondent. After the takeover, the first appellant acquired the leasehold interest in that site, and the first respondent, Sri Sankaraswamigal Mutt, acknowledged the first appellant as its tenant and continued to receive rent from it. It was alleged that the appellants had erected several valuable structures on the leased site, and the first respondent, through its trustee, had subsequently commenced legal proceedings seeking eviction of the appellant company.

The plaintiff, Sri Sankaraswamigal Mutt, instituted suit O.S. No. 103 of 1953 before the District Munsif Court at Tanjore, seeking to evict the appellant company from the disputed site. On 30 July 1954 the court recorded a compromise decree for eviction, granting the appellant‑company a period of six months within which to vacate the premises. The decree‑holder subsequently filed an execution petition in the same court against the first appellant to enforce the decree. While the execution petition was pending, the State enacted Madras Act XIX of 1955, which empowered the State Government to extend the Madras City Tenants’ Protection Act, 1921 (the “Principal Act”) to any municipal town by means of a notification in the Fort St. George Gazette. Exercising this authority, the Government issued an order bringing the Town of Tanjore within the scope of the Principal Act.

Pursuant to the provisions of the Principal Act, the appellants filed Original Petition No. 39 of 1956 in the District Munsif Court, requesting an order directing that a conveyance of the said site be executed in favour of the company upon payment of a price to be fixed by the court. The proceedings thereafter proceeded in a tortuous manner, the appellants alleging that the respondents employed obstructive tactics in anticipation of forthcoming legislation that would withdraw the protections afforded to tenants of non‑residential buildings in Tanjore. As expected, the State Legislature subsequently passed Act XIII of 1960, amending the Principal Act so as to remove the protection previously granted to tenants of non‑residential buildings in the municipal town of Tanjore and certain other towns. Under the amended, impugned Act, any proceedings instituted under the Principal Act relating to non‑residential buildings situated in towns other than those expressly retained would consequently abate.

In view of the amendment, the appellants approached the Madras High Court under Article 226 of the Constitution, seeking a writ of mandamus that would compel the District Munsif to dispose of their petition in accordance with section 9 of the Principal Act as it existed prior to its amendment by Act XIII of 1960. In the related Civil Appeal No. 229 of 1962, the matter concerned a site described as Survey No. 74, Railway Road, Tanjore, which belonged to the first respondent. The appellant’s father had executed a lease deed in favour of the first respondent covering portions of the said site; the lease contained a clause granting the tenant an option to renew the lease for an additional ten‑year period. It was alleged that the appellant’s father had erected substantial structures at considerable expense on the site even before the lease, as he was already in possession of the land under the predecessor of the first respondent. After the initial ten‑year term expired, the appellant’s father exercised the renewal option and continued to occupy the property as a tenant. Subsequently, the first respondent instituted further proceedings, the details of which continue in the next portion of the judgment.

A suit identified as Original Suit No. 315 of 1950 was instituted in the Court of the District Munsif at Tanjore with the purpose of evicting the appellant from the disputed property. That suit resulted in the issuance of a compromise decree dated 10 January 1952. The terms of the compromise decree provided that the tenancy would be continued for a period of twelve years commencing on 1 January 1952. The decree further stipulated that, upon the expiration of that twelve‑year period, the first respondent would be entitled to enforce the decree and to take possession of the site, subject to the removal of any superstructures that the appellant had erected on the land.

Subsequently, and as noted earlier, the provisions of the Principal Act were extended to cover the town of Tanjore. In response to that extension, the father of the appellant filed Original Petition No. 43 of 1956 in the same Court of the District Munsif, seeking an order that would require the first respondent to convey the site to him in exchange for a price to be determined by the court. As occurred in the earlier suit, the proceedings in this petition were prolonged and continued to linger until the enactment of the 1955 Act.

Thereafter, the appellant approached the High Court of Judicature at Madras by filing a petition under Article 226 of the Constitution. The relief sought in that petition was a writ of mandamus directing the District Munsif of Tanjore to dispose of the appellant’s application in conformity with the provisions of the Principal Act as they stood before the amendment made by Act XIII of 1960. In both of the petitions that were filed, the appellants contested the constitutional validity of Act XIII of 1960.

The High Court, by a common order, rejected the challengers’ contentions and upheld the constitutional validity of the 1960 Act. That decision was based on precedent established by a division bench of the same Court in the case of Suaminathan v. Sundara. The two appeals that are presently before this Court were instituted on certificates issued by the High Court.

Counsel for the appellants, identified as a learned advocate, presented two principal grounds of challenge. First, it was argued that the 1960 Act infringed the appellants’ fundamental right under Article 14 of the Constitution for two reasons. The first reason asserted that, although the stated purpose of the Act was to protect tenants of residential buildings from eviction, the Act introduced a classification among non‑residential buildings situated in different municipal areas, granting relief to tenants in certain towns while denying the same relief to tenants of comparable buildings in other towns within the State. The counsel contended that such a classification bore no relevance to the object the Act sought to achieve. The second reason advanced that the Act distinguished between non‑residential buildings located in the cities of Madras, Salem, Madurai, Coimbatore and Tiruchirappalli on one side, and those situated in other towns, including Tanjore, on the other side. The Act provided protection to tenants in the former group while withholding it from tenants in the latter group, despite the lack of any reasonable relation between the two sets of localities and the objective of safeguarding tenants who had constructed substantial structures from eviction.

Second, counsel argued that the 1960 Act also contravened Articles 19(1)(f) and 31(1) of the Constitution because it did not constitute a reasonable restriction in the public interest on the proprietary rights that the appellants had acquired under the earlier Act of 1955.

In this case, the Court noted that the restriction imposed by the 1960 Act was not a reasonable limitation on the proprietary rights that the appellants had acquired under the earlier Act XIX of 1955. The counsel for the first respondents in both appeals argued that sections three and nine of the Principal Act could not be relied upon by the appellants because the lease deeds they had executed contained an explicit covenant requiring them to vacate the land within a specified period, and the buildings had been erected after those lease deeds were signed. The respondent counsel further maintained that the 1960 Act was constitutionally valid, asserting that it did not offend either article fourteen or article nineteen of the Constitution.

The counsel representing the State of Madras, to which notice had been given, expanded on the second contention raised by the respondents’ counsel. He presented statistical data, which he said provided a reasonable basis for the classification made by the 1960 Act. Regarding the argument based on article nineteen, he contended that the rights created by Act XIX of 1955—namely, the right to compensation on eviction under section three and the right to obtain a sale deed under section nine—were merely analogous to a right to sue or a right to purchase property and therefore could not be equated with property rights in the constitutional sense.

Before addressing the submissions, the Court found it useful to outline the scope of the relevant provisions of the Principal Act, as amended by Act XIX of 1955, and of Act XIII of 1960. The Principal Act, as amended, was enacted, according to its preamble, to protect certain classes of tenants who, in municipal towns and adjoining areas of the State of Madras, had constructed buildings on land belonging to others with the expectation that they would not be evicted provided they paid a fair rent for the land. The essential features of the amended provisions may be summarized as follows: the Act applied to any building, whether residential or non‑residential; every tenant facing ejectment was entitled to compensation for the value of any building he had erected and for any trees he had planted; in an ejectment suit, the court was required to determine the amount of compensation payable by the landlord to the tenant and to decree that the landlord could take possession of the land only after payment of that amount within the time prescribed by law; if the landlord was unable or unwilling to make the payment within the stipulated period, the landlord could apply for the fixation of a reasonable rent for the tenant’s occupation of the land; a tenant who was entitled to compensation and against whom an ejectment suit had been instituted could apply for an order directing the landlord to sell the land to the tenant at a price fixed by the court, with the court fixing the price in accordance with section nine and directing the tenant to pay that amount to the landlord within a specified time, failing which the application would be dismissed.

The Court further observed that nothing in the Act altered any written stipulations made by the tenant, duly registered, concerning the erection of buildings that were constructed after the date of the contract. The provisions applied to ejectment suits that were pending and in which decrees for ejectment had been passed but not executed before the Act came into force, as indicated by sections two(1), two(1‑A), three, four, six, nine and twelve of the Act. Consequently, the Court concluded that under the Principal Act, tenants in Madras City acquired valuable rights that had not existed prior to the enactment of the Act.

According to the provisions, a tenant may apply for an order directing the landlord to sell the land to the tenant at a price that the court will determine. Once the court fixes the price in accordance with section 9, it shall order the tenant to pay that amount to the landlord within a specified period, and if the tenant fails to make the payment, the application will be dismissed. The Act does not disturb any written stipulations that a tenant has registered concerning the erection of buildings, insofar as those stipulations relate to buildings constructed after the date of the contract. The Act is applicable to ejectment suits that are already pending where a decree for ejectment has been passed but not yet executed at the time the Act came into force, as referred to in sections 2(1), 2(1‑A), 3, 4, 6, 9 and 12.

The Court observed that the Principal Act introduced significant rights for tenants in Madras City that did not exist before the Act. Earlier, a tenant who had built residential or non‑residential structures on land could only be removed according to the law and was entitled merely to dismantle the superstructure before handing over vacant possession. After the enactment of the Principal Act, a similarly situated tenant gained the option either to claim compensation for the superstructure or to seek a court order for the sale of the land to the tenant at a price fixed by the court. The Principal Act was later amended by Madras Act XIX of 1955, which empowered the State Government to extend the Act’s protection by Gazette notification to tenants of any other municipal town in the State of Madras and to any specified village within five miles of the City of Madras or such municipal towns, where tenants had constructed buildings on someone else’s land with the expectation of not being evicted provided they paid a fair rent. Exercising this power, the State Government issued a notification on 28 March 1956 extending the Principal Act to the municipal town of Tanjore. As a result, tenants such as the appellants, who occupied land on which they had erected non‑residential buildings, acquired the right to request compensation for those buildings in an ejectment proceeding or to apply to the court for an order directing the decree‑holder to sell the land to them after the court fixed the price as prescribed by the Act. The same extension was subsequently made to other towns, including Madurai, Coimbatore, Salem and Tiruchirappalli. Later, the Legislature altered its policy again by passing Act XIII of 1960, and by section 3 of that Act, amendments were introduced into section 2 of the Principal Act, specifically substituting a new clause for clause (1).

In the amendment introduced by Act XIII of 1960, the definition of “building” was altered. The statute substituted the earlier wording with a new clause that read: “(1) ‘Building’ means any building, hut or other structure, whether of masonry, bricks, wood, mud, metal or any other material whatsoever‑ used‑ (i) for residential or non‑residential purposes, in the City of Madras, in the municipal towns of Coimbatore, Madurai, Salem and Tiruchirappalli and in any village within five miles of the City of Madras or of the municipal towns aforesaid and (ii) for residential purposes only, in any other area, and includes the appurtenance thereto.” Section 9 of the same Act dealt with pending proceedings. It provided that every proceeding that was pending before any Court, except those relating to property situated in (i) the City of Madras, (ii) the municipal towns of Coimbatore, Madurai, Salem and Tiruchirappalli, or (iii) any village within five miles of the City of Madras or the municipal towns mentioned, on the date of publication of the Act in the Fort St George Gazette and that had been instituted under the provisions of the Principal Act, would, insofar as such proceeding concerned non‑residential buildings, abate. The section further declared that all rights and privileges which might have accrued immediately before that date to any person with respect to property situated outside the specified areas, by virtue of the Principal Act, would, to the extent that they related to non‑residential buildings, cease, determine and become unenforceable. The provision included a safeguard stating that nothing in the section would be deemed to invalidate any suit or proceeding in which the decree or order had been fully executed or satisfied before the date mentioned.

The practical effect of the 1960 amendment on non‑residential buildings located outside the City of Madras and the specifically named municipal towns was that every court case pending concerning those buildings was extinguished, and the rights that tenants had acquired under the 1955 Act were lost. The rights that were relevant to the present inquiry, acquired by tenants under the 1955 legislation, comprised four distinct entitlements: (i) on an eviction proceeding, the tenant was entitled to receive compensation equal to the value of the building erected by the tenant or by the tenant’s predecessor; (ii) before issuing a decree for eviction, the court was required to determine the amount due to the tenant and to make the eviction decree conditional upon payment of that amount; (iii) where a decree for eviction had been passed before the 1955 Act became operative, the tenant could apply for a determination of the compensation due in execution and for a fresh decree consistent with section 4 of the Principal Act; and (iv) the tenant retained, at his option, the right to apply within the prescribed time limit to the court for an order directing the landlord to sell the land to the tenant at a price fixed by the court, irrespective of whether an eviction decree had been passed. After the 1960 Act came into force, tenants of non‑residential buildings situated outside the City of Madras and the designated municipal towns were stripped of these rights.

In this case the Court observed that the rights previously granted to tenants of non‑residential buildings in certain municipal towns ceased to exist once the 1960 Act became operative. The principal issue before the Court was whether the 1960 Act, in so far as it removed those rights for tenants of non‑residential premises in Tanjore, violated Article 14 of the Constitution, or whether the removal could be justified under the doctrine of classification. The Court noted that the legal principles governing this question are well settled and do not require an extensive restatement. It was sufficient to refer to the propositions articulated by the Court in the earlier decision of Shri Ram Krishna Dalmia v. Justice S. R. Tendolkar. Those propositions are: first, there is a presumption in favour of the constitutionality of any legislative enactment and the burden of proving a clear transgression of constitutional principles lies on the party challenging the law; second, it must be presumed that the legislature understands and correctly appreciates the needs of the people it governs, that its statutes address problems that have become apparent through experience, and that any distinctions made by the law are based on adequate grounds; third, to sustain the presumption of constitutionality the court may consider matters of common knowledge, contemporary reports, the historical context, and may assume any factual scenario that could have existed at the time the legislation was enacted; and fourth, while the court presumes good faith and knowledge of existing conditions on the part of the legislature, if nothing in the text of the law or in the surrounding circumstances is brought to the court’s notice that would rationally justify the classification, the presumption of constitutionality cannot be stretched to assume undisclosed or unknown reasons for subjecting particular individuals or corporations to hostile or discriminatory legislation. The Court emphasized that all these propositions are subordinate to the central principle of classification, namely that any classification must be based on an intelligible distinction and that the distinction must have a rational relation to the purpose sought to be achieved by the statute. The Court further explained that classifications may be founded on various bases such as geography, the object of the law, occupation, or similar criteria, referring to authorities such as Budhan Chaudhry v. State of Bihar and State of West Bengal v. Anwar Ali Sarkar. Keeping these settled principles in mind, the Court proceeded to apply them to the facts of the present case. The first contention raised by the parties was that the purpose of the Act was to protect tenants from eviction of residential quarters, yet the Act also extended protection to tenants of non‑residential buildings located in the City of Madras, the municipal towns of Coimbatore, Madurai, Salem and Tiruchirappalli, and in any village situated within five miles of the aforementioned City and municipal towns. The Court noted that this argument appeared plausible at first glance, but a closer examination of the statutory object would be necessary.

The Court examined the contention that the Act was intended solely to protect tenants of residential buildings and therefore could not rationally extend protection to tenants of non‑residential buildings situated in the mentioned City and municipal towns. The argument asserted that the object of the legislation was to safeguard residential tenants, while the statute nevertheless granted protection to tenants of non‑residential structures in those localities, and that such classification lacked a rational connection to the legislative purpose. While this line of reasoning initially seemed plausible, the Court observed that a more careful analysis revealed that the Act’s purpose was not confined exclusively to residential tenancies. The Court referred to the statement of objects and reasons appended to Act XIII of 1960, which quoted the original purpose of the Madras City Tenants’ Protection Act, 1921, as follows: “The Madras City Tenants’ Protection Act, 1921, was enacted with the main object of safeguarding the tenants from eviction from residential quarters. In consistence with this object it is proposed to restrict the application of the Madras City Tenants’ Protection Act, 1921 (Madras Act III of 1922) to residential buildings only.” The Court noted that, although the principal aim of the legislation was indeed to protect tenants of residential premises from eviction, the statutory language did not make this aim exclusive. The objects and reasons of the 1960 Act merely echoed those of the Principal Act, whose full rationale was published in the Fort St. George Gazette of 26 July 1921 (page 1491). The Gazette excerpt explained that, in many parts of the City of Madras, tenants had erected dwelling houses and other structures on land belonging to others, expecting to remain in possession upon payment of a fair ground rent, even though no specific lease term had been fixed. Recent attempts to evict large numbers of such occupants demonstrated that these expectations were at risk of being defeated. Consequently, the Bill provided for compensation to tenants in the event of ejectment for the value of any buildings they or their predecessors‑in‑interest had constructed, and it also authorized the settlement of fair rent at the landlord’s request. From this exposition, the Court concluded that the legislative intent encompassed protection not only for dwelling houses but also for other buildings within the City of Madras. The Court further pointed out that the provisions of the Principal Act, and subsequently those of the 1955 Act, applied to both residential and non‑residential structures, a point that was not contested. Hence, when the authors of Act XIII of 1960 described the main object of the legislation as safeguarding tenants from eviction from residential quarters, they were merely emphasizing the principal purpose without excluding the Act’s operation with respect to non‑residential buildings. Accordingly, the Court rejected the view that the Act’s object was limited solely to residential tenants and found no fault with the classification of non‑residential tenants within the specified City and municipal towns.

It was held that the statement asserting that the purpose of the Act was limited solely to the protection of tenants of residential buildings was incorrect. The Court found no merit in that contention. The more substantial issue raised was whether any rational basis existed for distinguishing between tenants occupying non‑residential premises in the City of Madras and those in the municipal towns of Madurai, Coimbatore, Salem and Tiruchirappalli on the one hand, and tenants of similar premises in other towns such as Tanjore on the other hand. The argument advanced was that if the legislature deemed protection necessary for tenants of non‑residential premises in the named city and towns, the same protection ought also to be extended to tenants of comparable premises in Tanjore and in other towns. In other words, the contention was that there were no intelligible differences between the non‑residential buildings situated in Madras and the four municipal towns and the buildings located in other towns. The learned judges of the High Court in Swaminathan v. Sundara, a decision that was followed in the present matter, addressed this argument on page 987 of the report, observing that “it is apparent that having regard to the large population in the first five areas and the large‑scale commercial activities in these areas, the Legislature thought fit that non‑residential quarters occupied by tenants on lands belonging to others should also be offered relief from being evicted summarily and arbitrarily.” Counsel for the appellants criticised that passage and asked how the size of the population of the various towns bore upon the question of eviction of tenants from non‑residential premises. The Court responded that population per se is not a relevant circumstance, although density may be, because the pressure on existing buildings or on sites suitable for construction does not depend solely on the number of inhabitants without reference to the amount of land available for building. Accordingly, the argument continued. Mr. A. Ranganathan Chetty, appearing for the State of Madras, attempted to introduce statistics to show that the towns preferred under the Act were highly populated industrial and commercial centres of the State when compared with towns such as Tanjore, and that consequently there would be heightened pressure on non‑residential premises in those localities leading to a wave of evictions. Before examining those statistics, the Court found it convenient to note the allegations contained in the affidavits. On behalf of the State of Madras, the Secretary to the Government, J. Sivanandam, filed an affidavit in which paragraph eight stated, “On facts the position is that these four towns of Madurai, Tiruchirappalli, Salem and Coimbatore ranked the first four next to the City of Madras in population, income and commercial activities and a very large number of tenants had been enjoying the protection afforded by the then existing provision of this Act, in respect of residential and non‑residential buildings as well. It was therefore thought that it would not be proper to deprive these tenants of the protection in respect of non‑residential…”.

The judgment observed that the affidavit did not specifically refer to the industrial potential of the towns that were preferred under the Act. Nonetheless, the Court held that the phrase “commercial activities” was employed in a broad manner that encompassed industrial activities as well. The affidavit attempted to substantiate this interpretation by relying on the actions of the relevant authorities and on the correspondence exchanged between the State Government and the Union Government. An extract from the proceedings of the Select Committee was quoted to illuminate the matter. The extract recorded that, based on reports received from district collectors, the Act had been extended to certain municipalities, but that such an extension had caused inconvenience to public bodies and other institutions that owned land because they could not obtain adequate returns to continue their activities under the existing conditions. The Committee further noted that, in the case of Madras City, restricting the Act would impose considerable hardship on a large number of small business establishments, and that the long‑standing privilege and concession enjoyed by those establishments should not be disturbed. The Government acknowledged the reasonableness of the demand that non‑residential buildings in Madras City should remain within the protection of the Act, yet it expressed the view that, where the provisions were being extended to other areas, the protection should be limited to residential buildings only.

Subsequently, the Committee recorded that, owing to the wishes of certain honorable members, there should be no distinction between residential and non‑residential buildings not only in Madras City but also in other municipalities. Accordingly, the Chairman proposed to include the four municipalities of Madurai, Tiruchirappalli, Salem and Coimbatore in sub‑clause (1) of the proposed clause (1). The Court noted that these passages revealed both the legislative objectives and the political pressures that shaped the amendments. However, the Court limited its analysis to the statutory objects, not the political considerations. It explained that the special treatment accorded to Madras City and the other specified towns was based on the presence of a considerable number of small business establishments in those locations, implying that such establishments were fewer in other towns. Correspondence between the Government of India and the Government of Madras confirmed this view, stating that most tenancies of non‑residential buildings that had obtained protection from eviction were situated in Madras City and in the municipal towns of Madurai, Coimbatore, Salem and Tiruchirappalli, which had been classified as Special Grade or Selection Grade municipalities on the basis of income and population. The correspondence further argued that the concession was necessary because denial of protection to the large number of tenants in those four municipalities would cause great hardship, especially since the tenants had invested substantial sums of money in the expectation that they would not be evicted as long as they continued to pay rent.

The Court observed that the phrase “the rent due” underscored the special importance of the preferred towns and indicated that a comparatively large number of non‑residential buildings were located in the City of Madras and the mentioned municipalities. The Government Order numbered 331, L. A., dated 18 February 1953 and issued by the Government of Madras, was cited as further evidence of the comparative significance of those towns. That order stated: “They (Government) consider, however, that in view of the size and importance of the three municipalities (Tiruchirappalli, Coimbatore and Vijayawada) referred to above and also of those of the Salem Municipality, the four municipalities stand distinctly apart from the other first grade municipalities, excluding of course Madurai Municipality which stands in a class by itself. The Government accordingly direct that with effect from 1‑4‑1953 the municipalities of Coimbatore, Salem and Tiruchirappalli and Vijayawada be classified as selection grade municipalities.” The Court noted that the reply affidavit contested many of the factual assertions made in the counter‑affidavit, denying that towns such as Tanjore, Vellore and Connors had a large number of tenants of non‑residential buildings enjoying the Act’s protection, and asserting that the preferred towns other than Madras had not long enjoyed such protection because the amending Act was only passed in 1955. It was further pointed out that overall town population was irrelevant, whereas population density mattered, and that the density in Tanjore, Coimbatore, Madurai and Salem was the same.

The Court then identified the material facts that emerged from the competing allegations. First, Madras was recognized as a city of large population and commercial importance. Second, Madurai was classified as a special‑grade municipality, while Coimbatore, Salem and Tiruchirappalli were classified as selection‑grade municipalities on the basis of their size and importance, indicating larger populations and greater commercial potential. Third, these towns contained a large number of non‑residential buildings. Fourth, apart from vague statements in the reply affidavit, there was no record establishing that the number of non‑residential buildings in Tanjore compared favourably with those in the preferred towns. The Court found that statistical data from authorized government publications supported these facts. For example, the “Madras District Gazetteers, Madurai” on page 172 recorded: “Madurai is one of the very few districts in this State in which a comparatively large portion of the population, about 37 per cent., lives by industries, trade and other avocations. This is no wonder, seeing that it has never had, in spite of irrigation works, any facilities like Tanjore for absorbing the great bulk of its population in agriculture. In fact it stands next to the Coimbatore district in possessing a considerable proportion of the non‑agricultural population.” Although the statement referred to districts as a whole, the Court noted that it was well known that most industries were concentrated in the municipal towns of Madurai and Coimbatore.

In the statistical compilation titled “India, 1962,” the population of several towns in the Madras State was enumerated as follows: Madurai had a population of 424,975; Coimbatore recorded 285,263; Tiruchirappalli showed 249,933; Salem also had 249,084; Tuticorin listed 124,273; Vellore reported 113,580; Tanjore accounted for 110,968; and Nagercoil had 106,497 inhabitants. The Court observed that further inquiry into these figures was unnecessary. While acknowledging that sheer population size cannot, by itself, determine the classification contemplated under the Act, the Court noted that towns with larger concentrations of people are typically those that host significant commercial and industrial activity. The Court recognized that, on rare occasions, a smaller town with a modest population might also possess heavy industry or vibrant commerce, but such instances are exceptions rather than the rule. In the present matter, the Gazetteer corroborated the State’s affidavit that the municipal towns chosen for preferential treatment are commercially more advanced than other towns within the State. Although the Government, at earlier stages of the litigation or even before the enactment of the 1960 Act, had not emphasized these commercial and industrial distinctions as prominently as its counsel now does, the Court declined to dismiss the argument as an afterthought. Moreover, the Government of Madras was not a party before the High Court and therefore had no opportunity to present its case there. Relying on the allegations set out in the State’s affidavit and the supporting statistical data, the Court concluded that genuine differences exist between the non‑residential building stock in the towns of Madurai, Coimbatore, Salem and Tiruchirappalli and that found in other towns of Madras State, and that these differences bear a reasonable relationship to the purpose sought to be achieved by the Act.

The Court then turned to the more intricate constitutional question concerning the effect of Articles 19(1)(f) and 31(1) of the Constitution on the provisions of the impugned Act. Article 19(1)(f) provides that all citizens have the right to acquire, hold and dispose of property, while Article 31(1) declares that no person shall be deprived of his property except by authority of law. To invoke protection under either article, it must first be shown that the tenants of residential buildings in Tanjore had acquired a property right; without such a right, the 1960 Act could not have deprived them of it or imposed any restriction upon them. Consequently, the pivotal issue became whether the rights created by the 1955 Act—by extending sections 3 and 9 of the Principal Act to those tenants—conferred upon them a recognizable right to property. Counsel for the State of Madras summarized its position by stating that Article 19(1)(f) concerns abstract rights of property, whereas Article 31(1) concerns concrete rights. The State further argued that under Article 31(1) there is no limitation on the power of the appropriate legislature to enact a law that deprives a person of his property, and that the only restriction on such legislative power is that the deprivation must be effected by a valid statutory provision.

The Court observed that a State may deprive a person of property only through a law that has been enacted by the legislature. Assuming that the 1955 Act had granted a definite, concrete right of property to the appellants, the Court noted that the subsequent 1960 Act would have lawfully taken away that right, and consequently no fundamental right of the appellants would have been violated. Conversely, the Court explained that if both Articles 19(1)(f) and 31(1) were interpreted as protecting concrete property rights, two inconsistencies would arise. First, Article 31(1) would become redundant, because its purpose is to safeguard concrete rights. Second, since deprivation of property could not be regarded as a restriction on the right merely to hold property, any statute that stripped a person of his property would automatically breach Article 19 and therefore be unconstitutional. To support this line of reasoning, the Court cited the observations of Patanjali Sastri, C. J., and Das, J., in The State of West Bengal v. Subodh Gopal Bose (1954) S.C.R. 587 at 597, where the Chief Justice had remarked that the framers of the Constitution distinguished between the natural right of a citizen “to acquire, hold and dispose of property” placed in Article 19(1), and the protection of concrete property rights owned by a person enshrined in Article 31. The Court then referred to a later judgment, The Commissioner, Hindu Religious Endowment’ Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1954) S.C.R. 1005, 1020, which examined those earlier observations. In that decision the Court clarified that the Chief Justice’s remarks represented only his personal view and were not the majority opinion of the bench, noting that two of the other judges did not concur and the remaining two expressed no opinion. The Advocate‑General for Madras and other counsel had not raised the issue, and the Attorney‑General himself declined to endorse the Chief Justice’s position, seeking instead a definitive pronouncement from the Court. Accordingly, the Court declined to issue a final ruling on the matter in the present case, preferring to continue following the established approach that Article 19(1)(f) applies equally to both concrete and abstract property rights, as has been consistently applied in earlier cases.

The Court noted that, although it had not yet issued a definitive ruling on the question, it had consistently proceeded on the premise that Article 19(1) of the Constitution covered both concrete and abstract property rights. It referred to the earlier decision in Chiranjit Lal Chowdhuri v. The Union of India, where Justice Mukherjea, then a Judge of this Court, held that the right to hold property under clause 19(1)(f) encompassed the right to possess and to enjoy all benefits ordinarily attached to ownership of property (1). The Court also cited the observations of Justice Jagannadhadas in The State of West Bengal v. Subodh Gopal Bose, where, at pages 668‑669, he explained that clause 19(1)(f) was probably intended to protect the natural rights of citizens but nevertheless embraced concrete property rights within its scope, a view that had been generally accepted without dispute in this Court and the High Courts for the preceding four years (2). The Court emphasized that the language of Article 19(1)(f) was broad and, on its face, embraced both abstract and concrete rights of property. It warned that to assert that only abstract rights could be protected while concrete rights could be infringed would strip the provision of its real meaning. Such a construction would allow the State to enact a law that generally prohibited a citizen from acquiring, holding, or disposing of property, yet simultaneously permit a law that seized property already acquired or held and barred its further disposal. This would imply that the Constitution’s framers had made only platitudes, granting the Legislature unrestricted power to interfere with citizens’ property rights. Extending that interpretation to the other clauses of Article 19(1) would lead to the absurd result that the Legislature could not generally prohibit citizens from expressing opinions, assembling peacefully, forming associations, or moving freely throughout the country, while it could still regulate those activities at the moment they were exercised. The Court held that such an intention could not be ascribed to the Constituent Assembly unless the text of the Article expressly indicated it. Consequently, the Court reaffirmed that the words of Article 19(1)(f) were comprehensive, covering both concrete and abstract rights. Although there was no final pronouncement on the issue, the Court, consistent with the practice of this Court and the High Courts since the Constitution’s commencement, concluded that Article 19 applied equally to concrete and abstract property rights. It rejected the argument that this interpretation would render Article 31(1) redundant, stating that it did not see how such a construction would make that provision unnecessary.

The Court observed that it could not understand how Article 31(1) would become a redundant provision. Article 31(1) is expressed in a negative formulation, stating that no person shall be deprived of his property except by authority of law. In essence, this clause creates a fundamental right protecting individuals against deprivation of property by executive action. Nevertheless, the Court emphasized that the provision does not, either expressly or by necessary implication, remove the limitations imposed by Article 19(1)(f) of the Constitution. Accordingly, any law that purports to operate under Article 31(1) must itself be a valid law, and to qualify as valid it must satisfy the standards set by the other fundamental rights. The Court noted that all the points raised in support of the opposite view had already been examined by this Court in Kavalappara Kottarathil Kochuni v. The State of Madras(1), where it was held that a law depriving a person of his property must be a valid law and therefore must not contravene Article 19 of the Constitution. The Court found no reason to depart from that earlier decision, which has been followed in subsequent cases. Consequently, the Court held that a law which deprives a person of his property would be invalid unless it can be justified as a reasonable restriction in the interest of the general public or for the protection of the interests of Scheduled Tribes.

The Court then turned to the final issue, namely whether the 1960 Act had deprived the appellants of their property rights. Framed differently, the question was whether a tenant occupying a non‑residential building in Tanjore had acquired a property right under the 1955 Act and whether that right was subsequently taken away or limited by the 1960 Act. The Court recalled that the 1955 Act conferred two distinct rights on such a tenant. First, every tenant facing ejectment was entitled to receive compensation equal to the value of any building he had erected. Second, a tenant against whom an ejectment suit had been filed was given an option to apply to the court for an order directing the landlord to sell the land to the tenant at a price determined by the court. The Court clarified that it was not concerned with the rights created under section 3 of the Act, because neither appellant had asserted any claim under that provision. Both appellants had initiated proceedings solely under section 9 of the Act and had approached the High Court for a writ of mandamus directing that the petition be disposed of in accordance with section 9. The Court therefore concluded that it was not required to opine on the constitutional validity of the Act insofar as it might have deprived the appellants of a right under section 3 of the Principal Act; that issue would need to be decided in an appropriate case. The matter before the Court was limited to determining whether the second right – the tenant’s right to apply to the court for an order directing the landlord to sell the land to him at a court‑determined price under section 9 of the Principal Act – constituted a right to property.

In this case the Court examined whether the statutory provision that allows a tenant to apply to the court for an order directing the landlord to sell the land at a price fixed by the court, under section 9 of the Principal Act, creates a right to property. The Court noted that Indian law does not recognise equitable estates and observed that no authority had been cited to support the proposition that a statutory right to purchase land constitutes an interest or a right in property. It further explained that the fact that a right is created by legislation rather than by contract does not alter the substance or the incidents of the right; the nature and scope of the right determine its character. The Court held that the right conferred by the statute is simply a right to purchase land, and if a comparable right arising from a contract is not a property right, the statutory source cannot transform it into one. Accordingly, the Court expressed the view that a statutory right to apply for purchase of land does not amount to a right to property. It reiterated settled law that a contract to purchase immovable property does not create an interest in the property itself. The Court acknowledged that a different analysis might arise where a statutory sale is actually effected and title passes to the tenant, referring to the earlier judgment in Jayvantsinghji v. State of Gujarat, which had been relied upon by counsel, but clarified that that situation was not before it. The appellants had argued that under the 1955 Act they had acquired a right to hold and enjoy the buildings they had erected by exercising their purchase right over the land, and that the impugned Act indirectly deprived them of that right. The Court observed that this argument confused two distinct issues: first, the scope and content of the statutory purchase right, and second, the consequences of the deprivation of that right for the appellants’ other property interests. It stressed that section 9 of the Principal Act, as extended by the 1955 Act, confers a right only in respect of the land and not in respect of any super‑structure thereon. While the 1955 Act would have permitted the appellants to buy the land, the subsequent 1960 Act prevented such a purchase; however, no provision of either Act ever gave the tenant a right over the super‑structure. Keeping the distinction between land and super‑structure in mind, the Court found the appellants’ contention untenable. Moreover, the Court concluded that the 1960 Act does not affect any fundamental right of the appellants, and therefore the prayer that the District Munsif be directed to proceed with the applications filed under section 9 of the Principal Act could not be granted. Consequently, the Court saw no need to express an opinion on whether the appellants, by reason of the statutory provisions, were entitled to any further relief.

In this case, the Court observed that because the lease deeds contained a specific stipulation, the parties could not obtain any form of relief even when the 1955 Act was invoked. The Court explained that the wording of the lease expressly barred the claimants from relying on the provisions of that statute, and consequently the legal right to relief was unavailable to them. As a consequence of this finding, the Court concluded that the appeals raised by the parties could not succeed. Accordingly, the Court ordered that the appeals be dismissed in their entirety. In addition to the dismissal, the Court directed that the costs of the proceedings be awarded against the appellants. The order further required the appellants to pay a single hearing fee in respect of the hearing that had been conducted. The final disposition therefore comprised a complete dismissal of the appeals together with an order that the costs and the hearing fee be recovered from the appellants. The Court’s decision thus terminated the proceedings and left the parties without any further relief. The judgment reflected the Court’s consistent approach that contractual provisions governing land tenure cannot be overridden by statutes when the statutes themselves do not confer a contrary right. The Court reiterated that the statutory framework of the 1955 Act did not create a fresh entitlement in circumstances where the lease expressly excluded such relief. Consequently, the dismissal was affirmed as the appropriate remedy.