Supreme Court of India

STATE OF ANDHRA PRADESH AND ORS.versusNALLAMILLI RAMI REDDI AND ORS.

Citation: 2001 INSC 404
Decided: 29 August 2001
Disposal: Appeal(s) allowed
Bench: S RAJENDRA BABU

Holding

Section 82 of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, is constitutionally valid and the classification of tenants of religious institutions is permissible.

Summary

The Supreme Court examined the constitutional validity of Section 82 of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, which cancels all agricultural leases of lands held by charitable or religious institutions except those of "landless poor" persons. The State of Andhra Pradesh appealed against a High Court judgment that had struck down the provision as violative of Articles 14 and 21. The Court held that charitable and religious institutions constitute a distinct class and that the classification of their tenants is a permissible legislative classification with a rational nexus to the object of better managing institutional lands. It further ruled that the provision does not infringe the right to livelihood and that Article 31A does not apply because no immunity was granted. Consequently, the appeals were allowed and the writ petitions challenging the Act were dismissed.

Issues considered

Whether Section 82 of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, violates Article 14 of the Constitution by arbitrarily classifying tenants of religious institutions.
Whether the cancellation of agricultural leases under Section 82 infringes the right to livelihood under Article 21.
Whether the exemption for "landless poor" persons under Section 82 is constitutionally valid.
Whether Article 31A provides immunity to the Act from challenge under Articles 14 and 19.
Whether the existing tenancy Acts (Andhra and Telangana) must be excluded for Section 82 to achieve its legislative purpose.

Legislation cited

Subjects

constitutional validitySection 82religious institutionstenancyArticle 14Article 21landless pooragricultural lease cancellationclassification

Judgment

STATE OF ANDHRA PRADESH AND ORS. A
v.
NALLAMILLI RAM! REDD! AND ORS.

AUGUST 29, 2001

[S. RAJENDRA BABU AND BRIJESH KUMAR, JJ.] B

Andhra Pradesh Charitable and Hindu Religious Institutions and
Endowments Act, 1987-Section 82-Validity of

Hindu Religious Institutions and Endowments-Leases in respect of C
agricultural land-Cancellation of-Held not violative of Articles 14 and 21
of the Constitution-Section 82 does not deprive tenants of their livelihood--
Article 31-A held not applicable-Identification of 'landless' poor persons'
and protection given to them is justified.

Constitution of India, 1950-Articles 14, 21 and 31-A.
D

Article 14 prohibits 'class legislation' and not 'classification/or purpose
of legislation'-Test of permissible classification-What is-Charitable or
Religious Institutions form a separate class:

The constitutional validity of Section 82 of the Andhra Pradesh
E
Charitable & Hindu Religious Institutions and Endowments Act, 1987 was
challenged before Andhra Pradesh High Court. A Single Judge of the Hindu
Court held that (i) sub-section (I) of Section 82 is arbitrary and ultra vires of
Articles 14 and 21 of the Constitution to the extent of lessees who are marginal
or small farmers, are not excluded from its effect; (ii) sub-section (2) is F
unconstitutional in its entirety. Appeals preferred by State Governments were
dismissed by Division Bench of the High Court. It held that Section 82(1) of
the Act is violative of equal protection clause of the Constitution inasmuch
as the provisions of Section 82 singles out the tenants of the lands held by
religious institutions or endowments resulting in putting an end to their G
tenancy rights; and the said classification was not only unreasonable but also
it had no nexus to the object sought to be achieved : (i) as to payment of rent
or augmentation of the revenue of the religious institutions inasmuch as the
rents stood frozen by reason of the Andhra Pradesh (Andhra Area) Tenancy
Act, 1956 and Andhra Pradesh (Telangana Area) Tenancy and Agricultural
Land Act, 1950; (ii) that sale of lands is not a feasible proposition; (iii) that H·
287
288 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A there!~ no exclusion of application of the tenancy Acts and the lands held by
religious institutions or endowments in treating the tenants in question
differently suffers from the vice of discrimination by putting an end to their
leases. It also come to the conclusion that sub-section (2) puts an end to tenancy
rights of the landless poor persons too though in name this sub-section
B pnrports to save them from the cancellation. [298-GI

In appeal to this Court it was contended on behalr of the appellant-State
that (i) charitable or religious institution on endowment fall into a separate
category and form a class by themselves; such tenants coming under them
also form separate class and they can be treated differently from others; (ii)
C in striking down the provisions of Section 82 of the Act, the High Court has
unnecessarily relied upon far too much on the tenancy laws in force in the
State to fetter the legislature in cancelling the existing agricultural leases and
lands belonging to charitable or religious institution or endowment.

In the connected writ petitions it was contended that (i) there is a
D discernible difference between the applicability of the Act which is for
agricultural lands and other properties and Section 80 of the Act is applicable
to other properties; (ii) tenancies are inheritable and in such a situation
without paying compensation could not have deprived the rights of the same;
(iii) that Section 38-E of the Telangana Act provides for conferment of
E ownership rights to tenants in question and th is aspect has not been considered
by the High Court; (iv) the livelihood of the tenants being deprived, the
provision is violative of Article 21 of the Constitution; (v) the tenants in
question are entitled to compensation under Article 31A.

Allowing the appeals and dismissing the writ petitions the Court

F HELD : I. Whether a tenancy Act should be applicable to a religious
institution or should be kept out of it is not a matter for the court to decide.
How far a tenancy Act is applicable to a religious institution and to what extent
it should be limited is a matter for the legislature to decide. But such a policy
should not be irrational. On that basis, the court cannot interfere with the
G validity of the Act. 1298-Fl

2. Religious institutions fall into a s.eparate class and lands held by them
have a special character in respect of which tenancies had been created and
these tenancies arc sought to be put to an end to for resumption of lands for
better management thereof. Tenants under the religious institutions form a
H. special class by themselves and such classification is made, so far as tenants
STA TE v. NALLAMILLI RAM! REDD! 289
are concerned, to achieve the object of protecting the interests of the religious A
institutions. Therefore, none of the principles which result in hostile
discrimination would be applicable to the present case. [298-G]

3. What Article 14 of the Constitution prohibits is 'class legislation' and
not 'classification for purpose of legislation'. If the legislature reasonably
classifies persons for legislative purposes so as to bring them under a well- B

- defined class, it is not open to challenge on the ground of denial of equal
treatment that the law does not apply to other persons. The test of permissible
classification is two fold; (i) that the classification must be founded on
intelligible differentia which distinguishes persons grouped together from
others who are left out of the group, and (ii) that differentia must have a C
rational connection to the object sought to be achieved. Article 14 does not
insist upon classification, which is scientifically perfect or logically complete.
A classification would be justified unless it is patently arbitrary. If there is
equality and uniformity in each group, the law will not become discriminatory,
though due to some fortuitous circumstance arising out of peculiar situation
some included in a class get an advantage over others so long as they a~ not D
singled out for special treatment. [296-B-D)

4. Section 82 has the effect of cancelling all leases of agricultural lands
belonging to the institutions subsisting on the date of commencement of the
Act notwithstanding any other law in force. However, such cancellation will
not affect leases held by landless poor persons. 'Landless poor person' is E
identified by the Act as a person whose total land held by him, either as owner
or as cultivating tenant or as both, does not exceed two and a half acres of
wet land or five acres of dry land. In respect of leases held by landless poor
persons for not less than six years continuously such persons are given the
right to purchase such land on payment of 75% of prevailing market value p
being payable in four equal instalments as may be prescribed. If, however,
such landless poor persons fail to purchase the land as aforesaid or is unwilling
to purchase the land, the lease shall be deemed to have been terminated.
[295-F-Hl

5. The High Court felt that it is not possible to augment the income of G
the institution at all. Except referring to the enactments arising under the
tenancy Acts, there is no material before the High Court to support the view
as to what are the rents payable at present and what would be the rent that
becomes payable after the leases are put to an end in terms of Section 82 of
the Act and fresh tenancies commence if the lands are leased to others as H
290 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A provided under the provisions of the Act. When the material is not clear before
the court the court cannot hazard a guess as to the manner in which the
enactment would operate. How the tenancy. Acts will have effect upon the
new tenancies, would be a matter to be worked out appropriately. Therefore,
at the stage of enacting Section 82 or examining its constitutional validity,
B the High Court could not have proceeded to hold that unless the operation of
the tenancy Acts are excluded the objectives of enactment cannot be achieved.
Wherever possible, some of the lands which are not within the manageable
limits of the concerned religious institutions may be sold in the manner
prescribed in section 80 of the Act or may be leased out by them, as the case
-
may be, like a prudent owner or manager of the property. The High Court
C proceeded to consider further that cultivation of these lands by these
institutions would not be feasible. One fails to understand as to how it can be
stated so. It is certainly possible if the institutions hold large holdings of land
to have a department in the institutions to get the lands cultivated and to
except that the very same incidence and consequences will follow as were
D applicable earlier prior to coming into force of Section 82 of the Act does not,
therefore, appeal to this Court. [297-G-H; 298-A-El

7. The identification of 'landless poor persons' and protection given to
them is justified. It is open to the legislature to state as to who should be
exempt from the application of the law and, in the present case, there is
E definition of 'landless poor person' and he is enabled to purchase the land at
75% of the prevailing market value by paying in four equal instalments as
may be provided under the Rules. Therefore, that aspect of saving the small
land holders cannot be objected to nor can the meaning of 'landless poor
person' be enlarged. If, however, the said landless poor persons are not willing
to purchase the land or fail to purchase such land, the lease would lapse. This
F latter provision cannot be held to be inconsistent with the earlier provision
as has been held by the High Court because that is a consequence flowing
from the fact that such landless poor person is either not anxious to purchase
the land or fails to do so. The validity of an enactment cannot be judged by
fortuitous circumstance arising out of peculiar circumstances. Therefore, that
G reasoning of the Division Bench is also faulty. [299-A-DI

8. Primafacie, Section 80 of the Act does not appear to put a restriction.
The tenants covered either by the Andhra Act or the Telangana Act may fall
into two different categories but insofar as their holdings with reference to
the institutions are concerned, they fall into the same category. Therefore,
H the aspect that they had different kinds of rights arising under different
STA TE v. NALLAMILLI RAM! REDD! 291
enactments and make them distinct class in the present circumstance will not A
be of much relevance. 1301-H; 302-A]

9. The question of tenancy being inheritable or not would arise if the
leases are maintained but if the leases are themselves cancelled such a question
will not arise at all. (302-B]
B
I 0. Conferment of ownership under Section 38E of the Telangana Act
has no relevance to the present case at all inasmuch as ifthe proper procedure
has been adopted and the proceedings have reached the logical end, the tenant
would become the owner of the land. Therefore, Section 82 would not be
attracted to such a situation but if the proceedings have not been terminated
and a tenancy continues to be in force, Section 82 of the Act would be attracted C
, to such a case. The contention based on section 38E of the Telangana Act is
untenable. 1302-B, CJ

11. The arguments relating to livelihood also have no legs to stand.
The object of the Act is to resume lands in the hands of existing.tenants for
better management. After resumption some tenants may be dependent on D
the land leased to them by the charitable or religious institution or endowment
but it cannot be said that was the only land held by them and that was the
only avocation carried on by them. The objectives of the· cancellation of the
land is not to deprive anyone of his livelihood but, on the other hand, it is the
better management of the properties belonging to the charitable or religious E
institution or endowment. The incident that the same may result in hardship
to some of the tenants will not be a ground to say that it deprives them of
their livelihood. 1302-D, E)

12. Article 31A provides for granting certain enactments immunity
from attack under Articles 14 and 19 of the Constitution. That is not relevant F
· in the present context at all inasmuch as no such exercise has been undertaken
by the State. [302-FI

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 3694-
3 748 of 1996.

From the Judgment and Order dated 3.10.89 of the Andhra Pradesh G
High Court in W.A. Nos. 1267, I 148, 308, 593, 764, 428-32, 514, 334-48,
366-82, 385, 414-22, 520 and 521 of 1989.
WITH
WP(C) Nos. 1429/87 and J20 of 1988.
H
292 SUPREME COURT REPORTS [2001[ SUPP. 2 S.C.R.

A K. Amreshwari and L. Nageswara Rao, Guntur Prabhakar, Ms. T.
Anamika, P. Vittal Rao, Ms. Sudha Gupta, B. Kanta Rao, K.C. Sudershan,
Y. Raja Gopala Rao, Jayanth Muthraj, M.A. Chinnasamy, Annam D.N. Rao,
(NP), S. Uday Kumar Sagar (NP), K.R. Nagaraja (NP), Ms. Vrinda Dhar
(NP), R.N. Keshwani (NP) and Nikhil Nayyar(NP) for the appearing parties.

The Judgment of the Court was delivered by

RAJENDRA BABU, J. CIVIL APPEAL NOS. 3694-3748 OF 1996.

In a batch of writ petitions filed in the High Court of Andhra Pradesh
the constitutional validity of Se~tion 82 of th~ Andhra Pradesh Charitable &
C Hindu Religious Institutions & Endowments Act, 1987 [hereinafter referred
to as ·t:ie Act'] was challenged. The learned Single Judge who heard these
matters held that sub-section (I) of Section 82 of the Act is arbitrary and
ultra vires of Articles 14 and 21 of the Constitution to the extent of lessees
who are marginal or small farmers, are not excluded from its effect while
sub-section (2) was declared to be unconstitutional in its entirety. The matter
D was carried in appeal to the Division Bench. The Division Bench concluded
that Section 82( 1) of the Act is violative of equal protection clause of the
Constitution inasmuch as the provisions of Section 82 singles out the tenants
of the lands held by religious institutions or endowments resulting in putting
an end to their tenancy rights; that the said classification was not only
E unreasonable but also it had no nexus to the object sought to be achieved (i)
as to payment of rent or augmentation of the revenue of the religious
institutions inasmuch as the rents stood frozen by reason of the Tenancy Acts
in force in the State of Andhra Pradesh; (ii) that sale of lands is not a feasible
proposition; (iii) that there is no exclusion of application of the tenancy Acts
and the lands held by religious institutions or endowments in treating the
F tenants in question differently suffers from the vice of discrimination by
putting an end to their leases. For the aforesaid reasons, sub-section (I) of
Section 82 was declared void as violative of Article 14 of the Constitution.
While the question as to the enforceability of Section 82(2) of the Act is
concerned, the Division Bench observed that sub-section (2) puts an end to
G tenancy rights of the landless poor persons too though in name sub-section
(2) purports to save them from the cancellation. The learned Judges of the
Division Bench proceeded to illustrate that if the land is held by two persons
A and B who do not own any land of their own and A is a tenant of a land
of an extent of Ac.2-50 cents. wet., B is also a tenant of a land of an extent
of Ac.2.60 cents. wet. While A is a landless poor person and is saved from
H cancellation, B would not be such a landless person. To avoid discrimination
STATE v. NALLAMILLI RAM! REDD! [RAJENDRA BABU, J.] 293

between these persons, the Legislature ought to have provided that in the A
case of B his lease would not stand terminated to the extent of Ac.2-50 cents
wet and that he would be entitled to purchase to the extent of Ac.2-50 cents
,· in accordance with sub-section (2) and not providing for such a situation
amounts to discrimination between two similarly placed persons. The learned
Judges thereafter proceeded to hold what we have adverted to earlier that the B
object of augmentation of revenue of the institutions and endowments is not
realistic. However, the learned Judges did not go into the question as to the
meaning of ·marginal or small farmers' and did not find it necessary to
examine the contention of the State that the learned Single Judge had, in fact,
legislated to the extent of introducing the concept of 'marginal or small
farmers' into Section 82 inasmuch they have held the entire sub-section(!) C
to be void. The Division Bench also noticed that though there is no appeal
by writ petitioners inasmuch as the constitutionality of the enactment was
involved and when the learned Single Judge had struck down certain
provisions, their reasons were sufficient to sustain the same. The Division
Bench also did not consider it necessary to express any opinion as to whether D
it is competent for the Legislature to put an end to the tenancy rights and
whether such cancellation is violative of Article 19(1 )(g) of the Constitution
or not. On that basis, after making a declaration of law in the manner stated
above, the Division Bench dismissed the appeals filed by the State. Hence
these appeals by special leave.
E
The Division Bench of the High Court found that the classification is
unreasonable inasmuch as all tenants except those who are defined to be
landless poor tenants are covered by Section 82 and such classification has
been made which has no nexus to the object to be achieved, namely,
augmentation of income to the institutions in question and better management
of the properties. One of the reasons given by the Division Bench of the High F
Court to reach this conclusion is that the tenancy Acts, namely, the Andhra
Pradesh (Andhra Area) Tenancy Act, 1956 [hereinafter referred to as 'the
Andhra Act'] and Andhra Pradesh (Telangana Area) Tenancy and Agricultural
Land Act, 1950 [hereinafter referred to as 'the Telangana Act'] are still in
force. These enactments have not been excluded in the application to lands G
held by tenants of the agricultural lands of the institutions in question.
Therefore, the view of the High Court is that the rents are frozen and eviction
of the tenants are not possible and unless the operation of the Tenancy Acts
are excluded insofar as the lands held by the institutions in question are
concerned, the objectives cannot be fulfilled. It would only result in displacing
one tenant by another tenant and would not achieve the objectives of the Act. H
294 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A Thus there is no nexus in making the classification.
Smt. K. Amreshwari, learned Senior Advocate appearing for the
appellants, strongly contended that this approach of the High Court is plainly
unsustainable in view of the fact that the law on the matter is very clear that
charitable or religious institution or endowment fall into a separate category
B and fonn a class by themselves. She submitted that such tenants coming
under them also form separate class and they can be treated differently from
others; secondly, she submitted that in striking down the provisions of Section
82 of the Act, the High Court has unnecessarily relied upon far too much on
the tenancy Jaws in force in the State to fetter the legislature in cancelling the
C existing agricultural leases and lands belonging to charitable or religious
institution or endowment. The High Court, she complained, has speculated
on the outcome of the impugned legislation and proceeded to hold that there
is no reasonable connection with the object of the enactment in the absence
of any material other than the laws in force in the State which would not
indicate as to the type of tenants who are holders of leases under consideration,
D the rent payable by them, what rent the lands wou Id fetch after the lands are
resumed by the charitable or religious institution or endowment, possibility
of sale or self cultivation. The judgment of the High Court is based on
conjectures and sunnises unsustainable in law and they are not strong reasons
to invalidate a law.

E Shri L. Nageswara Rao, learned Senior Advocate appearing for the
respondents, however, urged that the view taken by the High Court gives
recognition to the ground realities by reference to the appropriate legislations
in force in the State such as tenancy laws and we should not ignore the same
and interfere with the order of the High Court. He submitted that all tenants
covered by the tenancy laws in the State of Andhra Pradesh fall into one
F category and to distinguish them on the basis that the lands are held by
religious institutions will lead to hostile discrimination particularly when the
object of classification is not fulfilled. He pointed out that there are about
40,000 tenants holding about 3,20,000 acres of land and the measure adopted
in enacting Section 82 of the Act is drastic resulting in deprivation of their
G leases without practical benefit to the institutions as noticed by the High
Court. Hence, he very forcefully urged that we should not interfere with the
order of the High Court. He submitted that we should take note of every
circumstance available such as matters of common knowledge, history,
antecedent legislation, social conditions, impact of other law on the impugned
law in judging whether the same would be violative of Article 14 of the
H Constitution.
STATE v. NALLAMILLI RAM! REDD! [RAJENDRA BABU, J.] 295

The legi5lation in question is preceded by a report made by a A
Commission headed by Justice C. Kondaiah, former Chief Justice of the
Andhra Pradesh High Court. It was noticed in para J .18. l of the said report
as under:

"It is stated that all concerned who are interested in the charitable or
religious institutions have stated that the temple authorities are facing B
innumerable difficulties in the management of the landed properties
of the institutions, the income is very meagre, not worth-mentioning,
and in some cases it is nil, although the institution owns large extent
of lands. Reasons thereof is the provisions of the Tenancy Act, attitude
of the persons in possession and enjoyment for several years, the C
lands belonging to these institutions are ·mostly in the hands of the
rich and powerful sections against whom the concerned authorities
are experiencing difficulties to dispossess them from the lands'. The
trustees or archakas are in enjoyment of the lands kept Benami in the
names of their relations, etc. The authorities also are in the collusion
with them. The rents paid by the tenants are nominal fixed decades D
back. The Estimates Committee also expressed the same opinion."

It is thereafter the Act in question was brought in force and in the
Statement of Objects and Reasons, inter alia, it was stated as follows:

"A provision is also made to terminate the lease held by persons E
other than landless poor persons and to enable landless persons to
purchase the lands already held by them on lease."

Section 82 has the effect of cancelling all leases of agricultural lands
belonging to· the institutions subsisting on the date of commencement of the
Act notwithstanding any other law in force. However, such cancellation will F
not affect leases held by landless poor persons. ·Landless poor person' is
identified by the Act as a person whose total land held by him, either as
owner or as cultivating tenant or as both, does not exceed two and a half acre
of wet land or five acres of dry land. In respect of leases held by landless
poor persons for not less than six years continuously such persons are given G
the right to purchase such land on payment of 75% of prevailing market
value being payable in four equal instalments as may be prescribed. If,
however, such landless poor persons fail to purchase the land as aforesaid or
is unwilling to purchase the land, the lease shall be deemed to have been
terminated. Rules have to be made providing for the authority competent to
sanction the lease or licence in respect of properties belonging to charitable H
296 SUPREME COURT REPORTS [2001) SUPP. 2 S.C.R.

A and religious institutions/endowments and. also provide for other terms and
conditions. This provision has no effect upon leases or licences of immovable
properties other than agricultural lands.
What Article 14 of the Constitution prohibits is 'class legislation' and
not 'classification for purpose of legislation'. If the legislature reasonably
B classifies persons for legislative purposes so as to bring them under a well-
defined class, it is not open to challenge on the ground of denial of equal
treatment that the law does not apply to other persons. The test of permissible
classification is two fold : (i) that the classification must be founded on
intelligible dijferentia which distinguishes persons grouped together from
others who are left out of the group, and (ii) that differentia must have a
C rational connection to the object sought to be achieved. Article 14 does not
insist upon classification, which is scientifically perfect or logically complete.
A classification would be justified unless it is patently arbitrary. If there is
equality and unifonnity in each group, the law will not become discriminatory,
though due to some fortuitous circumstance arising out of peculiar situation
D some included in a class get an advantage over others so long as they are not
singled out for special treatment. In substance, the di.fferentia re.:iuired is that
it must be real and substantial, bearing some just and reasonable relation to
the object of the legislation.

We may notice the effect of the two Tenancy Acts in force in the State
E of Andhra Pradesh. Under Section 18(2) of the Andhra Act provisions of
Sections 3 to 7 are made inapplicable to leases of lands belonging to or given
or endowed for the purpose of any charitable or religious institution or
endowment falling within Section 74(1) of the A.P.Act 17of1966. Section
18(2) of the Andhra Act further provides that rent payable by the tenants in
respect of such property will be the rent in force at the commencement of the
F Andhra Tenancy (Amendment) Act, 1974 and where reasonable rent has
been fixed under Section 74(l)(e) of the A.P.Act 17of1966, such reasonable
rent. Sections 3 to 7 of Andhra Act provide for maximum rent payable by
tenants, prescribe the form of agreement oftrnancy, provide for determination
of rent, and also for deposit of rent during the pendency of proceedings for
G fixation of fair rent. All other provisions including Sections 8 to 16 of the
Andhra Act do apply to leases in quest ion.

Insofar as the Telangana Act is concerned, it exempted from its operation
inams held by charitable or religious institution or endowment as well as
service inam lands. lnams were abolished in the Telangana area of the State
H in 1955 and that process was completed in 1973. By Amendment Act of
STATE v. NALLAMILLI RAM! REDD! [RAJENDRA BABU, J.] 297

1985, all such inams have also been brought within the purview of the Act A
and abolished and that resultant position is that none of the charitable or
religious institution or endowment in the Telangana area are exempt from the
operation of Hyderabad Act 21 of 1950. ·

The Division Bench in reaching the conclusion that Section 82 is
unconstitutional held that the two tenancy Acts in force in the State of Andhra B
Pradesh are still applicable to the institutions covered by the Act and, therefore,
the object of the enactment of Section 82 will not be fulfilled. The Division
Bench also noticed that there is no overriding effect given to the Act. In
effecting the agrarian reforms, the major programme of the Government has
been to protect the tenants by securing them a permanent tenure of the land C
and freezing the rent or conferring a right upon them to purchase the land
at certain sum which is far below the market rate and the right of the landlord
to evict them would be severely restricted and that too by initiating proceedings
before special Tribunals. Under the Telangana Act, the rent does not exceed
five times of the land revenue and in case of wet lands irrigated by wells it
is only three times the land revenue, while in case of dry lands it is four D
times the land revenue. Though a maximum rent had been prescribed under
the Andhra Pradesh Act, the same will not be applicable in view of Section
18(2) of the Act to which we have already adverted to. The Andhra Pradesh
Tenancy Act had granted perpetuity in so far as leases were concerned. The
Division Bench was impressed by the fact that Section 82 is the first attempt
to undo the right of tenants in respect of agricultural lands held by institutions E
or endowments governed by the Act. The learned Judges stated that protecting
the right of tenants is equally important just as protecting the interest of the
institutions or the endowments. Cancellation of the tenancy, by itself, will
not achieve the ends. First, the High Court considered whether augmentation
of income is possible in view of the rents having been frozen which was F
obtained on the date of the commencement of the Andhra Pradesh Tenancy
Act, 1974. They felt that it is not possible to augment the income of the
institutions at all. Except referring to the enactments arising under the tenancy
Acts, there is no material before the High Court to support the view as to
what are the rents payable at present and what would be the rent that becomes
payable after the leases are put to an end in terms of Section 82 of the Act G
and fresh tenancies commence if the lands are leased to others as provided
under the provisions of the Act. When the material is not clear before the
court, the court cannot hazard a guess as to the manner in which the enactment
would operate. How the tenancy Acts will have effect upon the new tenancies
would be a matter to be worked out appropriately. Therefore, at the stage of H
298 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A enacting Section 82 or examining its constitutional validity, the High Court
could not have proceeded to hold that unless the operation of the tenancy
Acts are excluded the objectives of enactment cannot be achieved. It is possible
under the new Rules to be framed that the Government may proceed to grant
leases or licences only to small or marginal holders of lands as may be found
by them suitable to cultivate the land thereby freeing the lands from the grip
B of rich and powerful persons. Therefore, at this stage, again to state that the
purpose of the enactment of freeing the lands from the grip of rich and
powerful persons cannot be achieved is not correct. The learned Judges have
felt that it is possible for the old tenants themselves to get back the possession
of the lands in question. But, that is as good a guess as against other
C possibilities, which we have suggested. Therefore, that will not be a permissible
ground to strike down the law. Wherever possible, some of these lands which
are not within the manageable limits of the concerned religious institutions
may be sold in the manner prescribed in Section 80 of the Act or may be
leased out by them, as the case may be, like a prudent owner or manager of
the property. The High Court proceeded to consider further that cultivation
D of these lands by these institutions would not be feasible. We fail to understand
as to how it can be stated so. It is certainly possible if the institutions hold
large holdings of land to have a department in the institutions to get the lands
cultivated and to expect that the very same incidence and consequences will
follow as were applicable earlier prior to coming into force of Section 82 of
E the Act does not, therefore, appeal to us. Whether a tenancy Act should be
applicable to a religious institution or should be kept out of it is not a matter
for the court to decide. How far a tenancy Act is applicable to a religious
institution and to w~at extent it should be limited is a matter for the legislature
to decide. But such a policy should not be irrational. We do not think on that
basis, we can interfere with the validity of the Act.
F
It is plain that religious institutions fall into a separate class and lands
held by them have a special character in respect of which tenancies had been
created and these tenancies are sought to be put to an end to for resumption
of lands for better management thereof. It is clear that the tenants under the
religious institutions form a special class by themselves and such classification
G is made, so far as tenants are concerned, to achieve the object of protecting
the interests of the religious institutions. Therefore, we do not think, any of
the principles which result in hostile discrimination would be applicable to
the present case.
So far as the validity of Section 82( I) in classifying the 'landless poor
H persons' is concerned, the High Court felt that the provisions themselves are
STA TE v. NALLAMILLI RAM! REDD! [RAJENDRA BABU,J.] ... ·299

inconsistent and that the illustration given by them, to which reference has A
already been made earlier, will show how discrimination will result. It is
settled law that it is open to the legislature to state as to who should be
exempt from the application of the law and, in the pres·ent case, there is
definition of "landless poor person" whose total extent of land held by him
either as owner or as cultivating tenant or as both does not exceed two and B
half acres of wet land or five acres of dry land having been identified as
'landless poor person' and he is enabled to purchase the land at 75% of the
prevailing market value by paying in four equal instalments as may be provided
under the Rules. Therefore, that aspect of saving the small land holders
cannot be objected to nor can the meaning of ·landless poor person' be
enlarged, as has been sought to be done by the learned Single Judge. If, C
however, the said landless poor persons are not willing to purchase the land
or fail to purchase such land, the lease would lapse. This latter provision
cannot be held to be inconsistent with the earlier provisions as has been held
by the High Court because that is a consequence flowing from the fact that
such .landless poor person is either not anxious to purchase the land or fails
to do so. The validity of an enactment cannot be judged by fortuitous D
circumstance arising out of peculiar circumstances. Therefore, that reasoning
of the Division Bench is also faulty.

None of the learned counsel appearing in the case supported the view
taken by the learned Single Judge. Therefore, we do not propose to examine E
the same.

We may sum up the upshot of our. discussion:

I. That charitable or religious institution or endowment fall into a
separate category and form a class by themselves. If that is so,
tenants coming under them also form separate class. Therefore, F
they can be treated differently from others;

2. In operation of the Act it is possible that it may result in hardship
to some of the tenants but that by itself will not be a consideration
to condemn the Act;
G
3. The manner in which the charitable or religious institution or
endowment woqld deal with the properties that are resumed after
the provisions of Section 82 of the Act come into force by
· cancelling the existing leases is in the region of speculation.
4. Fresh tenancy can be entered into and there is no material before H
300 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A the court as to what was the rent paid by tenants at the time
when the Act came into force in terms of Section 18(2) of the
Act or as provided under the Andhra Act or under the Telangana
Act. In the absence of a such material, it would be hazardous for
the court to reach any conclusion one way or the other to state
that the tenants would be frozen and, therefore, there is no
B likelihood of charitable or religious institution or endowment
getting higher rents. If there is no material one way or the other,
the presumption that the Act is good should prevail.

5. It is a matter of policy with the legislature as to whether all
provisions of the tenancy Acts should be exempt in its application
c to the charitable or religious institution or endowment in their
entirety.

6. The identification of 'landless poor persons' and protection given
to them is justified as enunciated earlier.
D 7. It will be very difficult to predict at this stage that the result of
Section 82 of the Act would be so hazardous as not to achieve
the object for which it was enacted. It would not only result in
displacing the old tenants by new tenants, it may also achieve
other social objectives in another manner. If appropriate provisions
•
E are made under the Rules and if the leases are given to small
holders of land, another social objective could be achieved.

8. In what manner charitable or religious institution or endowment
would deal with matters of this nature is a mere guess work at
this stage. On some hypothetical approach the High Court could
F not have declared a law to be invalid.

In the light of the discussion made above, we hold that the tenants of
the institutions in question fall into a separate class which is identifiable. If
that is so, what is to be next considered is whether the cancellation of the
lease in their favour would achieve the objectives of the Act. We have
G demonstrated that there is no material before the court to show that such
cancellation would not carry out the purposes of the Act, whether the legislature
should have gone ahead to exclude the applicability of the Tenancy Acts in
their application to the charitable or religious institution or endowment is
another matter.
H Thus, the order under appeal shall stand set aside and the writ petitions
STATEv. NALLAMILLIRAMI REDD! [RAJENDRABABU, J.) 301

filed by the parties shall stand dismissed. However, it is made clear that the A
undertaking given to the Court that while the writ proceedings were pending
no steps would be taken for evicting the tenants holding the lands at present
until appropriate Rules are framed shall be binding on the appellants and will
hold good even now.

Subject to these observations, the appeals stand allowed. However, in B
the circumstances of the case, there shall be no order as to costs.

W.P. (C) NOS. 142911987 AND 12011988

Certain additional contentions have been raised on behalf of the
petitioners in the other two writ petitions to the effect that Section 80 would C
not be applicable to agricultural lands while Section 82 refers only to
agricultural lands and whether the lands in question could be sold by the
charitable or religious institution or endowment themselves would be doubtful.
The learned counsel also contended that cancellation of leases of all tenancies
is arbitrary inasmuch as the protection given under the Andhra Act and the D
Telangana Act being different, the tenants could not have been classed into
one category. He next contended that tenancies are inheritable and in such
a situation without paying compensation could not have deprived the rights
to the same. He also submitted that Section 38-E of the Telangana Act
provides for conferment of ownership rights to tenants in question and this
aspect has not been considered by the High Court. He further contended that E
the livelihood of the tenants being deprived, the provision is violative of
Article 21 of the Constitution. He also drew our attention to Article 31 A of
the Constitution to contend that the tenants in question are entitled to
compensation.

We need not delve deep into the operation of Section 80 of the Act and F
whether it is applicable to the lands in question or not and as to the manner
the lands would be dealt with by the charitable or religious institution or
endowment on resumption thereof after cancellation of the leases. It is possible
to read that Section 80 of the Act is an independent provision though falling
under Chapter X with the heading "Alienation of any Immovable Property G
and Resumption of lnam Lands" and contention advanced on behalf of the
Petitioners is that there is a discernible difference between the applicability
of the Act which is for agricultural lands and other properties and Section 80
of the Act which is applicable to only other properties. Prima facie, Section
80 of the Act does not appear put such a restriction. The tenants covered
either by the Andhra Act or the Telangana Act may fall into two different H
302 SUPREME COURT REPORTS [2001] SUPP. 2 S.C.R.

A categories but insofar as their holdings with reference to the institutions are
concerned, they fall into the same category. Therefore, the aspect that they
had different kinds of rights arising under different enactments and make
them distinct class in the present circumstance will not be of much relevance.
Therefore, this contention also does not hold water. The question of tenancy
being inheritable or not would arise if the leases are maintained but if the
B leases are themselves cancelled, such a question will not arise at all.
Conferment of ownership under Section 38E of the Telangana Act has no
relevance to the present case at all inasmuch as if the proper procedure has
been adopted and the proceedings have reached the logical end, the tenant
would become the owner of the land. Therefore, Section 82 would not be
C attracted to such a situation but if the proceedings have not been terminated
and a tenancy continues to be in force, Section 82 of the Act would be
attracted to such a case. This contention based on Section 38-E of the
Telangana Act is untenable.

The arguments relating to livelihood also have no legs to stand. The
D object of the Act is to resume lands in the hands of existing tenants for better
management. After resumption some tenants may be dependent on the land
leased to them by the charitable or religious instiiution or endowment but it
cannot be said that was the only land held by them and that was the only
avocation carried on by them, the objectives of the cancellation of the land
E is not to deprive anyone of his livelihood but, on the other hand, it is the
better management of the properties belonging to the charitable or religious
institution or endowment. The incident that the same may result in hardship
to some of the tenants will not be a ground to say that it deprives them of

p
their livelihood.

The next argument of the learned counsel based on Article 31 A of the
Constitution, in our view, is entirely unfounded. Article 31 A provides for
-
granting certain enactments immunity from attack under Articles 14 and 19
of the Constitution. That is not relevant in the present context at all inasmuch
as no such exercise has been undertaken by the State.

G Therefore, we find no merit in any one of the contentions raised on
behalf of the petitioners. The writ petitions, therefore, stand dismissed. No
costs.

T.N.A. Appeals allowed and
Petition dismissed.
H

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