SARASWAT CO-OP. BANK LTD. AND ANR.versusSTATE OF MAHARASHTRA AND ORS.

                    SARASWAT CO-OP. BANK LTD. AND ANR.                                 A
                                            v.
                       STATE OF MAHARASHTRA AND ORS.

                                   AUGUST 17, 2006

                       [B.P. SINGH AND AL TAMAS KAB!R,JJ.]                             B

           Rent Control and Eviction:

           Maharashtra Rent Control Act, I999:
                                                                                       c
           Section 3(/)(b)-Exclusion of certain premises from the protection of
     the Act-Constitutional validity of-Held: It is within the legislative
     competence of the State to enact laws for the protection of certain sections
     of society on the basis of economic criteria so long as it does not result in
     unreasonable classification-The decision to exclude private limited D
     companies and public limited companies having a paid-up share capital of
     Rupees one crore or more from the protection of the Act is in consonance
     with the object sought to be achieved by the Act-Inclusion of scheduled
     banks, along with other banks, which have been excluded from the protection

-    of the Act, is also valid-The Act would have equal application to all
     premises let out either before or after the commencement of the Act-Hence, E
     provisions of S. 3(/)(b) are intra vires and did not offend Art. I4 of the
     Constitution.

            With a view to achieving the objects for which the Maharashtra Rent
     Control Act, 1999 was enacted, certain premises, as indicated in Section 3
     thereof, were exempted from the provisions of the Act. The appellants             F
     contended that the provisions of Section 3(1) of the Act offended the equality
     clause enshrined in Article 14 of the Constitution. It was contended that the
     Legislature had acted arbitrarily in discriminating between the different sets
     of premises and tenants and in prescribing the standard for the purpose of
     excluding certain companies from the protection of the Act. It was contended      G
.J   that exclusion of private limited companies and public limited companies having
     a paid-up share capital of Rupees one crore or more was discriminatory. It
     was also contended that inclusion of scheduled banks, along with other banks,
     which have been excluded from protection of the Act was arbitrary. The High
     Court held that provisions of Section 3(l)(b) of the Act were intra vires and
                                          567                                          H
    568                         SUPREME COURT REPORTS (2006] SUPP. 4 S.C.R.
                                                                                          ..
A   did not offend Article 14 of the Constitution. Hence the appeal.

          Dismissing the appeal, the Court

           HELD: I.I. Although, earlier a view had been taken by this Court that
    prescribing a standard or differentiating between categories of tenancies was
B   violative of Article 14 of the Constitution, the subsequent view taken by this
    Court is that so long as the classification sought to be made was based on an
    intelligible differentia and had a nexus with the object sought to be achieved
    by the statute, the same would not offend the equality clause contained in
    Article 14 of the Constitution.1579-A-Bf

c         1.2. It is quite clear that it is within the legislative competence of the
    State to enact laws for the protection of certain sections of society on the
    basis of economic criteria and so long as it does not result in unreasonable
    classification, it is for the Legislature to decide whom it should include or
    exclude from the application of such laws. 1579-8-Cf

D         Motor General Traders v. State uf Andhra Pradesh, I 1984] 1 SCC 222,
    Rattan Arya v. State of Tamil Nadu, 1I986f3 SCC 385, D.C. Bhatia v. Union
    of India, !1995] l SCC 104, Shamrao Vitha/ Co-op. Bank ltd. v. Padubidri
    Pattabhiram Bhat, AIR (1993) Born. 91, Delhi Cloth & General Mills ltd v.
    S. Paramjit Singh, fl990f 4 SCC 723 and Kedar Nath Bajoria v. State of West
E   Bengal, f19541SCR30, referrecl to.

          2. The decision to exclude private limited companies and public limited
    companies having a paid-up share capital of Rupees one crore or more from
    the protection of the Maharashtra Rent Control Act, 1999 is in consonance
    with the object sought to be achieved by the Act as indicated in its preamble.
F   In order to achieve such an object, a cut-off point has to be settled and the
    Legislature in its wisdom has settled such cut-of point in excluding companies
    having a paid-up share capital of Rupees one crore or more from the protection
    of the Act. 1579-DI

          3. It is not possible to accept the contention that the paid-up share capital
G of the company is not a fair indicator ofa company's worth and that its net
    worth is a better indicator. Which of the two methods ought to have been adopted
    by the Legislature is not for this Court to decide once a view has been taken
    that the method as adopted is not arbitrary or violative of Article 14 of the


H
    Constitution. Of the two methods available, the Legislature has chosen the
    one which appeared to it to be reasonable. 1579-E-FJ                                  --
     SARASWATCO-OP.BANK LTD. 1·. STATE OF MAHARASHTRA [AL TAMAS KABIR,J.] 569

       4. The other submission relating to the inclusion of scheduled banks,         A
along with other banks, which have been excluded from the protection of the
Act, is also without substance since Section 3(1)(b)(iv) is of general application
intended to cover all banks forming part of the schedule of the Reserve Bank
of India Act which may or may not overlap those banks which have been
indicated in clauses (i), (ii) and (iii). (579-G-HI
                                                                                     B
       5. Once the Maharashtra Rent Control Act, 1999 was enacted and came
into force, it would have equal application to all premises let out either before
or after the commencement of the Act.1580-A-B(

      6. The provisions of Section 3(1)(b) of the Maharashtra Rent Control
Act, 1999 are intra vires and, as has been held by the High Court, they do not       C
violate Article 14 of the Constitution.1580-B-CI

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8015 of2002.

    From the Judgment and Order dated 20.7.2001 of the High Court of                 D
Bombay in W.P. No. 1406/2001.

                                     WITH

      C.A. Nos. 8016/2002, 6017/2004, 7594/2004, 1825/2005, 6016/2004, 4830-
4831/2005, 4825/2005 and W.P. (C) No. 164/2003.
                                                                                     E
      Ranjit Kumar, Jaspal Singh, T.R. Andhiyarujina, Jaspal Singh, Soli J.
Sorabjee, Raju Ramachandran, Y.R. Naik, Rakesh K. Sharma, Imtiaz Ahmed,
Naghma Imtiaz, Abhishek Anand (for Equity Lex Associates), Shujaat Ullah
Khan, Mukesh Jain, Ambar Jain, Asha.Jain Madan, S.C. Ghosh, Snehasish
Mukherjee, PariJat Sinha, Prameet Saxena, S.V. Deshpande, S. Sukumaran,              F
Meera Mathur, Jayashree Wad, Ashish Wad for (J.S. Wad & Co.), Dr. Rajeev
B. Masodkar, Anil Kumar Jha, Mukesh K. Giri (N.P.) for R.C. Kohli (N.P.) Dr.
S.K. Verma, S.K. Mishra, Atul Kumar, Ananya Verma, Gaurav Agrawal, Naresh
Kumar, S. Janani, Deepak Goel, S.S. Jauhar, E.C. Agrawala, Mahesh Agrawala,
Rishi Agrawala, Rajiv Kapur, Shubhra Kapur, Arti Singh, Sanjay Kapur, Aslam
Ahmed, Rachna Jain, Avijit Bhattacharjee and Aniruddha P. Mayee for the              G
appearing parties.

     The Judgment of the Court was delivered by

     ALT AMAS KABIR, J. Having regard to the existence of different rent
                                                                                     H
    570                         SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A control laws in the State of Maharashtra, The Maharashtra Rent Control Act,
     1999, (hereinafter referred to as "the 1999 Act'') was enacted to unify,
    consolidate and amend the law relating to the control of rents and repairs of
    certain premises and of eviction and for encouraging the construction of new
    houses by assuring a fair return on the investment by landlords and to
B   provide for matters connected with the said purposes. The said Act came into
    force on 31st March, 2000, and repealed the existing Bombay Rents, Hotel and
    Lodging House Rates Control Act, 1947, the Central Provinces and Berar
    Regulation of Letting of Accommodation Act, 1946, including the Central
    Provinces and Berar Letting of Houses and Rent Control Order, 1949; and the
    Hyderabad Houses (Rent, Eviction and Lease) Control Act, 1954. With a view
C   to achieving the objects for which the Act was enacted, certain premises, as
    indicated in Section 3 thereof, were exempted from the provisions of the Act.

         The exclusion of certain premises from the protection provided under
  the Act gave rise to litigation in which challenge was thrown by different
  litigants to the vires of the new Act as also Section 3 (I) (b) thereof as being
D arbitrary and discriminatory and without having any nexus with che object
  sought to be achieved by the Act.

           Of the several writ petitions filed in the Bombay High Court, the Writ
    Petition of Mis. Crompton Greaves Ltd. was taken up for decision and it was
    held that the classification made in Section 3 with regard to different types
E   of tenants was on the basis of an intelligible differentia having nexus with the
    object sought to be achieved by the Act. It was held that the provisions of
    the new Act were intra vires and did not offend Article I4 of the Constitution.

          Several writ petitions were thereafter decided on the basis of the decision
F arrived at in the aforesaid writ petition filed by Mis. Crompton Greaves Ltd.
    and some of them have been carried to this Court by way of Special Leave
    Petitions which are now being analogously heard as civil appeals along with
    a writ petition filed under Article 32 of the Constitution, being No.16412003,
    wherein also the vi res of Section 3 (I) (b) of the new Rent Act has been
    challenged.
G
          The common grievance in all these appeals and in the writ petition is
    with regard to the constitutionality of Section 3 (I) (b) of the Maharashtra
    Rent Act, I999 which inter alia replaced the Bombay Rents, Hotel and
    Lodging House Rates Act, 1947.

H         Mr. Ranjit Kumar, learned senior advocate, who appeared for the
    SARAS WAT CO-OP. BANK LTD. v. STATE OF MAHARASHTRA [ALTAMAS KABIR,].] 57 J

appellants in Civil Appeal No. 8015/2002, as also for the intervenors in one      A
of the other appeals, argued the matter extensively and his submissions were
generally adopted by the other appellants and the writ petitioner with a few
variations. In order to appreciate Mr. Kumar's submissions, the provisions of
Section 3 (l)(a) and (b) of the 1999 Act are reproduced hereinbelow:-

3. Exemption.
                                                                                  B
       (I) This Act shall not apply

            (a) to any premises belonging to the Government or a local
            authority or apply as against the Government to any tenancy,
            licence or other like relationship created by a grant from or a       C
            licence given by the Government in respect of premises
            requisitioned or taken on lease or on licence by the Government,
            including any premises taken on behalf of the Government on the
            basis of tenancy or of licence or other like relationship by, or in
            the name of any officer subordinate to the Government authorized
            in this behalf; but it shall apply in respect of premises let, or     D
            given on licence, to the Government or a local authority or taken
            on behalf of the Government on such basis by, or in the name
            of, such officer;
            (b) to any premises let or sub-let to banks, or any Public Sector
            Undertakings or any Corporation established by or under any           E
            Central or State Act, or foreign missions, international agencies,
            multinational companies, and private limited companies and public
            limited having a paid up share capital of rupees one crore or
            more.
            Explanation - For the purpose of this clause the expression "bank"    F
            means, -
            (i)   the State Bank of India constituted under the State Bank of
                  India Act, 1955;

            (ii) a subsidiary bank as defined in the State Bank of India          G
                  (Subsidiary Banks) Act, I959;

            (iii) A corresponding new bank constituted under section 3 of
                  the Banking Companies (Acquisition and Transfer of
                  Undertakings) Act, I 970 or under section 3 of the Banking
                  Companies (Acquisition and Transfer of Undertaking) Act, H
    572                         SUPREME COCRT REPORTS (2006] SUPP. 4 S.C.R.

A                     1980,or

                 (iv) Any other bank, being a scheduled bank as defined in clause
                      (e) of section 2 of the Reserve Bank of India Act, 1934."

          It was co11tended that the provisions of Section 3 ( 1) (b) of the 1999 Act
B   offend the equality clause enshrined in Article 14 of the Constitution. It was
    urged that the aforesaid provisions sought to distinguish between different
    types of tenants and in particular private limited companies and public Limited
    companies having a paid up share capital of rupees one crore or more. It was
    urged that the worth of a company could not always be assessed on the basis
    of the paid up share capital and that a more correct assessment could be
C   arrived at on the basis of the net worth of the company. While a company
    having a paid up share capital of rupees one crore or more, may not be making
    large profits, a company with a lesser amount of paid up share capital, may
    be making larger profits. While the former was denied the protection of the
    Act. the latter was protected thereunder. It was urged that the distinction
D   sought to be made was not on the basis of any intelligible differentia having
    a reasonable nexus with the object sought to be achieved by the new
    enactment. It was pointed out that the new Act created a divide between
    different categories of tenants, some of whom were afforded the protection
    under thP. 1999 Act while some were excluded. It was contended that if the
    object of the Act was to provide for better housing facilities in terms of the
E   National Housing Policy then all landlords should have been treated on an
    equal footing without benefiting only a certain affluent class of landlords.

        The next contention which was advanced on behalf of the appellants
  was that even between banks, a discriminatory policy was adopted. While
  excluding banks and public sector undertakings established by or under any
F State or Central Act, scheduled banks were treated separately, thereby creating
  a privileged class of landlords. It was contended that no rational basis had
  been indicated for making such classification. It was submitted that banks
  generally require large spaces for their business activities and if they were
  excluded from the protection of the Act, they would become easy targets for
G eviction and in the event of their eviction, it would be difficult for them to
  acquire new premises of equal or similar dimensions in the same vicinity
  which could even result in the banks having to close down !heir business.

        Another submission advanced on behalf of the appellants was that
  since the banks covered by clauses (i) (ii) and (iii) of Section 3 (1) (b) of the
H 1999 Act, all come within th~ definition of "State" within the meaning of
     SARASWATCO-OP. BANK LTD. v. STATE OF MAHARASHTRA [ALTAMAS KABIRJ] 573

Article 12 of the Constitution, by invoking the rule of ejusdem generis, the       A
fourth category which referred to scheduled banks as defined in clause (e)
of Section 2 of the Reserve Bank of India Act, 1934, should also answer the
description of "State" within the meaning of Article 12 of the Constitution.
In other words, since scheduled banks were not "State" within the meaning
of Article 12 of the Constitution, they had been wrongly included with other       B
banks and excluded from the protection of the 1999 Act. It was submitted that
the classification of banks under different categories amounted to institutional
classification and discrimination within the same class which would be hit by
the provisions of Article 14 of the Constitution. It was urged that a similar
matter fell for consideration of this Court in the case of Motor General
Traders and Anr. v. State of Andhra Pradesh and Ors., reported in [1984] I         C
SCC 222, wherein a similar provision of the Andhra Pradesh Buildings (Lease,
Rent and Eviction) Control Act, 1960 fell for consideration of this Court.
Section 32 of the said Act contained a similar provision excluding certain
premises from the ambit of the Act. The said provision reads as follows:-

        32. Act not to apply to certain buildings.-The provisions of this Act      D
        shall not apply :
       (a) to any building owned by the Government;
       (b) to any building constructed on and after August 26, 1957."

       It was sought to be contended that the distinction made between E
buildings constructed before and after the cut-off date was wholly unreasonable
and was not founded on any intelligible differentia having a rational relation
to the object sought to be achieved by the statute in question. lt was pointed
out that although the said provision had been held by the High Court in
earlier proceedings to be intra vires, this Court after considering the matter F
at length was of the view that clause (b) of Section 32 was violative of Article
14 of the Constitution as it sought to create a privileged class of landlords
without any rational basis, as the incentive to build which provided a nexus
for a reasonable classification of such class of landlords, no longer existed
by lapse of time in the case of the majority of such landlords. It was observed
that while the classification may be founded on different basis what is necessary G
is that there must be a nexus between the basis of classification and the
object of the Act under consideration.

      Reliance was also placed on another decision of this Court in the case
of Rattan Arya and Ors. v. State of Tamil Nadu and Anr., [1986] 3 SCC 385,
                                                                                   .H
    574                        SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A wherein Section 30 (ii) of the Tamil Nadu Buildings (Lease and Rent Control)
    Act, 1960 was under challenge. The said provision exempted any residential
    building or part thereof occupied by any tenant, if the monthly rent paid by
    him exceeded Rs.250/-. As was observed in the said decision, the intention
    of the Legislature dearly was that the protection of the beneficent provision
    of the Act should be available only to small tenants paying rent exceeding
B   Rs.250/- per month, as they belong to the weaker sections of the community
    and needed protection against exploitation by rapacious landlords. Following
    its decision in Motor General Traders case (supra), this Court struck down
    the said provision as being violative of Article 14 of the Constitution being
    entirely inconsistent with the protection given to tenants of non-residential
C   buildings who were in a position to pay much higher rents than the rents
    which were paid by those who were in occupation of residential buildings.

         Mr. Ranjit Kumar in his usual fairness also referred to the decision of
  this Court in the case of D.C. Bhatia anJ Ors. v. Union of India end Anr.,
  [ 1995) I SCC I04, in which the learned Judges were considering the validity
D of Section 3 (c) the Delhi Rent Act, 1958, which was introduced by the Delhi
  Rent Control (Amendment ) Act, 1988, so as to exclude from the operation
  of the Rent Act, premises whose monthly rent exceeded Rs. 3,500/-. After
  considering several decisions of this Court in case of similar provisions in
  other State enactments, this Court distinguished the view that had earlier
E been taken in Rattan Arya 's case (supra) and held that tenants who could
  afford to pay a sum of Rs. 42,000/- per year could not be said to belong at
  that point of time to the weaker sections of the community so as to get the
  protection under the Act. However, it was for the Legislature to decide as to
  which section of people should be protected and what should be the basis
  of classification namely, income, rent, etc. Mr. Ranjit Kumar, however, pointed
F out that in D.C. Bhatia 's case (supra), the benefit of protection had been
  given to one class of persons, namely, those whose monthly rents were less
  than 3,500/- and a reasonable classification had been made in the context of
  the economy prevalent at the relevant time.

          In respect of the case made out in the appeal preferred by Hindustan
G Petroleum Corporation Ltd., Mr. Ranjit Kumar, who appeared for the intervenors,
  submitted that a duty had been cast on the State under Article 39 (b) of the
  Constitution to direct its policy towards securing that the ownership and
  control uf the material resources of the community are so distributed as best
  to sub-serve the common good. It was submitted that along with residential
H buildings, there was also need for other establishments, such as the one
     SARASWATCO-OP. BANK LTD. v. STATE OF MAHARASHTRA(ALTAMAS KABIR,J.] 575

being run by the appellant, which also require the protection of the Rent          A
Control Act, but had been excluded by virtue of Section 3 (I) (b) thereof.

       Mr. Jaspal Singh, learned senior counsel, who appeared for the Bombay
 Mercantile Co-operative Bank Ltd., while adopting Mr. Ranjit Kumar's
submissions, added a new dimension to the said submissions on certain facts
which were peculiar to the said Bank alone. He tried to persuade us that the       B
Bank had been included as a scheduled bank in the Reserve Bank of India
Act on !st September, 1988 whereas the premises in question had been let
out to the Bank in 1979. According to Mr. Jaspal Singh, since the letting
referred to in Section 3 (b) was in respect of a scheduled bank, and in the
instant case, since the Bank was not a scheduled bank when the premises had        C
been let out to it, the provisions of the 1999 Act could have no application
to the Bank. He also submitted that having regard to the wording of clause
(b) of Section 3 (I) of the Act, only those banks or public sector undertakings
or any corporation established by or under any Central or State Act could
be included within its ambit.
                                                                                   D
      Mr. Andhyarujina, learned senior advocate, adopted a pragmatic approach
to the problem. While adopting Mr. Ranjit Kumar's submissions, he did seek
to urge that in the definition of the expression "premises" a major change
from the 1947 Act had been introduced in the 1999 Act in that the word "land"
had been excluded from the said definition. He urged that the Legislature had
consciously omitted "land" from the purview of the 1999 Act. Mr. Andhyarujina      E
submitted that in the event the appeal preferred by the company was dismissed,
suitable time may be given to the company to vacate the premises. As an
interim arrangement, Mr. Andhyarujina submitted that his client was ready to
pay mesne profits to the landlord at the rate of Rs.60,000/- per month.
                                                                                   F
      Mr. Shujaat Ullah Khan, learned advocate, who appeared for the
appellants in Civil Appeal No. 1825/2005, submitted that the credit society
became a co-operative society in 1941 and was subsequently converted into
a multi-state co-operative society. In effect, the society was a co-operative
bank, but following the doctrine of ejusdem generis only those banks which
were "State" within the meaning of Article 12 of the Constitution and had          G
been included in clauses (i) (ii) and (iii) of Section 3 (I) (b) of the 1999 Act
stood excluded from the provisions of the Act.

     Relying on a Full Bench decision of the Bombay High Court in the case
of Shamrao Vithal Co-op. Bank Ltd and Anr. v. Padubidri Pattabhiram
Bhat and Anr., AIR (1993) Bombay 91, Mr. Khan submitted that since the             H
    576                        SUPREME COCRT REPORTS (20061 SUPP. 4 S.C.R.

A appellant was not ·'State" within the meaning of Article 12 of the Constitution,
    it could not be excluded from the protection afforded by the 1999 Act. Besides
    his aforesaid submission, Mr. Khan also adopted all the submissions advanced
    by Mr. Ranjit Kumar.

          As indicated hereinbefore, along with the civil appeals, a separate writ
B petition, being No. 164/2003, had been filed by the Central Bank oflndia also
    challenging the vi res of Section 3 (I) (b) of the 1999 Act. Appearing for the
    Bank, Ms. J.S. Wad submitted that since the Bank was a nationalized bank,
    whatever protection was made available to the government establishments
    should also be made available to the appellant.
c        The submissions made on behalf of the appellants as also the writ
  petitioner were strongly opposed by Mr. Raju Ramachandran, learned senior
  advocate, appearing for the respondents-landlords in Civil Appeal No. 7594/
  2004. Referring to Mr. Jaspal Singh's submissions, he pointed out that there
  was a basic fallacy in Mr. Singh 's contention since banking was a Central
D subject included at Item No. 45 of the Ist List of the Seventh Schedule to the
  Constitution and it is only public sector undertakings which could be
  established under a State Act.

         Also referring to the preamble of the 1999 Act, Mr. Ramachandran
  pointed out that Section 3 of the Act had been enacted in consonance thereof
E with the intention of ensuring a fair return to the landlords who were ready
  to invest in the construction of new buildings to provide greater
  accommodation. It was contended that Section 3 of the Act was integral to
  the purpose of the Act and all premises which the Legislature considered to
  be appropriate had been afforded protection under the 1999 Act, It was
F pointed out that the same would be available from Section 2 ( 1) of the Act
  which indicates that the Act, in the first instance, would apply to premises
  let for the purpose of residence, education, business, trade or storage in the
  area specified in Schedule 1 and Schedule II. No special reservation was made
  in respect of premises set apart for residential purposes. Even in the preamble,
  the expression "houses" has been used generally and does not specify
G residential houses in particular, as has been urged on behalf of the appellants.
  There was, therefore, no discrimination between premises of different types
  and only a reasonable classification has been made with regard to companies
  where the paid up capital share had been taken to be the yard stick for
  excluding certain companies from the protection provided under the Act.

H         It was submitted that while the net worth uf companies fluctuate, the
    SARASWAT CO-OP. BANK LTD. v. STATE OF MAHARASHTRA [ALTAMAS KABIR, J.] 577


paid up share capital was stable and was more concrete for the purpose of                A
assessment of a company's worth. The Legislature had to strike a balance at
a point which it considered to be just and fair and accordingly provided for
exclusion of those companies which it felt could afford to either pay higher
rents or procure alternate accommodation in the present scenario.

      It was submitted that having regard to the reasonable approach of the              B
Legislature, it could not be contended that the provisions of Section 3 (1) (b)
of the 1999 Act were arbitrary and/or discriminatory and violative of Article
14 of the Constitution.

      Mr. Ramachandran submitted that the arguments now sought to be                     C
advanced on behalf of the appellants and the writ petitioner on Article 14 of
the Constitution on account of the classification made between categories of
tenants was no longer available to the appellants having regard to the views
expressed by this Court in Delhi Cloth & General Mills Limited v. S. Paramjit
Singh and Anr., [1990] 4 SCC 723 and in D.C. Bhatia's case (supra) in which
it has been categorically indicated that it is for the Legislature to decide             D
whether or not any section of tenants should be protected in any way by law.
For the said purpose, the Legislature could identify the section of the people
who needed protection and decide how the classification was to be done or
what would be the cut off point for the purpose of making such classification.
The Court could only consider whether the classification had been done on                E
an understandable basis having regard to the object of the statute. The Court
would not question its validity on the ground of lack of legislative wisdom.

     Mr. Ramachandran ended his submissions by referring to a Constitution
Bench judgment of this Court in the case of Kedar Nath Bajoria v. State of
West Bengal, [1954] SCR 30, wherein it was stated as follows:-                           F
       "Now, it is well settled that the equal protection of the laws gua.anteed
       by Article 14 of the Constitution does not mean that all laws must be
       general in character and universal in application and that the State is
       no longer to have the power of distinguishing and classifying persons
       or things for the purposes of legislation. To put it simply, all that is          G
       required in class or special legislation is that the legislative classification
       must not be arbitrary but should be based on an intelligible principle
       having a reasonable relation to the object which the legislature seeks
       to attain. If the classification on which the legislation is founded
       fulfils this requirement, then the differentiation which the legislation          H
    578                         SUPREME COURT REPORTS (2006] SUPP. 4 S.C.R.

A           makes between the class or persons or things to which it applies and
            other persons or things left outside the purview of the legislation
            cannot be regarded as a denial of the equal protection of the law,
                       ,,

         Learned counsel appearing for the State adopted Mr. Ramachandran 's
B   submissions.

           Mr. Soli J. Sorabjee, learned senior advocate, who appeared for the
    landlords-respondents in the appeal filed by Hindustan Petroleum Corporation
    Ltd. (Civil Appeal Nos. 4830-4831/2005) urged that the Legislature was fully
C   aware of the prevailing economic conditions while including public sector
    undertakings with those institutions which were kept out of the protection of
    the 1999 Act. He urged that petrol pumps, such as the one being run by the
    appellant, require a good deal of open space, which the landlord could better
    utilize for getting higher returns. The amount of rent paid for the utilization
    of such lands were extremely meagre in relation to the value of the property
D   and the very object of the 1999 Act would be frustrated if such lands were
    not kept out of the purview of the Act so that the same could be utilized by
    the landlords for constructing new buildings which would ensure a fair return
    to them.

E          Mr. Sorabjee submitted that some of the petrol pumps were of necessity,
    situated in prime areas within metropolitan cities and the Legislature had very
    correctly excluded them from the protection of the 1999 Act.

          Much the same views were expressed by Mr. Gaurav Agarwal, who
    appeared for the respondent No.2 in Civil Appeal No. 4830-3 lof2005. It was
F   pointed out that 1228 Sq.Ft. of a commercial premises in the Fort area in
    Mumbai had been let out initially for a sum of Rs.2732/- per month and the
    present valuation in terms of the Valuer's report suggested that the rent
    should be Rs.2,45,600/- per month.

          As will be evident from the submissions made on behalf of the appellants
G and the writ petitioner, the main challenge is to the constitutionality of Section
    3 (I) (b) of the 1999 Act. In view of the categorization of different premises,
    some of which have been excluded from the protection of the Act, an attempt
    has been made to establish that the Legislature had acted arbitrarily in
    discriminating between the different sets of premises and tenants and in
H   prescribing the standard for the purpose of excluding certain companies from
    the protection of the Act.
         SARASWAT CO-OP. BANK LTD. v. STATE OF MAHARASHTRA [ALTAMAS KABIR,J.] 579

           Although, earlier a view had been taken by this Court that prescribing        A
    such a standard or differentiating between categories of tenancies was violative
    of Article 14 of the Constitution, the subsequent view taken by this Court is
    that so long as the classification sought to be made was based on an
    intelligible differentia and had a nexus with the object sought to be achieved
    by the statute, the same would not offend the equality clause contained in           B
    Article 14 of the Constitution.

           Resultingly, it is quite clear that it is within the legislative competence
    of the State to enact laws for the protection of certain sections of society on
    the basis of economic criteria and so long as it does not result in unreasonable
    classification, it is for the Legislature to decide whom it should include or        C
    exclude from the application of such laws.

          Although, the decision to exclude private limited companies and public
    limited companies having a paid up share capital of Rs. One crore from the
    protection of the Act has been questioned on the ground of discrimination,
    we are unable to accept such contention, since in our view, it is in consonance      D
    with the object sought to be .achieved by the Act as indicated in its preamble.
    In order to achieve such object, a cut-off point has to be settled and the
    Legislature in its wisdom has settled such cut-off point in excluding companies
    having a paid up share capital of Rs. One crore or more from the protection
    of the Act.
                                                                                         E
           We are also unable to accept the contention that the paid up share
    capital of the company is not a fair indicator of a company's worth and that
    its net worth is a better indicator. As submitted by Mr. Ramachandran, the
    net worth of a company may vary from time to time, but .its paid up share
    capital is.more stable. Which of the two methods ought to have been adopted          F
    by the Legislature is not for us to decide once we have taken a view that the
    method as adopted is not arbitrary or violative of Article I4 of the Constitution.
    Of the two methods ·available, the Legislature has chosen the one which
    appeared to it to be reasonable.

          The other submission relating to the inclusion of scheduled banks,             G
    along with other banks, which have been excluded from the protection of the
"   Act, is also without substance since clause (iv) of Section 3 (I) (b) is, in our
    view, of general application intended to cover all banks forming part of the



-
    Schedule of the Reserve Bank of India Act which may or may not overlap
    those banks which have been indicated in clauses (i) (ii) and (iii).
                                                                                         H
    580                         SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A         The submission of Mr. Jaspal Singh that the 1999 Act would not apply
    to the appellant-bank represented by him, appears to be an argument of
    desperation and not of conviction. Once the Act of 1999 was enacted and
    came into force, it would have equal application to all premises let out either
    before or after the commencement of the Act.

B         The issues raised befo;e us have been elaborately considered by the
    High Court, and, in our view, no fault can be found with the findings arrived
    at by the High Court. The provisions of Section 3(l)(b) of the Maharashtra
    Rent Control Act, 1999, are intra vires and as has been held by the Bombay
    High Court, they do not violate Article 14 of the Constitution.
c         In our view, there is no merit in these appeals nor in the writ petition
    and the same are accordingly dismissed.

           In this context, we are required to take into consideration Mr.
    Andhyarujina's submission for sufficient time to be given to his client to
D   vacate the premises during which the interim arrangement as proposed for
    payment of higher rent could be continued. Considering the fact that
    Mr.Andhyarujina's client is operating a petrol pump, which will require some
    time to acquire a new place and to construct the necessary infrastructure
    therein, we grant time to Mr. Andhyarujina 's client till 31st December, 2007,
    to vacate the premises occupied by them. The parties in Civil Appeal Nos.
E   4830-4831/2005 will be at liberty to have the question ofmesne profits finally
    decided by the trial court which is requested to dispose of the matter at an
    early date. Till final determination of the matter relating to mesne profits by
    the trial court, Mr. Andhyarujina's client shall pay to the landlords mesne
    profits at the rate of Rs.60,000/- per month as agreed from the date of the
F   decree till the date of vacating the premises. The amount that may be found
    due on the aforesaid basis from the date of the decree till the date of this order
    shall be paid by Mr. Andhyarujina's client to the landlords in three equal
    instalments within a period of three months from the date of this judgment
    along with the mesne profits payable each month under this judgment. The
    first of such instalments is to be paid by the 7th day of September, 2006 and
G   thereafter by the 7th day of October, 2006 and 7th day of November, 2006,
    respectively. In case of default in payment of any of the instalml"nt/s or the
    current mesne profits, the time given to Mr. Andhyarujina's client to vacate
    the premises shall stand revoked and the decree for possession will become
    executable forthwith.
H
     SARASWAT CO-OP. BANK LTD. v. STATE OF MAHARASHTRA [ALTAMAS KABIR, J.] 58 J

      Mr. Andhyarujina's client will file the usual undertaking in this Court A
in the above regard within four weeks from today. These directions will not
prevent Mr. Andhyarujina's client from negotiating with the landlord for grant
of a fresh tenancy on fresh terms and conditions, if so advised.

     Having regard to the nature of the issues involved in these appeals and
the writ petition, the parties will bear their own costs.                    B
v.s.s.                                                     Appeal dismissed.