2008 (4) TMI 722 - SC - Indian Laws

Whether Section 14(1)(e) of the Delhi Rent Control Act, 1958 (for short the 1958 Act ) is ultra vires the doctrine of equality enshrined in Article 14 of the Constitution of India?

Summary

Issues Involved:
1. Constitutionality of Section 14(1)(e) of the Delhi Rent Control Act, 1958 under Article 14 of the Constitution of India.
2. Differentiation between residential and non-residential premises in the context of eviction on the ground of bona fide requirement of the landlord.

Detailed Analysis:

Issue 1: Constitutionality of Section 14(1)(e) under Article 14
The core question was whether Section 14(1)(e) of the Delhi Rent Control Act, 1958, which differentiates between residential and non-residential premises for eviction based on the landlord's bona fide requirement, violates the doctrine of equality enshrined in Article 14 of the Constitution.

The Supreme Court analyzed the historical context of rent control legislations in Delhi, noting that initially, no tangible distinction was made between residential and non-residential premises. However, post-1947, due to the influx of refugees, the legislature imposed restrictions on the eviction of tenants from non-residential premises to ensure the resettlement of displaced persons.

The Court observed that the rationale behind such classification has become obsolete with the passage of time. The significant increase in the availability of commercial premises and the socio-economic progress of the refugee population rendered the distinction between residential and non-residential premises arbitrary and unreasonable.

The Court relied on precedents like Harbilas Rai Bansal vs. State of Punjab and Rattan Arya vs. State of Tamil Nadu, which struck down similar provisions for being discriminatory and violative of Article 14. The Court emphasized that legislation, which might be reasonable at the time of enactment, can become arbitrary and unconstitutional due to changing circumstances.

Issue 2: Differentiation Between Residential and Non-Residential Premises
The Court noted that the scheme of the 1958 Act does not inherently differentiate between residential and non-residential premises except in Section 14(1)(e). The Full Bench of the Delhi High Court had upheld this classification based on historical reasons related to the partition of the country and the subsequent need to protect tenants of non-residential premises.

However, the Supreme Court found that the reasons which justified such classification no longer exist. The Court held that the implicit restriction on the landlord's right to evict tenants from non-residential premises for bona fide personal use is now arbitrary and lacks any rational basis.

The Court declared that the discrimination latent in Section 14(1)(e) has become pronounced over time, making the provision violative of Article 14. The Court decided to sever the discriminatory portion of Section 14(1)(e) to make it constitutional, thereby allowing landlords to seek eviction of tenants from both residential and non-residential premises on the ground of bona fide requirement.

Conclusion:
The Supreme Court held that Section 14(1)(e) of the Delhi Rent Control Act, 1958, insofar as it discriminates between residential and non-residential premises for eviction based on the landlord's bona fide requirement, is violative of Article 14 of the Constitution. The Court partially struck down Section 14(1)(e) to remove the discriminatory portion, thereby enabling landlords to seek eviction from both residential and non-residential premises on the ground of bona fide requirement. The explanation below Section 14(1)(e) was also rendered redundant. The appeals were allowed, and the impugned judgment was set aside.