Shivashankar Bhat, J.
1. Regular First Appeal is filed by the defendants. The respondent-plaintiff filed the suit for possession of the premises on the ground that the appellant before us was a tenant, whose tenancy has been determined, and consequently the landlord-plaintiff was entitled for possession of the premises. The monthly rent for the premises was Rs. 2,150/-. The premises was non-residential. In the circumstances, the plaintiff relied on Section 31 of the Karnataka Rent Control Act, 1961 (hereinafter referred to as 'the Act') to point out that Part-V of the Act was inapplicable and consequently, Civil Suit was maintainable against the tenant.
2. The Suit was initially filed on 1st September 1977. Consequent on the formation of the City Civil Courts in Bangalore City, the Suit was renumbered as O.S.No. 1838 of 1980. On 4th March 1986, the trial Court decreed the suit. Hence this Appeal. The Appeal was filed on 19th June 1986.
3. During the pendency of this Appeal, Section 31 of the Act was declared to be violative of Article 14 of the Constitution of India, and consequently there was a Writ issued against the State from enforcing the provisions of Section 31. The said Decision was rendered on 1st July 1986 (vide H. PADMANABHA RAO v. STATE OF KARNATAKA, : ILR1986KAR2480 ) The ratio of the said Decision and the ultimate order are as follows:
'Therefore, there can be last doubt that if in 1961 a person paying a rent of more than Rs. 500/- for a non-residential building belonged to economically stronger section, at present a person who requires a small non-residential building for even carrying a a petty business would be required to pay rental of more than Rs. 500/- for a premises whose rental value was Rs. 100/- or Rs. 150/- in 1961. The facts relating to the rentals paid by some of the petitioners originally and at present, extracted earlier clearly indicates that escalation in rents between 1961 and 1986. In view of non-variation of the classification in Section 31 of the Act, the very persons for whose benefit the Section was enacted in the year 1961 stand deprived of the said benefit. It is for this reason it can safely be said that though the original classification was made on a rational basis and it had nexus to the object sought to be achieved, by efflux of time, not only the classification has become unreasonable but it has also ceased to have, nexus to the object sought to be achieved, Applying the ratio in Rattan Arya's case (ILR 1986 KAR 2069) Section 31 of the Act is liable to be struck down on the ground that it is violative of Article 14 of the Constitution.
ii. In the result, we make the following order:
(i) Rule made absolute.
(ii) Section 31 of the Karnataka Rent Control Act is declared void as offending Article 14 of the Constitution.
(iii) A writ of Mandamus shall issue to the State not to enforce the provisions of Section 31 of the Act.
(iv) No costs.'
This Court relied mainly on the Decision of the Supreme Court in RATTAN ARYA v. STATE OF TAMIL NADU, ILR 1986 KAR 2069 wherein a similar provision in the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 was declared unconstitutional by the Supreme Court.
4. The ratio of the Decision of this Court in Padmanabha Rao's case is equally clear:- though when initially the Act was enacted in the year 1961, Section 31 of the Act was a valid provision, it became unconstitutional by efflux of time, having regard to the escalation in rents between 1961 and 1986, and therefore, a tenant paying monthly rent of Rs. 500A in the year 1986 cannot be treated differently from other tenants who were paying a rent of about Rs. 100/- in the year 1961.
5. The appellant before us contends that the decree obtained by the landlord cannot be enforced in view of the Decision of this Court in Padmanabha Rao's case. It was argued that the Appeal is nothing but the continuation of the suit and therefore the suit was not maintainable. Accordingly the Appeal of the defendant will have to be allowed by non-suiting the plaintiff.
6. In K. GANGASETTY AND ANR. v. MUNISWAMI, : ILR1991KAR3164 a Division Bench of this Court held that 'the decision striking down the provisions as contained in Section 31 of the Act is effective from the date it is rendered. Thus, from 1st July 1986, Section 31 of the Act has ceased to be operative. The appeal being continuation of the suit, the Appellate Court is required to take into consideration the change in law which affects the jurisdiction of the Court as well as the rights of the parties.' The said Appeal arose out of the suit filed in the year 1977. There was a decree for eviction of the tenants. This Court held that the said decree cannot be executed in view of striking down of Section 31 of the Act. For this, the Court relied on the Decision of the Supreme Court in H. SHIVA RAO AND ANR. v. CECILIA PEREIRA AND ORS., : AIR1987SC248 . Consequently, the Appeal was allowed and the plaintiff was non-suited. Being a Decision of a Division Bench of this Court, the said Decision binds us.
7. Mr. H.R. Venkataramanaiah, learned Counsel for the landlord, contended that Section 21 of the Act itself was not applicable to the present situation. Learned Counsel pointed out that the original tenant ceased to be a 'tenant' as defined in Section 3(r) of the Act. It was pointed out that on the determination of tenancy by the issuance of quit notice, the defendant ceased to be a tenant and the status of the defendant, at the most, could be described as 'tenant at sufferance'. On the date of filing of the Suit, Section 31 of the Act was valid and therefore Part-V of the Act was not applicable to the 'tenant' in question. If so, the defendant continued to be, only as 'tenant at sufferance' and this status cannot be altered into that of 'statutory tenant' immediately after striking down of Section 31 with effect from 1st July 1986. This is not a case where the law was declared as unconstitutional from its very inception. Section 31 was operative till 30th June 1986 and when that is so, even on the date when he approached this Court, he was not a 'tenant' as defined under the Act. In these circumstances, it is not possible to invoke Section 21 of the Act by the landlord to seek possession of the premises. Therefore, it was contended that striking down of Section 31 of the Act, should not come in the way of executing the decree obtained by the plaintiff.
8. The argument, no doubt, is quite attractive. But we need not pause to consider the said argument in view of the two Decisions of the Supreme Court, one, reported in : [1985]2SCR202 and the other : AIR1987SC248 .
9. In Lakshmi Narayana Guin's case, there was a decree for eviction passed by the Civil Court and before the same could be executed, West Bengal Tenancy Act was extended to the area in question. In view of this extension of the statutory protection to the tenants of the area, it was held by the Supreme Court that the decree cannot be executed. The opening sentence of Section 13(1) of the West Bengal Tenancy Act is almost similar to Section 21 of the Karnataka Rent Control Act. If the determination of the tenancy under the ordinary law resulted in the creation of status of a 'tenant at sufferance' and that status would not enlarge into that of a 'statutory tenant', so as to attract the provisions of the Rent Control Act, the Decision of the Supreme Court in Lakshminarayan Guin's case also would have been different. It would have been held that Section 13 of the West Bengal Tenancy Act was not attracted to the facts of the said case.
10. The facts are almost similar as above in Shiva Rao's case also. This Decision was rendered by applying Section 21 of the Act. The Act was not applicable to the particular locality and therefore, the landlord obtained a decree for eviction by filing a Civil suit. Subsequently, the Act was extended to the locality. It was held by the Supreme Court that the decree obtained by the landlord cannot be executed in view of Section 21(1) of the Act. In other words, it is implicit in these two Decisions that the 'tenant at sufferance' also would be protected by the application of Section 21(1) of the Act, and a decree for eviction against such person would become unenforceable.
11. Obviously in anticipation of this situation, the landlord filed a Writ Petition which is also before us. The landlord has challenged the validity of Section 21(1)(h) of the Act in so far as it is applicable to the non-residential buildings. It was contended on behalf of the landlord that after striking down of Section 31, the provisions of Section 21(1)(h) of the Act would govern all the classes of tenants and landlords, irrespective of their financial status. It was contended that even a rich tenant, who does not require any statutory protection, is also protected along with other tenants who may deserve protection. It was further contended that there is a difference between the tenants who belong to the weaker section of the society and the tenants who belong to the upper class of the society. This difference has not been taken note of by Section 21(1)(h) of the Act. Since law has failed to make a difference and when there is actually such a difference, the law would be violative of Article 14 of the Constitution.
12. The proposition advanced by Mr. Venkataramanaiah is based on the problem of over-inclusion in the classification. The learned Counsel referred to several Decisions of the Supreme Court in support of the proposition.
13. In FEDERATION OF HOTEL & RESTAURANT v. UNION OF INDIA, the Supreme Court upheld the classification of Hotels and Restaurants under the Expenditure Tax Act. A Hotel where a unit of residential accommodation is priced at over Rs. 400/- per day per individual was treated differently by levying tax under the said Act. The Supreme Court pointed out that in the legislative wisdom, such individual who occupied a unit of accommodation at a price of Rs. 400/- per day is considered a class apart by virtue of the economic superiority, and this legislative assumption cannot be condemned as irrational. The contention of the learned Counsel is that such a classification should have been made by the State Legislature by enacting Section 21(1)(h) of the Act, so that, those, who belong to a stronger class by virtue of their economic superiority though belong to broader class of tenants, need not be protected.
14. In DELHI CLOTH AND GENERAL MILLS LTD v. PARAMJIT SINGH, : AIR1990SC2286 the Supreme Court was considering the validity of the Jammu and Kashmir Houses and Shops Rent Control Act. Protection was not extended to a tenant where the income of the tenant exceeded Rs. 40,000/- per annum. This was under challenge. The exclusion of the tenant having an annual income of Rs. 40,000/- was upheld by the Supreme Court. The ratio is stated thus:
'The object of the enactment in question is undoubtedly to protect the weaker section of tenants from unreasonable eviction and unfair rent. The legislature, at the same time, did not desire to discourage persons from constructing buildings. The twin legislative object is the protection of economically weaker tenants and encouragement of construction of buildings. While protection is thus afforded to deserving tenants, construction of new buildings is encouraged by exempting buildings occupied by richer classes of tenants from the provisions of the Act. While a building is covered by the Act when occupied by a tenant whose annual net income is less than the specified amount, the protection is withheld when the same building is occupied by a richer tenant whose annual net income is higher than the specified amount. Where a building is occupied by more than one tenant, the applicability of the Act to each of them would depend upon his net income. It is the tenant that the legislature intends to protect and not the landlord or his building. The test adopted by the legislature for this purpose is with reference to the tenant's net income, whether accruing inside or outside the State, as on the date of the landlord's application for eviction as well as on the date of the decree for eviction. The legislative object is, therefore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of accommodation, employment opportunity and economic prosperity. This is a reasonable classification which does not suffer from the vice of being too vague or broad. Classification based on income is well known to law.'
Therefore, according to the learned Counsel for the plaintiff, exclusion based on income of the tenant should have been made by excluding the economically superior tenant from the purview of the protection supported by Section 21(1)(h), especially when they are tenants of non-residential premises. The Decision is PREM CHAND SOM-CHAND SHAH AND ANR. v. UNION OF INDIA AND ANR., : 1991ECR657(SC) was also cited wherein at paragraph 8, the Supreme Court observed thus:
'As regards the right to equality guaranteed under Article 14 the position is well settled that the said right ensures equality amongst equals and its aim is to protect persons similarly placed against discriminatory treatment, it means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Conversely discrimination may result if persons dissimilarly situate are treated equally. Even amongst persons similarly situate differential treatment would be permissible between one class and the other. In that event it is necessary that the differential treatment should be founded on an intelligible differentia which distinguished persons or things that are grouped together from others left out of the group and that differentia must have a rational relation to the object sought to be achieved by the statute in question.
15. In the instant case, the Legislature had originally made classification based on the rental value of the non-residential buildings. Under Section 21 of the Act, non-residential building, the monthly rent of which exceeds Rs. 500/- was excluded from the purview of Part V. However, the exclusion was struck down by this Court on 1st July 1986. The discrimination alleged by the petitioners, therefore, arose only after 1st July 1986 when Section 21(1)(h) was, by necessary implication, extended to all the tenants. There can be no doubt that all the tenants, only because they are in occupation of buildings by paying rents, cannot be treated as belonging to the weaker section of the Society. But, the question is, whether this Court should strike down Section 21 (1 )(h) of the Act only on the ground that the Legislature has not enacted any remedial measure after Section 31 of the Act was declared unconstitutional.
16. The problem of over-inclusion was referred by the Supreme Court in STATE OF GUJARAT v. SHRI AMBIKA MILLS, : [1974]3SCR760 . The Supreme Court observed thus:
'A classification is over-inclusive when it includes not only those who are similarly situated with respect to the purpose but others who are not so situated as well. In other words, this type of classification imposes a burden upon a wider range of individuals than are included in the class of those attended with mischief at which the law aims.'
At page 1314, it was pointed out, 'the problem of legislative classification is a perennial one, admitting of no doctrinaire definition. Evils in the same field may be of different dimensions and proportions requiring different remedies.
The Supreme Court further observed that -
'Once an objective is decided to be within legislative competence, however, the working out of classifications has been only infrequently impeded by judicial negatives. The Court's attitude cannot be that the State either has to regulate all businesses, or even all related businesses, and in the same way, or not economic evil could not be hindered by the necessity of carrying in its wake a train of vexatious, troublesome and expensive regulations covering the whole range of connected or similar enterprises.'
The problem is again highlighted in the following words:
'The question whether, under Article 14, a classification is reasonable or unreasonable must, in the ultimate analysis depend upon the judicial approach to the problem. The great divide in this area lies in the difference between emphasizing the actualities or the abstractions of legislation. The more complicated society becomes, the greater the diversity of its problems and the more does legislation direct itself to the diversities.'
Further it is observed:
'That the legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry, that exact wisdom and nice adoption of remedies cannot be required, that judgment is largely a prophecy based on meagre and uninterpreted experience, should stand as reminder that in this area the Court does not take the equal protection requirement in a pedagogic manner.'
17. There can be no doubt that quite a large section of the tenants require some kind of protection against arbitrary evictions. It is quite possible that the Legislature may classify the tenants depending upon their income or depending upon the rents payable in respect of the premises. But that does not mean that as and when Legislature fails to make a classification, the Court should strike down the law. This is not a case where this Court could strike down a part of the law so that the rest can be made operative. If this Court strikes down Section 21 (1)(h) on the ground of arbitrariness alleged by the petitioner, large sections of Society certainly would suffer. The intention of Legislature is to give protection to the said section of the Society. In the process, it is likely that another section of the same class also may get protection. This is a matter for the Legislature primarily to consider and provide remedial measure, so that only deserving sections of the people would get the protection, of the law.
18. It cannot be said that, application of the provisions of the Act to all classes of tenants, by itself would be arbitrary. In Ratan Arya's Case, Supreme Court was considering the validity of a provision of Tamilnadu Buildings (Lease & Rent Control) Act, 1960. There, under the impugned, provision tenants of residential building fetching a rent over Rs. 400/- per month were classified into a distinct class for the purpose of depriving them of the benefit of the said Act, by excepting such buildings from the operation of the Act In the case of non-residential buildings, there was no such exception at all. In other words, irrespective of the rents payable by the tenants of a non-residential building, the benefits of the Act were available to the tenants. The exception made in respect of tenants of residential buildings paying a monthly rent in excess of Rs. 400/- was struck down by the Supreme Court for two reasons. At page 1446, the Supreme Court observed:
'Thus we see so far, that the scheme and structure, the policy and the plan of the Act, as perceivable from these provisions, are unmistakably aimed at regulating the conditions of tenancy, controlling the rents and preventing unreasonable eviction of tenants of all residential and non-residential buildings. For the advancement of these objects, tenants are invested with certain rights and landlords are subjected to certain obligations. These rights and obligations, for example, the right of a tenant not to be evicted and the prohibition against a landlord from seeking eviction except upon specified grounds, the right of a tenant not to pay rent in excess of the fair rent and the obligation of a landlord not to demand such excess rent, the right of a tenant to obtain a receipt for the actual amount of rent and advance paid by him and the right of a tenant to enjoy and the obligation of a landlord not to interfere with the enjoyment of the amenities previously enjoyed by the tenant, are rights and obligations which, in any modern civilised society, attach themselves to tenants and landlords of all buildings, residential or non-residential, low-rent or high-rent. They are not rights which are peculiarly capable of enjoyment by occupants of non-residential buildings only as against occupants of low-rent buildings. None of the main provisions of the Act, to which we have referred, make any serious distinction between residential and non-residential buildings. We may now turn to Section 30(ii) which reads as follows:
'Nothing contained in this Act shall apply to any residential building or part thereof occupied by anyone tenant if the monthly rent paid by him in respect of that building or part exceeds four hundred rupees.' By one stroke, this provision denies the benefits conferred by the Act generally on all tenants to tenants of residential buildings fetching a rent in excess of four hundred rupees. As a result of this provision, while the tenant of a non-residential building is protected, whether the rent is Rs. 50/-, Rs. 500/-, Rs. 5,000/- per month, a tenant of a residential building is protected if the rent is Rs. 50/-, but not if it is Rs. 500/- or Rs. 5,000/- per month. Does it mean that the tenant of a residential building paying a rent of Rs. 500/- is better able to protect himself than the tenant of a non-residential building paying a rent of Rs. 5000/- per month? Does it mean that the tenant of a residential building who pays a rent of Rs. 500/- per month is not in need of any statutory protection? Is there any basis for the distinction between the tenant of a residential building and the tenant of a non-residential building and that based on the rent paid by the respective tenants? Is there any justification at all for picking out the class of tenants of residential buildings paying a rent of more than four hundred rupees per month to deny them the rights conferred generally on all tenants of buildings residential or non-residential by the Act? Neither from the Preamble of the Act has it been possible for us even to discern any basis for the classification made by Section 30(ii) of the Act.'
Again at para 4, the Supreme Court observed:
'To say that a non-residential building is different from a residential building is merely to say what is self-evident and means nothing. Tenants of both kinds of buildings equally need the protection of the beneficient provisions of the Act. No attempt has been made to show that the tenants of non-residential buildings are in a disadvantageous position as compared with tenants of residential buildings and, therefore, they need greater protection.'
The second reason is found in page 1448, thus:
'We must also observe here that whatever justification there may have been in 1973 when Section 30(ii) was amended imposing a ceiling of Rs. 400/- on rent payable by tenants of residential buildings to entitle them to seek the protection of the Act, the passage of time has made the ceiling utterly unreal. We are entitled to take judicial notice of the enormous multifold increase of rents throughout the Country, particularly in urban areas. It is common knowledge to-day that the accommodation which one could have possibly got for Rs. 400/- per month in 1973 will today cost at least five times more. In these days of universal day to day escalation of rentals any ceiling such as that imposed by Section 30(ii) in 1973 can only be considered to be totally artificial and irrelevant today.'
Therefore, 'a provision which was perfectly valid at the commencement of the Act could be challenged later on ground of unconstitutionally and struck down on that basis.'
Thus, Section 30(ii) of the Tamilnadu Act was struck down because -
(i) there was no justification to deny the protection to tenants of residential buildings paying a rent of Rs. 400/-; as also
(ii) the enormous escalation in the rents in the Country, rendered the figure of Rs. 400/- irrelevant, as a basis for classification.
Both the reasons are independent of each other. The first reasoning indicates that for the purpose of protecting the tenants as a class, having regard to the object of the scheme of the said Act, making of any classification amongst the tenants may not be valid,
19. In Padmanabha Rao's case, this Court did not apply the first reasoning of the Supreme Court in Rattan Arya's case, though a part of the relevant passage from the Supreme Court Decision was quoted, in these circumstances, it is not possible for us to hold that, as a matter of principle, the State is bound to make a distinction to deny the beneficial provisions of the Act to a class of tenants considered to be economically superior to others. Basically it is for the Legislature to consider whether such a distinction should be made (as has been done in Jammu and Kashmir - vide : AIR1990SC2286 ). We cannot nullify the beneficial provisions of Section 21(1)(h) of the Act, on the sole ground that it has a universal application, in the sense, it extends protection to the entire class of tenants, irrespective of their financial status.
20. The learned Government Advocate submitted that the State had contemplated to enact an appropriate provision to exempt, from the protective provisions of the Act, tenants paying higher rents; but the process of legislation could not be completed for some reason or other. It was also submitted that model rental table has been prepared by the Central Government and in these circumstances an appropriate legislation is likely to be enacted soon.
21. In these circumstances, we are of the view that it is not possible to accept the contention advanced by Sri H.R. Venkataramanaiah.
22. For the reasons stated above, Regular First Appeal No. 381 of 1986 is allowed; the Suit filed by the respondent is dismissed. The decree of the trial Court is accordingly set aside.
Writ Petition No. 3041 of 1992 also is dismissed. The parties are directed to bear their respective costs throughout.