VIVIAN JOSEPH FERREIRA & ANR. versus MUNICIPAL CORPORATION OF GREATER BOMBAY & ORS.

VIVIAN JOSEPH FERREIRA & ANR.

MUNICIPAL CORPoRATION OF GREATER BOMBAY & ORS.

November 4, 1971

[S. M. SIKRI, C.J., J. M. SHELAT, I. D. DuA, S. C. Roy AND -G. K. MITTER, JJ.]

Constitution of India, 1950, Articles 14 and 19(1) (/)-Bombay Building Repairs and Reconstruction Board Act, XLVll of 1969-Ss. 27;. 28, 29-Enactment to solve /rousing protJ/em in the city and the danger arising from coj/apse of old buildings-Tax on all reside/Ilia/ buildings.-occupied by tenants at tire time of tire commencement of tire Act-Classi-fication of buildings according to age and type of construction-Varying percentage of the rateable value of buildings charged as basic /evy-Coti-stitutlona/ validitv of.

Bombay B11iJding Repairs and Reconstruction Board Act XLVll of 1969-Constitu!lona/ validity of.

Taxing Statute-Principle for determination of the· validity of.

The Bombay Building Repairs and Reconstruction Board Act, XL VII of 1969 was brought into force on October I, 1969. It was enacted as temporary measure and was to expire on December 31, 1970. The preamble of the Act recites collapses of residential buildings, acute short· age of housing accommodation and the problem of law and order arising from the increa_sing influx of persons iQto the city of Bombay in search of work as having necessitated its enactment. It also recites the recom-mendations, suggestions and objections received by the government in response to the proposals made by it and its conclusion after consi<!ering them, as to t~e necessity for establishing Board to deal with the prob· !ems. The Act is confined to residential buildings occupied by tenants at the time of the commencement of the Act. Section 28 els. ·(a) (O (J) exempts buildings exclusively occupied by the owners, buildings exclu· sively used for non-.residential purposes, buildings exclusively o::cupied on leave and licence, open land not built upon, buildings vesting in or leased to cooperative societies and buildings which might be erected after the commencement o_f the Act. Section 27 provides for the levy of tax on buildings and lands, save those exempted under s. 28, at rates of percentum of the rateable value of the properties as laid down in the Schedule to the Act. Section 29 divides the buildings so taxed into categories A, and C. Buildings built prior to September- I. 1940 fall into c~egory A; those built between September 1. 1940 and December 31. 1950 fall into cate· gory B; and those built be!ween lanuary I. 1951 and the date on which the Act was brought into force fall into category C. Varying percentage of the rateable value of the buildings is charged as basic levy and at higher rate when any such building is structurally repaired. The Act thus makes three kinds of classif.0 atioos namely, ( ll by confining the iax t<> the. resi~·~ntial t~nantcd buildings it classifies buildings which are used for res1dent1al purposes and am tenant•d, from the rest; (2) bv confirming the tax to such existing building it classifies them from those built after the date on which the Ad is !>rough! into force and (3) by dividing tho·e which are liable to tax into lbree cate~ories according to the three periods in which they were constructed. The amount recovered under the levy

is to be first credited to the Consolidated Fund of the State, and, there· after, to be transferred by suitable appropriation to the fund designated as the Bombay Building Repairs and Reconstruction Fund. An owner who is required to pay the tax pays only 10% of the ra~>able veilue of the building and is entitled to recover the balance from the tenant by making corresponding increase in the rent payable by such tenant. During the life of the Act such an owner is not bound to keep the premises let in good and tenantable repair.Owners of two residential buildings in the city of !3ombay neither of which was, by reason of its having been recently constructed, either dilapi-dated or in dangerous condition challenged the constitutiorolity of the Act on the grounds ( i) the tax amounted to unreasonable restriction and could not be said to be for public purpose in that it benefited neglectful and defaulting owners, and, therefore, violated Art. 19(1) (f) of the Copstitution; (ii) the Act was discriminatory and, therefore, infringed Art. 14 because, (a) the classification of bµildings into tbree categories and imposition of different rates of tax was not based on any rational principle; and (b) the exemption given to buildings under els. (g), (h), (i) -and (j) of s. 28 and the classification between buildings constructed before the Act and those constructed thereafter was irrational without being founded on any principle.

HELD : The Act is valid and the petitions unsustainable.

( 1) The principles arising from the decisions of tbis Court wherein the question of validity of taxing statutes have arisen are : (i) in order tbat tax may be valid it must be, first, within the competence of the Legisla-iure imposing it, secondly, it must be for public purp0se and thirdly, it should not \iolate the fundamental rights guaranteed by Part III of the Constitution. (iil taxing statute is as much subject to Art. 14 as any other statute; but in view of the inherent complexity of fiscal adjustment of diverse elements larger discretion has to be permitted to the legislature for classification ~ long as there is no· tralll\gression of the fundamental principle underlying the doctrine of classification; (iii) taxing statute is not invalid on the ground of d'scrimination merelv because other objects could have been, but are not taxed by tbe legislature; (iv) when statute divides the objects of tax into groups or categories so fong as there is equality and uniformity within each group the tax cannot be attacked on the ground of i.ts being discriminatorv: and (vl the mere fact that tax falls more heavilv on some in the same group or category is by itseJ( not ground for its invalidity. (268 E-269 D.l

K. T. Moopil Nair v. Slate of Kera/a, (1961] 3 S.C.R. 77, Raja Jagan-nath v. U.P., (1963] I S.C.R. 220, East India Tobacco Co. v. Andhra Pradesh, [1963] 1 S.C.R. 404, Khandige Sham Bhatt v. Agricultural In· Come-tax Officer, (1963] 3 S.C.R. 809, Andhra Pradesh v. Na/la Raia Reddy, [1967] 3 S.C.R. 28, Ravi Varma v. Union of India. [1969] 3 S.C.R. 827, and Twyford Tea Co. Ltd. v. State of Kerala, [1970] 3 S.C.R. 282, referred to.

Where the object of tax is directly private, indirect and , incidental benefits which mar. result to the public do· not make public purpose. But the purpose of tax would not be regarded as private merely because some persons might receive more benefits from the use of its proceeds than others or. is imposed for purpose other than Tevenue. But. the principle that funds raised by taxation cannot be expended for private use does not prevent the legislature from looking at the ultimate rather than the immediate result of the expenditure, and incurring an expense

or creating liability on the part of the public which it was under no conslltullorial obugatJon to incur or create if the ultmlate effect will be benefkial to the public. The fact that statute auihonsing an expendi-ture ol puolic tunas for public purpose may foster another enterprise which is not public one does not invalidate the statute if the purpose of the expenditure is legitimate because it is public. The test is not as to who receives the money but the character of the purpo~e for which it is expended. What is to be borne in mind is the distmction between the purpose -and the method of its implementation. [272 B-E)Cooley on Taxation (4th ed.), Vol. 1, Ch. 4, Arts. 174 to 221; Ameri-can Jurisprudence Vol. 51, paras 321 and 329. Ibid, para 330 at p, 381; and Carmichael v. Southern Coal & Coke Co. 81 L. Ed, 1245 and American Jurisprudence, Tr.xation, Vol. 51 p-ara 353 at 396.

The incidence of tax may fall upon class or indi\iduals who derive no benefit from its expenditure or who are not responsible for the mis-chief to remedy which the tax is imposed. Besides, in the present case the doctrine of benefits cannot apply first, because the cess goes directly to the Consolidated Fund and, secondly, because the legislature has the power to authorise expenditure out of the consolidated fund on any public purpose. [272 GI

Carmichael v. Southern Coal & Coke Co., 81 L. ed 1245, -at pp. 1261 and 1265, referred to.

Both the purpose of the tax and its use are, without doubt, for public purpose. The pm pose is to prevent collapses and the suffering they must cause. The use is for pr•Jservation and pr01onging the life of t.1.0 buildings existing at the date of the enactment. If. in implementing the purpose, which is demonstrably public, some benefit reaches particular individuals, the statute which does not directly purport so to do, cannot be invalidated. (273 CJ

(ii) When combination of various factors raised problems which are of imminent concern to the state as well as the municipal authorities, if the legislature took policy. decision to give priority to the residential tenanted premises, in respect of which in its opinion, the. danger was graver and imminent no challenge to the division between residential and non-residential premises can be sustainable particularly when dealing with part of the problem and confining its treatment to residential premises only was considered feasible. In the light of the studW. undertaken by the government and the corporation if legislature thought it best to pre-ser\'e and prolong the life of existing structures no challenge on the ground of discrimination or arbitrariness can legitimately be made. Therefore the classification of residential premises from the rest and that between those existing at the time when the Act was brought into force from the new ones whicti might be built thereafter can ·be regarded as based on intelligible dilferentia and related to the objectives and their fe-asibility which the legislature had in mind while undertaking the questioned legis-lation. [275 A-GI

The classification of buildings into three categories is based on their age and the construction current during the period of their erection. It is therefore b-ased on intelligible ditferentia and is closely rela~!d to the objects of the legislation. There is, therefore, no question of unequals being treated as eauals as earh building in respect of which the tax is payable falls within the surveillance of the Board and bas to be struc-turally repaired if the need were to arise. Further, the tax is payable on

the rateable value of each bullding which di1ters froin bliildlng to b~ilding and ii is distributed beiween o'Wnei's and the ie11ants, the former b~~tiilg 10% of it only. 1275 H, 276 C, 277DJ

The grievaqce that individual tax-payers get more or less return from the tax proceeds would not be sustainable ground for challenge against .its constitutional validity. The primary object of the Act is not to repair all buildings subject to cess but to preveni the annually recurrent mischief of house colla~ses and the human tragedy and deprivations they cause. The tax being thus levied to prevent such disasters, there is no question of unequal treatment between one class of owners and another .. [276 Fl

Moopil Nair v. State of Kera/a, [1961] 3 S.C.R. 77, New Manek Chowk Spinning & Weaving Mills Co. Ltd. v.· Municipal Corporation of the City of Ahmedabad, [1967] 2 S.C.R. 679 al!d Railroad Retirement Board v. Alton Railroad Co., 79 L.ed., 1468, held inapplicable.

The buildings in each of the categories exempted under s 28, form distinct class by themselves., Buildings in els. (a) to (f) are buildings to which Rent Act does not apply a.nd therefore the consider~tions for which the cess is levied do not appfy to them. Buildings used for non-residential purposes do not fall within the scope of the Act and therefore had to be excluded from the levy of the cess. Buildings vesting in or leased to cooperative societies form class by themselves and cannot be equated with buildings built by individuals. The relation between society and its members are not the same as those between landlords and tenants and besicles, there is considerable control b.¥ the Regi;trar over the administration of the funds of the societies and overall si.pervision over their affairs. The premises occupied by licences form distinct class by themselves, and could not have been lumped together with tenanted premises without the danger of challenge under Art. 14. The circum-stanc~s which led to the imposition of the cess do not apply to premises in the OCCU1'3tion of licensees because such licensees have no rights such as the tenants have. namely, irremovability and the freezing of rents, and the consequential reluctance or inability of the landlords to mamtain their premises tenantabie repairs. If buildings used for non-residential pur-poses on the basis of leave and licence are validlv treated differently, buildings, if used partly for one and partlv for another such purpose or purposes can also be similarly treated provided that no part or narts there-of are occupied or used for purpose other than those soecified in the three clauses'. Since these buildine:s form separate classes bv lhernselves from the tcnantS!f residential premises, the provisions for exempting tloiern cannot be held "" violative of the equal protection clause. [277 F-278 G]

Writ Petitions Nos. 187 and 188

ORIGINAL JURISDICTION of 1970.

Peti1ion under Art. 32 of th.~ Constitution of India for enforce-ment of the fundamental rights.

S. J. Sorabjee and B. R. Aganvala, for the petitioner (in both the petitions).

J. B. Dadachanji and

M. C. Bhandare, P. C. Bhartari,

Ravituier ~. for respondent no. 1 (in W.P. No. 187 of 1970).

P. C. Bhartari, J. B. Dadachanji and .Ravinder Narain, for

respondent no. 1 (in W.P. No. 188 of 1970).

M. C. Setalvad, P. K. Chatterjee and B·. D. Sharma, for res-

pondent no. 3 (in W.P. No. 187 of 1970).

M. C. Bhandare and B. D. Sharma, for respondent no. 3 (in

W.P. No. 188 of 1970).

S. J. $orabjee, R. D. Diwan and I. N. Shroff, for the intervenei-

(in W.P. No. 187 of 1970).

The Judgment of the Court was delivered by

Sbelat, J. These petitions by owners of two residential build-

ings in the city of Bombay, neither of which is, by reason of its having been recently constructed, either dilapidated or in dange-D rous -condition, challenge the validity of the Bombay Building Re-pairs and Reconstruction Board Act, XLVII of 1969.

The preamble of the Act recites collapses of residential build-

ings, acute shortage of housing accommodation, and the problems of law and order arising from the unceasing influx of persons into the city of Bombay in search of work as having necessitated its e.nactment. It also recites the recommendations, suggestions and objections received by Government in response to the proposals made by it and its conclusion after considering them as to the· necessity for establishing Board to deal with the said problems by carrying out structural repairs to dangerous buildings, by ac-quiring and reconstructing buildings which are beyond repair and by providing for the rehousing of occupiers, who, because of such repairs would be dishoused, and to provide for the temporary levy of an additional cess on buildings an!! lands to meet the expendi-ture for the aforesaid purposes. The Act was brought into force on October l, 1969 and the cess payable thereunder became operative as from November 1, 1970.

The Act by s. 1 ( 4) is declared to be temporary one and· would expire on December 31, 1979. Structural repairs are defin-ed bys. 2(s) as meaning repairs or replacement of decayed, crack-ed, or ~t of plumb structural components of building or any substantial part thereof or any part to which the occupiers have common access, by new ones of the like materials, or of different materials including change in the mode of -construction such as converting load bearing wall type or timber framed structure to an R.C.C. one, which repairs or replacement, if not carried out expeditious!y, may res\llt in the collapse of the building or anypc.rt thereof. Ss. 3 and 4 provide for the establishment and coin-position of the Bombay Building Repairs and Reconstruction Board. Ss. 21 and 22 lay down the duties, powers and functions of the Board including the power to carry out structural as also tenantable repairs, to move the State Government to acquire old and dilap!dated properties in respect of which the cess is levied and which, in the opinion of the Board, are beyond repair and to reconstruct new buildings thereon, to establish transi1 camps to temporarily accommodate persons dishoused and to demolish dangerous and dilapidated buildings incapable of being repaired at reasonable cost. S. 27 provides that subject to the provisions of s. 28 there shall be levied tax on buildings and lands called the Bombay Buildings Repairs and Reconstruction Cess at the rate of so many percentum of the rateable value of the concerned property as is prescribed therefor under the Schedule to the Act. Sub-s. 4 of s. 27 provides that the share of the owner shall be 10 per cent. of the rateable value of the property and confers right on such owner to recover the balance from the tenant by making proportionate increase in rent and recovering it as such. S. 28 enumerates various classes of buildings which are exempted from the enforcement of the levy. S. 29 lays down three categories of buildings to which the Act applies. The Schedule to the Act provides different rates at which buildings falling in each category would be subject to the cess. The Schedule also provides in res-pect of each category of buildings different rates at which the cess would be payable if structural repairs are carried out to such building. The proceeds of the cess would be first credited to the consolidated fund of the State and thereafter under an appropria-tion duly made by law in that behalf would be transferred to fund, the amount of which would be placed at the disposal of the Board for carrying out its several functions. (s. 31 ). Lastly, s. 71 provides that in the case of any building subject to the cess, the owner shall not be bound to keep the premises . let to any occupier in good and tenantable repair and accordingly s. 23 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 194 7 shall be deemed to have been suspended and the provisions of the Transfer of Property Act, 1882 relating thereto shall apply.

Counsel for the petitioners challenged the validity of the Aci principally under three heads : (1 ) that in the context of the existing legislation, i.e., the Bombav Municipal Corporation Act, III of 1888 and the Bombay Rent Control Act, 1947, the imposi-tion of cess on residential buildings, which are in sound and good condition, and which would not require structural repairs for the entire period of the Act, amounts to an unreasonable .re-striction, and therefore, violates Art. 19( 1 )(f) of the Cons•1tu-tion; (2) that the Act is al<o violative of Art. 14, in that, it fails to recognise the material differences between various buildings

V1VIAN JOSEPH V. MUNIC. CORP, BOMBAY (She/at, /,) 263

with regard to their physical conditions and treats unequals as equals; and (3) that the exemption provided by s. 28 are arbi-trary and without any principle, and therefore, violate Art. 14. Counsel argued that by subjecting residential buildings in sound condition to the cess, the Act in substance and effect provides bounties for those owners who have been neglectful of their buildings and have infringed requisitions issued to them by the Municipal Corporation. Counsel for the respondents, on the other hand, urged ( 1) that the imposition of the tax was by virtue of power under Art. 246 ( 3) read with entry 49 in List II of the Seventh Schedule of the Constitution, and being for public purpose cannot be challenged as an unreasonable restric-c tion, (2) tbat there is an intelligible classification of the buildings and such classification having rational nexus with the objects of the Act and the mischief it seeks to avert, it is nO'I challengeable on the ground of its being discriminatory; and ( 3) that the exem-ptions in s. 28 are provided for in the light of the objects and the scope of the Act and being in consonance with them, s. 28 is not open to such challenge.

The argument of Mr. Sorabji, however, was that the cess amounted to unreasonable restriction and could not be said to be for public purpose, in that, it benefits ueglectful and defaul-ting owners at the cost of owners who have been looking after their properties and consistently carrying out tenantable repairs, thus preventing their buildings from being reduced to dangerous conditions. In this connection, he relied on certain passages from Cooley on Taxation (4th ed.), vol. 1, American Jurisprudence, vol. 51 on Taxation and the Commissioner, Hindu Religious Endowments v. Lakshmindra.([1]) The argument was that the tax was objectionable as it equated buildings in dangerous and dilapi-F dated conditions with those in good and sound condition, thus, laying down fictional equality in the teeth of factual and physical inequality. Counsel relied for that argument on K. T. Moopil Nair v. The State of Kera/a(') and urged that the tax should be declared invalid on the principles laid down therein. He also argued that the classification of buildings into three categories imposing different rates of tax was not based on any rational principle as even recently constructed buildings and buildings not needing or likely to need structural repairs were brought into the class of buildings subject to the cess. There was next an assump-tion, he argued, not based on realities, that building constructed before certain number of years would need structural repairs although it has been kept in proper condition and therefore not needing such structural reoairs. building constructed several years ago might be in better condition if consistently taken care

(2) [1961) 3 S.C.R. 77.

-0f than the one built later but not taken care of, yet such build-ing, only because it was built earlier, is subjected to higher rate of tax. Sec. 27 and the Schedule created discrimination between properties (a) inter se in the same category, (b) between build-ings in different categories, and ( c) in imposing the same percen-tage on buildings in the same ca<tegory though •their actual condi-tions ap~ totally different and also between buildings in different categones. Thus, buildings in category· A, built say in 1900 and those built in 1939 are treated as equals. Even buildings erected at about the same time need not be equal in condition, as, in the case of one tenantable repairs might have been consistently carried out or structural repairs might have recently been carried out than the one in which no such repairs, tenantable or structural, have so far been carried out. Even if such tax was necessary, its levy should have been made dependable on the actual condi-tions of the buildings and after survey of the necessity and the extent of structural repairs required. Further, buildings in sound condition and not needing structural repairs ought to have been exempted. The Act, thus, does not take notice of the actualities in the sense that though building built in 1939 but wherein ex-tensive repairs have been carried out in 1968 would be better building than another built in 1950, yet the former has to pay the tax at higher percentage than the latter. The categorisation of the buildings, therefore, was arbitrary and not based on any rational principle.' Counsel also attacked the exemptions given to buildings falling under els. (g), (h), (i) and (j) of s. 28 as being irrational and without being founded on any principle. Lastly, he urged that the classification between buildings cons-tructed before the Act and those constructed thereafter was not valid since there was no nexus between the date fixed under the Act and the objects of the Act. Even assuming that the Act were to bf' found to be valid, those buildings which were sound in con-dition and were likely to remain S-O throughout the life of the Act could be separated from the rest and restraint against tax being enforced in respect of them can be imposed. The attack against the validity of the Act thus falls under two heads : (a) that the cess is not for public purpose as it results in bounties to owners whose buildings need structural repairs at the expense of those whose buildings are sound and are not likely to need any such repairs, and (b) that it suffers from arbitrariness and is violative of Art. 14.

Before these contentions are examined it is necessary to consi-der the background in which the Act was passed as that would. throw \ight upon the targets which the Legislature had in mind while enacting it.

Prior to the iast World War. buildings had been one of the major investments in the city of Bombay, The cost of construe-

tion, owing to the easy availability of building materials, was fairly reasonable and the cost of upkeep and maintenance cor-respondingly low. It was then tenant's market as there was then no pressure of population on the city as it is now due to rapid industrialisation, concentration of industries and other allied reasons. The owners of properties then had sufficient incentives to keep their properties in satisfactory repairs. The situation, however, was completely reversed at the end of the last World War as the gap between the demand and supply had by then widened at an alarming rate. The result was the emergence of the Rent Control Act which froze the rent at the pre-war level and gave security to the tenants by conferring on them the status of irremovabilitv. The building materials in the meantime became scarce, and consequently, with the freezing of rents and the rising costs of materials, the incentive to maintain properties in good repair gradually vanished. As the gap between demand and supply of accommodation grew wider, the pressure on the existing premises substantially increased. The situation got worsened by reason of the reluctance of the owners of the buildings to maintain their properties in tenantable repairs as they found carrying out the repairs uneconomical. more comprehensive Rent Control Act then replaced in 1947 the existing 1939 Act which had by them been found inadequate. But while it guaranteed to the tenants security of tenancy rights it generated an increasing re-luctance on the part of the owners to invest any more capital on. their buildings as that type of investment was found to be less and Jess attractive.

One of the features of the city is that large percentage of the existing residential buildings in it had been constructed several years ago. Being almost an island city with limited construction space, the buildings had to expand vertically, feature not then prevalent in other cities. These buildings were built on timber frames as R.C.C. construction had not then come into vogue. Several of them .had been built upto five or six storeys having mostly one or two rooms tenements, each of which was habited by large number of persons. The saline atmosphere of the city coupled with the absence of repairs carried out on this type of structures began to have its inevitable consequences. Collapses of houses which were almost unknown in pre-war days began to occur in increasing numbers till the figures rose to about 125 on an average per year. These collapses had their toJJ in the loss of human life, physical injuries to the residents of those buildings and the dishousing of large number of persons from amongst the teeming population residing in them.

'Tue problem became so alarming that the city Corporation carried out in 1956 comprehensive survey of buildings in all its

seven wards. The survey was confined mainly to buildings used for resideJ!tial purposes. That was not due to the absence of likelihood of human loss, suffering and deprivation of accommo-dation occurring in non-residential premises, but presumably be· cause the need for such survey of residential premises was found to be of more urgent character. The survey revealed that there were within the city 36,000 residential buildings, of which 17,490 were built prior to 1905. The survey showed that residential buildings fell into six categories, namely, 7 .48 % being buildings in steel or R.C.C. frame, 1.58 % with external masonry walls and steel or R.C.C. frame, 33% with timber frames, 42% with exter-nal masonry walls and internal timber frames, 1 % with masonry walls and jackarch floors and 15 % temporary tin sheds. The re-port further revealed that of the said 17,490 buildings, (a) 5,081 of them had future life of five years only, (b) 3,549 future life of six to ten years, ( c) 3,286 future life of eleven to fifteen years, (d) 3,583 future life of sixteen to twenty-five years, (e) 1,716 future life of more than twenty-six years, and (f) 275 in sound condition. Therefore, by 1969 when the impugned legis-lation was undertaken, buildings in (a), (b) and (c) and partly in ( d) classes had already outlived the period of their survival. The total number of families living in buildings which imminently required substantial repairs, if they were to survive, came to 1,04,270, 80%of whom were occupying one room tenements.

The Report on the development plan for Greater Bombay,

submitted to the State Government in 1964, stated that out of about seven lacs tenements in Greater Bombay as on March 31, 1961, 23% of them containing 18,000 buildings would need ex-tensive repairs in the next fifteen years and about 1,000 of them would have to be immediately demolished. 10,000 buildings would have life of about ten years, and 7,000 life of fifteen years.

With such situation it was no wonder that collapges of build· ings became almost an annual occurrence particularly during rainy seasons. In 1965, the State Government . appointed the Bedekar Committee to examine the problem. The Committee reported the following principal causes of collapses;

1. Indifference of owners to repair due to the freez-ing of rents, on the one hand, and the rise in the cost of building materials, on the other;

2. Resulting leakages in sanitary blocks; 3. Failure to demolish buildings even where they were incapable of being sustained with repairs only; 4. Overcrowding in the tenements, and the conse-quent increasing pressure on sanitiny services therein, and

5. Soarini: land values tempting owne_rs to let their buildings collapse rather than contmue to have them let out on frozen rents.

Amongst the difficultie6 presented by the current law, the Com-mittee found one of them in the absence of an independent ageRcy to finance and execute repairs on behalf of owners or _ten~ts who have no means to carry them out .even when otherw1s7 wil-ling to do so. Such was the reluctance of the owners to m~t capital in these buildings that though 1. 8 ,000 nouces for ma1_or repairs were issued by the Corporation smce 1 ~60, only one third of them were complied with. The Committee also noted that according to the Municipal engineering _st~ff incharge of the seve-ral wards in Greater Bombay, 386 bmldmgs had already been declared unsafe and by_l970 and 1980 751 and 2416 more buildings would respectively be due for demolitfon. '!'~us, . total of 3,600 buildings having about 2 lacs of people hvmg m them would be threatening collapse and would have either to be demolished or repaired in time to prolong their lives. On the several recommendations made by the Committee, one Was to have separate department to deal with problems connected with the demolition of old structures, construction of new buildings replacing old ones, and annual and special inspection of buildings. For prevention of collapses it suggested, (a) timely demolition where collapses were inevitable, (b) special repairs where it was possible to prolong the life of old structures, ( c) acquisition of old buildings and replacing them with new ones, ( d) provision for temporary transit accommodation for persons dishoused in this process, and ( e) encouragement to local bodies and housing cooperatives to construct residential accommodation, since that was the only way of augmenting residential premises.

The problem confronting the State Legislature as appearing from these reports was that of the 17,490 buildings out of the tot~! _36,000 surveyed by the Corporation, barring only 1991 such buddmgs, the rest of them would have outlived their lives by about 1980. On June 3, 1968 the Government published certain proposals for eliciting public opinion for legislation to prevent c?lla?ses and salvaging dilapidated structures, It was after con-sidenng the recommendations, suggestions and objections receiv-ed by th_e Government that the impugned Act was brought before the ~egislature. The Act was confined to the problem of resi-d~ntial houses only. 'J!iat ~as n?t _because there was no danger o __ collapses. of non-residential bmldmgs, but because it was con-H s1d~red _feasible _to d~al with limited problem, namely, that of residential. ~rem1ses m respect of which the distress was accuter. As ~he ~mister for Housing said during the oassage of the bill, the mtention of the Government was "to hit the evil where it is 4-L500Sup.Cl/72

greatest". It is also clear that following the reports, such as the survey report, and the report of Bedekar Comn1;ittee, the; Act placed the residential buildings into three categones accordmg to the periods durin_g which they were constructed and the construc-tion in vogue dunng those periods. The. date, September 1, 1940, in resoect of category was chosen as 1t was from that date that the rents were frozen under the Rent Control Act.

The life of the Act upto 1979 only, restricting it to residential buildings only, their division into three categories, the raising of the fund for implementing the purpo= of the Act from three agencies immediately concerned with the problem, the Govern-ment, the O~rporation and the owners and occupiers, the exemp-tions from the operation of the Act in s. 28, all these emerge from the earlier investigations and reports of which the Legislature and the Government were aware of. As aforesaid, the mischief which the Legislature intended to avert applied -also to non-residential premises. But the L!.'gislature was entitled to choose priorities according to the degree of danger apprehended by it, and ·there-fore, no infirinity, constitutional or otherwise, can be attributed to such priority if it chose part of the problem which it thought should be dealt with immediately, not because it was blind to the larger problem but because it considered dealing with part of it as feasible. ·

The question of validity of taxing statutes has arisen before this Court in number of cases. The principle emerging from them is that in order that tax may be valid, it is firstly, within the competence of the legislature imposing it, secondly, that it is for public purpose, and thirdly, that it does not violate the funda-mental rights guaranteed by Part III of the Constitution. The taxing statute is as much subject to Art. 14 as any other statute. (K. T. Nfoopi/ Nair v. Kerala(I), Raja Jagannath v. U. P.('), East India Tobacco Co. v. Andhra Pradesh([1]), Khandige Sham Bhatt v. Agricultural Income TaJG Officer(') and Andhra Pradesh v. Nalla Raia Reddy("). Bat in view of the inherent complexity of fiscal adjustment of diverse elements larger discretion has to be pennitted to the Legisla:ure for classification so long as there is no transgression of the fundamental principles underlying the doctrine of classification. (cf. Khandlge Sham Bhatt v. Agricul-tural Income Tax Officer('). Thesii principles are that the classi-fication must be based on an intelligible differentia which disting-uishes persons or objects grouped together from others left out of the )!roun, and that differentia must have rational nexus with the object of the statute. So long as these principles are properly

(!) [19611 3 SC R 77. (2) [1963) ! S.C.R. 220. (3) [1963] l S.C.R.404. (4) [1963)S.C.R. 809. (5) [1967) 3 S.C.R. 28.

followed in classifying persons or objects for taxation, the power to classify must be wide and flexible so as to enable the Legislatilre to adjust its system of taxation in all proper and reasonable ways. (see Khandige Sham Bhatt v. Agricultural Income Tax Officer(')

It is well recognised that Legislature does not have to tax everything in order to tax something. It can pick and choose districts, objects, persons, methods and even rates of taxation as long as it does so reasonably([2]). taxing statute is not invalid on the ground of discrimination merely because other objects could have been, but are not taxed by the . Jegislature. (Ravi Varma v. Union of India(')]. When statute divides the objects of tax into groups or categories, so long as there is equality and uniformity within each grol!P· the tax cannot be attacked on the ground of its being discriminatory, although due to fortuitous circumstances or particular situation some included in class or group may get some advantage over others, provided ofcourse they are not sought out for special treatment. Khandige Sham Bhatt v. Agricultural Income Tax Officer('). Likewise, the name fact that tax falls more heavily on some in the same group or category is by itself not ground for its invalidity, for then hardly any tax, for instance, sales tax and excise tax, can escape such charge. [Twyford Tea Co. Ltd. v. State of Kera/a(')].

Definition of taxation imply that legislature can impose tax for public purpose only. tax for purposes other than public purposes would constitute taking of property without due process of law within the meaning of the Fourteenth Amendment in the United States. It would be objectionable in this country by reason of Art. 31 (I ) of the Constitution ( •). Taxation, how-ever, is, nonetheless, for public purpose even if particular persons receive more benefit from the use of the tax proceeds than others(").

perusal of the provisions of the Act makes it clear-that its objects were : ( 1) to preserve the residential and tenanted build-ings existing at the date of it~ enactment, (2) for that purpose, to set up special agency, the Bombay Buildings Repairs and Re-G construction Board, whose duties and functions. would be, (a) to undertake and carry out structural repairs to buildings in respect of which the impugned tax is levied, (b) to provide temporary or alternative accommodation to occupiers of any such buildings where any such building collapses, ( c) to undertake and carry out tenantable repairs to buildings placed at its disposal, ( d) to move the Government to acquire old and dilapidited buildings in respect

(I) [1963] J S.C.R. 809.

(2) Willis, Constitutional Law of the United States, 587. (4) [1970] 3 S.C.R. 282. ed.), vol. vol. I, 381, 382. 381, 382. (6) Ibid, 392.

(l) [1969] 3 S.C.R. 827.

(5) Cooley on Taxation (4th ed.), vol. vol. I, 381, 382. 381, 382.

of which the cess is levied and which are beyond repairs or buildings in which structural repairs have once been carried out but further repairs are not possible, ( e) to reconstruct new buildings, ( f) to set up transit camps for those dishoused on accuunt of collapses, fire, rain or tempest, and (g) to undertake demolition of dangerous buildings or portions thereof. These objects obviously were fixed upon as result of the earlier studies undertaken by the Govern-ment and the CoFporation and the recommendations made by members of the public in answer to the proposals published by Government in connection with collapses of residential buildings and the tragic consequences following them.To ensure implementation of these functions and duties, the Act provides the levy of tax on buildings and lands, save those exempted under s. 28, at rates of percentum of the rateable value of the propefties as laid down in the Schedule to the Act. Under s. 27 and the Schedule the properties are grouped into three cate-gories in respect of which varying percentage of the rateable value of the buildings is charged as basic levy and at higher rate where any such building is structurally repaired. The three cate-gories are fonnulated on two principles, the age of the buildings and the type of construction in vogue during the periods when they were constructed. These principles appear to have been adopted from the earlier studies made ·at the instance of the Government and the Corporation. The amount recovered under this levy is to he first credited to the Consolidated Fund of the State, and there-after to be transferred by suitable appropriation to the fund designated as the Bonibay Building Repairs and Reconstruction Fund. (s. 31). For providing initial expenditure of the Board, the Government and the Corporatiqn have been empowered to make advances. ( s. 48). The Act also provides that the Govern-ment may and the Corporation shall make an annual grant of Rs. 1,00,00,000/- each.

Two further provisions in. this connection need be noted. The first is s. 27 ( 4) under which an owner who is required to pay the ces~ pays only 10% of the rateable value of his building and is entitled to recover the balance from the tenant by. making corres-ponding increase in the rent payable by such tenant. Default by the tenant gives him the right to sue for eviction under s. 12 of the Bombay Rent Act, 1947, or, on intimation to the Municipal Com-missioner, for recovery thereof as arrears of tax due under the Bom!ly Municipal Corporation ~ct. The second is that during the hfe of the Act such an owner 1s not bound to keep the premises let to any occupier in good and tenantable repair and s. 23 of the Bombay Rent Act ii deemed to have been suspended and s. 108 .Cfi!) of the _Tra.nsfer of Property Act is to apply, which means that 1t 1s the obhgat10n of the tenant to keep the premises fo. tenantable

repairs. It is, however, true that s. 58, as amended by Act 6 of 1971, saves the power of the Commisisoner under the Bombay Municipal Corporation Act to require the owner to carry out repairs to such things as drains, water-closets, latrines etc., to pull down or repair dangerous structures and to prevent causes of danger by such structures, to stop nuisance caused by leaking roof or by ditch, tank etc: or by collection of water, and also saves his powers to enforce his orders to execute works, and the right of the occupier to execute any such work in the event of default by the owner. The section also saves the right in such an event of tenant to execute, such work required by the Commis-sioner under s. I 0-D of the ,Bombay Rent Act. This saving of the powers of the Commissi,oner, however, cannot be equated with the obligation to carry put tenantable repairs under s. 23 of the Bombay Rent Act or th~ right of the tenant to carry out such repairs in the case of the lan~lcrd's default and to reimburse him-self to the extent of two moqths' rent.

Such being the scheme and the objects of the Act, can it be said that the cess imposed thereunder is not for public purpose ? It may be that some of the existing buildings, by reason of their hav-ing been recently constructed' or their having been properly c~red for or structural repairs having been recently made therem, might not require repairs contemplated by the Act. Yet, their owners are required to pay the cess from out of which the Board would carry out structural repairs to buildings whose owners have been neglectful or even defaulters in carrying out the Municipal requi-sitions. Does it, however, follow from such result that the pur-pose of the Act is to confer bounty on such owners, ?.nd that there-fore. the purpose of the tax is to serve private and not public purpose, and therefore, violative of Art. 19 (I) ( f) ?

The rule, no doubt, is that taxes can be levied for public purposes and indirect and incidental benefits which may result to the public do not make public purpose, where the object is directly private. But the purpose of tax would not be regarded as private merely becaw;e some persons might receive more benefits from the use of its proceeds than others or is imposed for purpose other thail revenue, such as tarff duties for encour-agement of manufactures or licence fees with view to regulate particular trade or industry. Jaw, not only exempting from taxation the limited means of poor and afflicted persons but pro-viding public funds to ameliorate their conditions. is undoubtedly one for public purpose. clear example of such tax is the provision for hospitals and asylums where medical and other aid is given to the poor and the dependent free of any charge. tax in aid of private en"terprises would undoubtedly be regarded as

loading "the table of the few with bounty that the many may par-take ot the crumbs that fall therefrom", unless such an enterprise is one of such magnitude or promise that its prosperity constituteS substantial element. of public welfare or which renders it im-portant to national defence or other such national interest('). But the principle that funds raised by taxation carmot be expended for private use does not prevent the Legislature from lookmg at the ultimate rather than the immediate result of the expenditure, and incurring an expense or creating liability on tlie part of the public which it was under no constitutio_nal obligation to incur or create if the ultimate effect will be beneficial to the public. Upon this theory laws establishing minimum wage or limiting the hours of labour have been sustained. The fact that statute authorising an expenditure of public funds for public purpose may foster another enterprise which is not public one does not invalidate the statute if the purpose of the expenditure is legitimate because it is public. It will not be defeated merely because the execution of it involves payments to individuals. The test is not as to who receives the money but the character of the purpose for which it is to be expended('). What is to be borne in mind is the distinction between the purpose and the method of its imple-mentation. If.in the course of the latter some benefit incidentally reaches to particular person or persons, the former neither changes its character nor is it invalidated for that reason. For instance, when sudden or an overwhelming disaster strikes, such as flood or destructive fire, Legislature may legitimately authorise expenditure of public money to provide succour to the victims. Persons Jiving in the area may become helpless or destitute, irrespective of whether rich ·or poor, but it is public purpose to supply the sufferers with food, clothing and shelter in order to relieve the'ir immediate._ needs. Expenditure of public funds in such cases have been treated as necessary for the proper exercise of the police powers of the State ( [8]).It is common experience in the field of taxation that the incidence of tax falls upon class or upon individuals who derive no direct benefit from its expenditure or who are not responsible for the mischief to remedy which the tax is imposed. :Resides, in the present case the cess on collection has, in the first instance, to he credited to the State's Consolidated Fund and then under an appropriation duly made after deducting the cost of collection the balance is to be transferred to the Repairs and Reconstruction

(1) Cno/ey on Taxation. (4th ed.). vol. I. Ch. 4, Arts, 174 to 221; and Ainerican Jurisprudence vol. 51. paras 321 and 329.

(2) Ibid, para 330, at p. 381; and Carmichaelv. Sourthern Coal & Coke Co .. 81 Law. ed .. 1245.

(3) American Jurisprudence, Taxation, vol. 51. para 353, at 396.

fund. The doctrine of benefit!. cannot apply to such case, first-ly, because the cess goes directly to the Consolidated Fund in augmentation of that fund ,and not to specific fund, and secondly, because the legis)ature has the power to authorise ex-penditure out of the Cons~lidated Fund on any public purpose which it thinks necessary and proper(').

Both the purpose of the' cess and its use are without doubt for public purpose. The purpose is to prevent collapses and the suffering ·they must cause including rendering several persons homeless, condition accentuated by the demand for accommo-dation outrunning the supply. The U$e is for preservation and prolonging the life of the buildings existing at the date of the en-actment of the Act by cariying out structural repairs where owners due to diverse reasons refuse or are reluctant to spend their capital on such preservation, jeopardising the life of their properties and due to the peculiar conditions in the property market find it profitable to render buildings into vacant plots. If in implementing the purpose, which, as aforesaid, is demonstrat-ably public, some benefit reaches particular individuals, the statute, which .does not directly purport so to do, cannot be m-validated.

Ch. IV of the Act deals with the levy of the cess and the buildings subjected to its imposition. Though s. 27 imposes the tax on buildings and lands, .the exemptions given to buildings ex-clusively occupied by the owners, to buildings exclusively used for non-residential purpose, to residential buildings exclusively occupie:i on leave and licence, to open lands not build upon and to buildings which might be erected after the date on which the Act comes into force, have the effect of confining the tax to residential houses occupied by tenants existing at the date of the ' commencement of the Act. Sec. 29 divides the buildings so taxed into categories A, and C. Buildings built prior to September I. 1940 fall into category A. those build between September I, 1940 and December 31, 1950 fall into category and those built between Janury I, 1951 and the date immediately before the date on which the Act was brought into force fall into category C. Under the Schedule. cate~ory buildings are charged at ~he rate of 25% .of the rate~ble value and at 4% if any building m that category 1s structurally repaired by the Board. If build-ing falls in category B. it is charged at 20% and at 30% if it is structurally repaired. and buildings falling in category have to bear the tax at 15 '1c . and at 20% if any one of them is structu-rally repaired by the Board. The Act thus makes three kinds

(1) Carn1ichael v. Southern Coal·& Cilke Co .. 81 L:\w Ed.1245 at p.p 1261 and 1265.

of classification, ( 1) by confining the tax to the residential t~nant.ed buildings it classifies buildings which are used for res1denlial purpose ~nd are tenanted, from the rest; (2) by confining .the tax to such existing buildings it classifies them from those built .a~ter the date on which the Act is brought into for~, and ( 3) by d1v1d-ing those which are liable to tax into three categories according to the three periods in which they were comtructed.

To such classification, the challenge, fustly, was that there wa• no rationale in dividing the residential and the non-residential buildings as number of buildings falling in both the groups had been found to be in imminent dangerous condition, and posed the problem of danger to human lives and of collapse. It was said, therfeore, that both the kind~ ought to have been subject to t.he provisions of the Act. The second challenge w~s tc the equahty of the percentum of the rate to buildin_ga falling in ~ny one of the three categories without regard to their actual physical conditions. Counsel sought to work out several permutations and combina-tions to show that such equal treatment to buildings in ~ach one of the three categories created inequality by n1ason of disregard to their unequal conditions. Thus, building built in 1900 was trettted equal with one built in 1939 and both bore the tax at the same rate. Similarly, building totally neglected by the owner, and therefore, needing structural repairs was tieated on equal ·footing with another in the same category, but on which the owner has reo~ntly carried out full structural repairs and was therefore in a. sounder condition than the former. There was. according to counsel, inequality writ large in secs. 27 and 2S, and the Schedule to ihe Act. The third attack was on the exemptions, the ground of attack being that some of them had no foui!dation in p~inciple and were totally arbitrary. Reliance was placed in this connec-tion on some of the decisions of this Court to show that discrimi-nnt.ion res~lts. where class.ification among equals ·is based on no ratmnal Pnnc1p]~ and which has no reasonab!e nexus with the object ~it~ "'.hie~ the i!llpugned legislation i~ ~nacted. Similarly, such d1scnmmat1on arises where there is no clas•ification even though th~ objects which are 5ubjected to tax are llnequal and yet treated ahke. [sec K. T. Moopi/ Nair v. Kera/a('). State of Madras v. R. Nand Lal & Co.(') and Andhra Prade'h v Naf/a Raja Reddy(')]. Co•msel for the respondents, on the ~the~ hand. urged that those decisions had no application to the present Act as the classifications made and the exemptions provided thereunder w7re ba~ on prinfr:1les which had intimate reiation to the objects with which the Act was passed and the evil ii sou,~ht to avert.

(I) [1961] 3 SCR 77.

(2) [1967] J S.CR. 645.

(J) [1967} 3 S.C.R. 28.

From what has been earlier stated, it is manifest that com-bination of factors, such as geographical limitatious on living space in the city, the consequent limited number of buildings, the fact of large number of them having been constructed as early as 1905 and even before, the fact of many of them having had to be built vertically and that too on timber frames, the effect of JI freezing of rents together with obligations imposed on the owners by the Rent Act rendering the maintenance of buildings econo-mically unattractive. reluctance and sometimes inability of the owners to carry out repairs and even to comply with Municipal requisitions, the alarming spurt in the city's population, immigra-tion of labour in large numbers from lhe hinterland, increasing pressure on the existing rer·idential prymises and on 'anitary facili-ties therein, house collapses in large numbers every year entailing hurnan tragedy and rendhing hundreds homeless, had raised problems which were of imminent concern to the State as well as the Municipal authorites; In these circumstances. if the legis-lature took policy decision to give priority to the residential tenant premises1in respect of which, in its opinion, the danger was graver and more imminent, no challenge to the division between residential and non-residential premises can be sustainable narti-cularly when dealing with part of the problem and confining its treatment to residential premises only was considered feasible. From the studies undertaken by the Government and the Corpo-ration earlier referred to, it appears that there were two alterna-E tives: the first was reconstruction of large ~cctions of the city and replacing new buildings in place of the old, and the second was the preservation and prolonging the life of the exi~ting structures by carrying out structural reoairs and alterations there-in. The first obviouslv would have raised numerous probtems, legal and economic. The. second would create Je~ser number of thrm. If the Legislature thought it best in the circumstances to choose the second instead of the first and conf.ned its attention to the existing structures no challeng.~ OR the ground of discrimi-nation or arbitrariness can legitimately be made. The classifica-tion of residential premises from the rest and that between those exi~ting at the time when 1[the Act was brought into force from ]the new ones which miltlit be built thereafter can be regarded as ba~ed on. i~~elligib!e differen~ia and related to the objectives and their feas1b1hty which the legislature had in mind while undertak-ing the que5tioned legislation.

Th7 division of ~uch ex_isting structures rnto three categories

was ev1d~tly made m the hght of the survey of buildings by the Corporat10n and the report of Bedekar Committee and the classi-fi~ation of buildi~gs i:nade 'ther~in on the basis cf age and - the kIOd of construction IO vo,gue IO the respective periods in which

they were erected. That being so, it is imj)m;'.iible to s~y that the aforesaid groupings of buildings was unpnnc1pled, whimsical or arbitrary.

But ·as Mr. Sorabji was at pains to point out, there might be buildings requiring structural repairs while there might be some in the same category which might not require them for the reason that they had been consistently looked after by their owners, and yet the latter are made to pay the tax and that 100 to the ;ame degree .. To that the answer is 1wofold. p;~tly, tha.t the. tax payable is on the rateable value of each building which differs from building to building, and secondly, it is distributed be.tween owners and the tenants, the former bearing 10 '/(, of it only. To make such distribution reasonable and just, the Legislature sus-pended during the life of the Act some of the obligations of the owners under the Rent Act and revived the obligations of the twants under s. 108 ( m) of the Transfer of Property Act, though retaining the powers of the Corporation obviously on the overrid-ing consideration of public health. It is true that even so, some of :he owners, whose buildings do not need structural repairs, have to pay the tax, the proceeds of which would be "pent for carrying out repairs to buildings whose landlords have be~n neglectful. The argument, in other words, is reduced to this, namely, that there would be one class of tax-payer who would not get the return and individual benefit while the other would get it at the expense of the former. Such an argument, however, can be urged almost against every tax and every public expendi-ture and_ i;io tax can ever escape such censure. The grievance that md1v1dual tax-payers get more or less return from the tax proceeds has hardly ever been entertained and would not be sust;,inable ground for challenge against its constitutional vali-dity. The decision in Railroad Rerirement Board v. Alton Rail-road Co., ([1]) leaned .heavily by counsel. disapproving provi-sion establishing compulsory bonus system of employees on all carriers treating them all as single employer. on the ground that it imposed upon solvent carriers the burden of furnishing money necessary to meet the demands of the system upon insolvent carriers, cannot apply as the decision turned on due process clause, clause not available in our Constitution.

The levy of the cess under s. 27 of the Act is not based on the principle of quid pro quo. Its object is not to repair all resic.lential !'remises. but to nreserve and prnlong their Jives in order to avert the dilema caused by the acute shortage of residen-tial accommodation on the one hand, and th~ reluctance and/or i~_ability of the owners to ca~ry out repairs resulting from the

Rent Act, on the other, and to establish an agency so that struc-tural repairs to buildings in dangerous or ruinous conditions· can be carried out. The finances for these objects are provided from fund from the impugned cess and contributions by the State and the Corporation.

The contention that some of the buildings falling in catego-ries and would not ,need structural repairs throughout the life of the Act or that su~h repairs would be carried out in build-ings not cared for by defaulting landlords, takes no notice of the fact that the primary object of the Act is no\ to· repair all buildings subject to cess but to prevent the annually recurrent mischief of house collapses and the ;human tragedy and deprivations they cause. The cess being thus levied to prevent such disasters, there is no question of unequal treatment between one class of owners and another. The classification of buildings into three categories is based, as already stated, on their age and the construction cur-rent during the periods of their erection. It is, therefore, based on an intelligible differentia and is closely related to the objects of the legislation. There is, therefore, no question of unequals being treated as equals, as each building in respect of which the cess is payable falls within the surveillance of the Board and has to be structurally repaired if the need were to arise. The princi-ple laid down in Moopit Nairs case(1) or in New Manek Chowk Spinning and Weaving Mills Co. Ltd. v. Municipal Corporation of the City of Ahmedabad(2) clearly does not apply to the present case.

The objection to the. exemptions under s. 28 can be met by the fact that buildings in each of- the grou!Js therein set out form distinct class by themselves. Buildings in cis. (a) to (f) are buildings to which the Rent Act does not apply, and therefore, the considerations for which the cess is levied do not apply to them. Buildings used for non-residential purnoses do not fall within the scope of the Act, and therefore, had to be excluded from the levy of the cess. Cls. (g), (h) and (j) read with the newly inserted cl. (ja) were, however, objected to. Buildings vesting in or leased to cooperative housing societies registered under the Maharashtra Cooperative Societies Act, 1960 form class by themselves and1 cannot be equated with buildings built by individuals. perusal of that Act is sufficient to satisfy that the relations between society and its members to whom apart-ments are either allotted or leased are not the same as those between landlords and \enants. There is, besides, considerable control of the Registrar,· Cooperative Societies, over the adminis-H tration of the funds of the societies and their ex.uenditure and an overall supervision over their affairs. The Bedekar Committee,

no doubt, sounded warning in respect of some of the buildings put up by some of such societies. But these are exceptions and the Legislature could not have carved out s•1b-clause in re~pect of them. The Committee, however, had ob;erved that these societies in the present staie of the property market were the only real instrumentalities through which an increase in the residential accommodation can at present be achieved, and therefore, should be encouraged. ·

Likewise, the relations betweert the owIIBrs and persons occu-pying their buildings under leave and licence cannot be equated with relations between landlords and tenants. The circumstances which led to the imposition of the cess do not apply to premises in the occupation of licensees because such licensees have no rights suc,h as the tenants have, namely, irremoveability and the freezing of rents, and the consequential reluctance or inability of the landlords to maintain their premises in tenantable · repairs. There is no such statutory control over compensation paid by them as there is in the case of standard rent. Considerations applicable to them are, therefore, quite different. The two dasses of occupiers, therefore, cannot be equated. The premises occupied by licensees thus form distinct class by themselves and could not have been lumped together with tenanted premises without the danger of challenge under Art. 14. So far as the building occupied by owners themselves and falling under cl. (h) are concerned, counsel frankly conceded that different considerations. would apply and therefore no objec-tion could be taken to their beirig exempted from the tax. If buildings used for non-residential purposes or on the basis of leave and licence are validly treated · differently, buildings. if used partly for one and partly for another such purpose or pur-poses can also be similarly treated provided that no part or parts thereof occupied or used !or purpose other than those specified in the three clauses. Since these buildings forming separate classes by themselves form the tenanted residential pre-mises, the provisions for exempting them cannot be held as viola-tive of the equal protection clause.

For the reasons stated above. the Act has to be held valid and the netitions unsustainable. Accordinglv. the petitions are dismissed but in the circumstances of the case there will not be any order of costs.

Petitions dismis.~ed.