1995 (11) TMI 477 - HC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of Sections 5, 6, and 8 of the Kerala Buildings (Lease and Rent Control) Act, 1965.
2. Challenge based on Article 21 (Right to Livelihood), Article 14 (Equality before Law), and Article 19(1)(g) (Right to Carry on Business) of the Constitution of India.

Detailed Analysis:

1. Constitutional Validity of Sections 5, 6, and 8 of the Act:
The petitioner challenged the constitutional validity of Sections 5, 6, and 8 of the Kerala Buildings (Lease and Rent Control) Act, 1965. Section 5 deals with the determination of fair rent for leased buildings, Section 6 imposes a ban on further rent increases except under specific conditions, and Section 8 restricts landlords from claiming or receiving rent exceeding the fair rent.

2. Challenge Based on Article 21 (Right to Livelihood):
The petitioner argued that the combined effect of these sections impacts his livelihood, as he depends on the rental income from his buildings. The petitioner cited the Supreme Court decision in Olga Tellis v. Bombay Municipal Corporation, which included the right to livelihood under Article 21. The Court acknowledged that the right to livelihood is a part of the right to life, but found that the impugned provisions of the Act, by making rent static and not allowing for periodic revisions, unreasonably restrict this right.

3. Challenge Based on Article 14 (Equality before Law):
The petitioner contended that the provisions are unjust, unreasonable, and arbitrary, thus offending Article 14. The Court noted that while the Act aims to protect tenants from unreasonable eviction and unfair rent, it must also be fair to landlords. The Court provided a hypothetical illustration to demonstrate the potential for unjust consequences, where identical buildings could have vastly different fair rents due to the static nature of rent fixation, thereby violating the principle of equality before the law.

4. Challenge Based on Article 19(1)(g) (Right to Carry on Business):
The petitioner argued that the provisions impose unreasonable restrictions on his right to carry on the business of renting out buildings, violating Article 19(1)(g). The Court referred to the Supreme Court's interpretation of "business" in Sodan Singh v. New Delhi Municipal Committee, which includes any activity carried out for profit. The Court agreed that constructing buildings and letting them out for rent falls under "business" and that the restrictions imposed by Sections 5, 6, and 8 are excessive and arbitrary, failing to strike a balance between individual freedom and social control.

5. Justification and Historical Context:
The Court reviewed the historical context and justification for rent control legislation, acknowledging its role in protecting tenants during times of economic instability. However, it emphasized that conditions have changed since the Act's enactment in 1965, and the static nature of rent fixation does not account for economic changes, inflation, or improvements in localities.

6. Legislative Scheme and Reasonableness:
The Court concluded that the legislative scheme provided by Sections 5, 6, and 8 is mutually dependent and cannot stand alone. The lack of provisions for periodic revision of fair rent makes the scheme unreasonable. The Court declared these sections ultra vires the Constitution of India and void, as they do not meet the test of reasonableness required under Articles 14, 19(1)(g), and 21.

Conclusion:
The Original Petition was allowed, and the provisions relating to fair rent (Sections 5, 6, and 8) of the Kerala Buildings (Lease and Rent Control) Act, 1965, were declared unconstitutional and void.