Writ Petition No. 639 of 1996

18th July, 1996

Petitioner Counsel: Dr. D.Y.CHANDRACHUD with Mr. SHYAM MEHTA, M/s. UMESH SHETTY & CO.
Respondent Counsel: Mr. RANA with Mr. R.C. MASTER

Cases Cited:
AIR 1984 SC 866 [Para 2]
JT 1994(3) SC 474 [Para 2]
AIR 1989 SC 1642 [Para 9]
(1995) 5 SCC 482 [Para 9]
(1991) 1 SCC 212 [Para 9]
Appeal No.846 of 1990 dt.4-9-1990 [Para 10]
Writ Petition No.1655 of 1985 dt. 11-3-1994. [Para 10]

JUDGMENT

JUDGMENT : This petition under article 226 of the Constitution takes exception to the policy framed by the Ministry of Defence and seeks a mandatory direction to de-hire and/or release the petitioner's flat hired by the Defence in the year 1942. Briefly the facts are that in or about 1930 the petitioner's grandmother one Gulbai B. Banaji constructed a building by name "The Cliff" at Pochkhanwala Road, Worli, Mumbai, In 1939 World War II began and due to the war Government urgently required premises in Mumbai for the officers of the country's armed forces. On 10th August 1942, the Government hired the entire building through Gulbai under the Defence of India Rules, 1939. thereafter at the request of the then Defence Ministry, an agreement dated 12th February 1944 was entered into between the said Gulbai and the Governor-General-in-Council whereunder the building was hired by the Governor-General-in-Council for war purposes on a rent of Rs.775/- per month. It seems that after the war all the flats in the said building except flat No.3 which is the subject matter of the present petition, were released by the Government, even though there is no record as to exactly when the other flats were released. Before her death, Gulbai gifted flat No.3 to her only son Phiroz Banaji who happens to be the father of the petitioner. It seems that the petitioner's father sold the flat to one Meharbai Anklesaria. Sometime in 1984, the petitioner re-purchased the flat from the said Anklesaria. It is common ground that the petitioner as well as his predecessors-in-title made several representations to the Ministry of Defence for de-hiring the flat. However, the representations were turned down by the authorities on the ground that there is paucity of accommodation for the defence officers in Mumbai. It was also stated in the reply by the authorities that the Defence Ministry has formulated a de-hiring policy and since as per the policy only 10% flats of the new accommodation acquired by the authorities are to be de-hired, petitioner's request for de-hiring cannot be acceded. Aggrieved by this. the petitioner has filed the present petition.

2. It is the case of the petitioner that the flat in question was hired for war purposes in the year 1942 i.e. during World War II, which is long over. Hence the purpose for which the said flat was hired is non-existent and is in fact not existing since the year 1945. It is the grievance of the petitioner that despite this, even after fifty four years the defence authorities are refusing to de-hire the flat. It is contended that Government cannot retain possession of premises for an unreasonably long period of time. It is also contended that it is bounden duty of the Government to de-hire the flat since such hiring cannot be continued indefinitely. In support of these contentions heavy reliance is placed on the judgment of the Supreme Court in H.D.Vora Vs. State of Maharashtra reported in AIR 1984 SC 866 and Grahak Sanstha Manch Vs. State of Maharashtra reported in JT 1994(3) SC 474. It is contended that the continuance of hiring of the flat after 30 years is clearly unreasonable and unfair. It is also contended that the policy formulated for de-hiring of the flats is arbitrary and unreasonable. It is pointed out in that behalf that till today only 66 flats have been de-hired and the petitioners's flat which is at serial No.183 in the list prepared by the Defence Ministry is not likely to be de-hired for a long time. It is also alleged that the respondents are not strictly adhering to their policy and that they are de-hiring the flats out of turn. It is alleged that the respondents have released the flats in "Marlow" building out of turn in violation of their own policy.

3. In contesting the petition, the respondents have filed counter affidavit of Mr. R.P. Singh. Defence Estate Officer. It is averred by the respondents that the petitioner cannot claim de-hiring of the flat as a matter of right as the premises are governed by the Bombay Rent Act. It is contended that the relationship between the parties is that of the landlord and the tenant and as such a writ petition under article 226 is not maintainable. It is pointed out that this position was accepted by the parties. In that connection, reference is made to the standard rent application filed by the petitioner's father in the year 1966 in Small Causes Court, Mumbai. It is also stated that the administration policy regarding hiring and de-hiring is meant for internal consumption of the Department and the same is not at all designed to confer any right on the owners of the property. It is stated that the policy is framed to provide broad parameters for guidance of the employees of the respondents dealing with the de-hiring of the property. It is pointed out that according to the policy 10% of the houses inducted into service by new construction or new hiring became available in the seniority list prepared by the Ministry of Defence in a chronological order. It is denied by the respondents that flats were de-hired out of turn. It is pointed out that only in few exceptional cases priority was given to certain property owners. It is also pointed out that flats in "Marlow" building were hired on 1st October 1941 and stood at serial Nos. 49 to 59 in the seniority list and were de-hired by various deeds according to de-hiring policy.

4. Considering the rival submissions the main question which falls for my consideration is whether the decisions of the Supreme Court in H.D.Vora and Grahak Sanstha Manch (supra) are applicable to the premises hired by the Defence under the Defense of India rules. In H.D.Vora's case, the Supreme court was dealing with an order of requisition under the Bombay Land Requisition Act. It was held by the Supreme Court that the two concepts, one of requisition and other of acquisition are totally distinct and independent. Acquisition means the acquiring of the entire title of the expropriated owner whatever the nature and extent of that title may be. But it was pointed out that the concept of requisition involves merely taking of domain or control over property without acquiring rights of ownership and must by its very nature be of temporary duration. Bhagwati J., as he then was, speaking for the Bench observed -

" Thus, the Government cannot under the guise of requisition continued for an indefinite period of time in substance acquire the property, because that would be a fraud on the power conferred on the government. If 'the government wants to take over the property for an indefinite period of time, the government must acquire the property, but it cannot use the power of requisition for achieving that object. The power of requisition is exercisable by the government only for a public purpose which is of a transitory character. If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and in such a case the order of requisition, if passed. would be a fraud upon the statute, for the government would be requisitioning the premises when really speaking they want the premises for acquisition, the object of taking the premises being not transitory but permanent in character. Where the purpose for which the premises are required is of such a character that from the very inception it can never be served by requisitioning the premises but can be achieved only by acquiring the property which would be the case where the purpose is of a permanent character or likely to subsist for an indefinite period of time, the government may acquire the premises but it certainly cannot requisition the premises and continue the requisitioning indefinitely."

5. Coming then to the decision of the Supreme Court in Grahak Sanstha Manch, it is seen that the Constitutional bench of the Supreme Court affirmed the law laid down in H.D.Vora's case although the observation in H.D.Vora's case that the requisition order cannot be made for a permanent purpose was not approved by the Constitutional bench. It was held that if the requisition is continued for more than 30 years it will be normally held to be unreasonable. The Constitutional Bench observed in para 17 of the Judgment as follows :

" For the aforesaid reasons, we hold that the decision in H.D. Vora's case does not require reconsideration. We, however, do not approve the observations therein that requisition orders under the said Act cannot be made for a permanent purpose. We make it clear that the said decision does not lay down, as has been argued, a period of 30 years as the outer limit for which a requisition order may continue. The period of 30 years was mentioned in the decision only in the context of the date of the requisition order there concerned. An order of requisition can continue for a reasonable period of time and it was held, as we hold, that the continuance of an order of requisition for as long as 30 years was unreasonable."

6. Now turning to the case in hand, it is necessary to bear in mind that we are not dealing with an order of requisition but hiring of the premises under the Defence of India rules. The concept of requisition is different from compulsory hiring or letting. In fact, this distinction is recognised by the Constitutional Bench in Grahak Sanstha Manch's case to which I shall advert a little later. But first it will be necessary to make a brief reference to the relevant provisions of Defence of India Act and the Rules. The Defence of India Act, 1939 was enacted to provide for special measures to ensure the public safety and interest and the defence of British India and for trial of certain offences. Section 2(1) of the Act conferred powers on the then central Government to make such rules as appear to it to be necessary or expedient for securing the defence of British India, the public safety, the maintenance of public order or the efficient prosecution of war or for maintaining supplies and services essential to the life of the community. Sub-section (2) of Section 2 provided that without prejudice to the generality of the powers conferred by sub-section (1) the rules may provide for matters enumerated in clauses (i) to (xxxv) of sub-section (2). Clause (xxiv) refers to the requisitioning of property, and clause (xx) deals with control of industry for various purposes mentioned in that clause. As far as the Defence of India Rules framed under Section 2 of the Act are concerned, it is seen that Rule 75A deals with the Government's power of requisition and Rule 75A empowered the Government to requisition the premises if in the opinion of the Central Government or the Provincial Government it was necessary and expedient to do so for the various purposes mentioned in rule 75A. Then rule 81 provided for power of the Government for regulating general control of industry and the relevant provision relating to control of rents is contained in clause (bb) of rule 81 which reads as follows :

" (bb) for regulating the letting and sub-letting of any accommodation or class of accommodation whether residential or non-residential, whether furnished or unfurnished and whether with or without board, and in particular -

(i) for controlling the rents for such accommodation either generally or when let to specified persons or classes of persons or in specified circumstances,

(ii) for preventing the eviction of tenants and sub-tenants from such accommodation in specified circumstances, and

(iii) for requiring such accommodation to be let for either generally or to specified persons or classes of persons or in specified circumstances."

Thus, rule 81 conferred power on the Government to regulate the letting and sub-letting of any accommodation or class or accommodation as well as control of the rents. The Government was empowered to require the landlord to let the accommodation to specified persons or classes of persons generally. It is under the power conferred by rule 81 that the then Central Government hired the premises of the petitioner in 1942 for war purpose. it cannot be denied that there was element of compulsion in hiring the premises of the petitioner, but nevertheless it was a case of hiring or letting of the premises and not requisitioning of the premises.

7. We have noted that compulsory letting under rule 81 is not the same as requisitioning under rule 75-A. If the term 'requisition' has acquired any technical meaning during the two world-wars, it has been used in the sense of taking possession of property for the purpose of the State or for such purposes as may be specified in the statute authorising a public servant to take possession of private property for a specified purpose for a period in contra-distinction to acquisition of property by which title to the property gets transferred from the individual to the State or to a public body for whose benefit the property is acquired. In 'requisition' the property dealt with is not acquired by the State but is taken out of the control of the owner for the time being for certain specified purposes. Even for this limited purpose, however, the owner becomes entitled to compensation, because 'requisition' of the property amounts atleast to temporary deprivation of the property. Now reverting back to the judgment of the Supreme Court in Grahak Sanstha Manch, it is seen that it was argued before the Supreme Court that the provisions for requisition of premises under the Bombay Land Requisition Act were made to control rents. It was argued that since the said Act was made to cure the mischief of scarcity of accommodation, it could not be said to be a temporary measure. While dealing with this argument, the Supreme Court noted that when the Bombay Land Requisition Act was originally enacted, section 6(4)(b) of the Said Act, as originally enacted, empowered the Provincial Government, as it then was, to 'require the landlord to let the premises to specified persons or class or persons or in specified circumstances' (The provisions are in pari materia with sub-clause (i) of Clause (bb) of rule 81 of the Defence of Indian Rules.) The provisions of Section 6(4)(b) were, however, deleted from the Act. After noting this background, the Supreme Court observed in paragraph 15 as follows :

" The said Act as originally enacted, therefore, empowered the State Government to require landlords to let out premises. The provisions in that regard were deleted. It is, therefore, not possible to accept Ms. Jaisingh's submission that the said act as it stands is rent control legislation. That the said Act as originally enacted had contemplated both the requisitioning of premises and compulsory letting out thereof indicates the legislative intent that whereas letting out was intended to be a permanent arrangement, requisitioning was intended to be only a temporary arrangement."

(emphasis supplied )

8. The Supreme Court has thus clearly noted the distinction between compulsory letting and requisition. In the case of compulsory letting there is a creation of relationship of landlord and tenant even though the element of compulsion is inherent in such arrangement. On the other hand, in requisition the properties are taken out of the control of the owner for the time being for certain specified purposes, subject to payment of compensation. As pointed out by the Supreme Court, letting out is intended to be a permanent arrangement while requisition is intended to be only a temporary arrangement. Of course, the landlord has got a right to recover possession from the Government subject to the provisions of the rent legislation. In the present case the premises are governed by the Bombay Rent Act and, therefore, the landlord will be entitled to recover possession only on the grounds permissible under the said Act.

9. Dr. Chandrachud, learned counsel for the petitioner strenuously contended that the petitioner's flat was hired specifically for the purposes of war which ended in 1945 and after the war it is not permissible for the Government to retain the premises. The counsel urged that since the purpose of hiring has come to an end, it is the duty of the government to restore the flat to its original owner. The counsel further urged that the refusal of the Government to release the flat even after the war was over, is totally arbitrary and unreasonable. It was next argued by the counsel that where there is arbitrariness in State action, article 14 springs in and judicial review strikes such an action down. He brought to my notice the decision of the Supreme court in M/s. Dwarkadas Marfatia & Sons V. Board of Trustees, Bombay Port (AIR 1989 SC 1642) wherein the Supreme Court held that every action of the executive authority must be subject to rule of law and must be informed by reason and, therefore, whatever be the activity of the public authority, it should meet test of article 14. Dr. Chandrachud also brought to my notice the decision of the Supreme Court in LIC of India Vs. Consumer Education & Research Centre (1995) 5 SCC 482). The counsel pointed out that the Supreme Court has held in that case that State action in contractual field has to be just, fair and reasonable, in public interest and in consonance with the constitutional conscience and socio-economic justice. The counsel also placed heavy reliance on the decision of the Supreme court in Shrilekha Vidyarthi Vs. State of U.P. {(1991) 1 SCC 212}. He particularly brought to my notice the following observations of the Supreme Court :

" The requirement of Article 14 should extend even in the sphere of contractual matters for regulating the conduct of the state activity. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requireing regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts, which cannot co-exist. The Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideal in the Preamble. Therefore, total exclusion of Article 14 non-arbitrariness which is basic to rule of law from State actions in contractual field is not justified. This is more so when the modern trend is also to examine the unreasonableness of terms in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.

(A) Every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 and basic to the rule of law, the system which governs us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. Arbitrariness is anathema to State action in every sphere and wherever the vice percolates the court would not be impeded by technicalities to trace it and strike it down. This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India.

10. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a case. The scope of judicial review is limited to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. In Shrilekha's case, the Supreme Court clearly laid down that the wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. It is not for the Courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. It is no doubt true that the premises were originally hired for war purposes but the fact remains that by virtue of the said agreement, the relationship of landlord and tenant is created and if the State is entitled to claim protection of the Bombay Rent Act, it cannot be said that the State has acted arbitrarily or unreasonably. If the possession of the State Government is protected by the Bombay Rent Act, its refusal to de-hire the premises cannot be said to be violative of article 14. It is also pertinent to note that the Government has framed a policy for de-hiring of the premises. The policy adheres to the well known principles of seniority. I do not find any element of arbitrariness in the policy. Simply because the petitioner's number is not likely to reach in near future, the policy cannot be branded as unreasonable. The challenge to the policy has already been overruled by the Division Bench of Mrs. Sujata Manohar, J. (as she then was) and Sugla, J., in Appeal No. 846 of 1990 (B.S.Vinodama Vs. The Union of India & Anr.) decided on 4th September, 1990. Similar view is taken by the Division Bench of Pendse, J. (as he then was) and Patankar, J., in Writ Petition No. 1655 of 1985 (Nandkishor L. Mehta & anr. Vs. The Union of India & Ors.) decided on 11th March, 1994.

11. In view of the foregoing discussions, the petition fails and the same is dismissed. No order as to costs.

Petition dismissed.