Separate Classification In Favour Of Properties Of Religious Institutions For Rent Laws Not Violative Of Article 14: SC [Read Judgment]

The Supreme Court, while upholding the constitutional validity of the Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, observed that separate classification of properties of religious institutions for rent legislation will pass a challenge under Article 14 of the Constitution of India.

The bench of Justice NV Ramana, Justice Sanjiv Khanna and Justice Krishna Murari was considering the appeal [Harbhajan Singh vs. State of Punjab] filed against the Punjab and Haryana High Court judgment which had dismissed the contention that the Religious Premises Act creates an artificial distinction and discriminates against the tenants of "religious institutions", though "religious institutions" as landlords are not a separate class.

Taking note of the special procedure prescribed under the Religious Premises Act, the court also noted that there are a number of central and state legislation wherein religious institutions with or without other charitable organisations have been treated as a separate and distinct class and accorded legal treatment concomitant to such distinctiveness within the scope of the same enactment or other enactments. [Sections 11 and 115BBC, the Income Tax Act, 1961; Karnataka Rent Act, 1999 and Karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997; Orissa Hindu Religious Endowments Act, 1951; Himachal Pradesh Hindu Public Religious Institutions and Charitable Endowments Act, 1984 as amended in 2018; Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 and Goa, Daman and Diu Buildings (Lease, Rent and Eviction) Control Act, 1968, among others]

The Court noted the following observations made by the Supreme Court in State of Andhra Pradesh and Others v. Nallamilli Rami Reddi :That charitable or religious institutions or endowments fall into a separate category and form a class by themselves. If that is so, tenants coming under them also form a separate class. Therefore, they can be treated differently from other. 

Referring to S. Kandaswamy Chettiar v. State of Tamil Nadu, the bench said that the legislature is entitled and can make rational classification of buildings belonging to government and those belonging to religious, charitable, educational and other public institutions which are accorded different treatment on the well-founded assumption that such landlords are not expected to and would not indulge in rack renting or unreasonable eviction. In the said case, it was held that grant of exemption to buildings belonging to charities, religious or secular institutions, from rent control legislation, would not offend the equal protection clause of Article 14 of the Constitution as it is a reasonable classification based on intelligible differentia and also satisfies the test of nexus as such institutions not only serve public purpose but disbursement of their income is governed by the objects for which they are created.

The Court also noted the Constitution bench judgment in Ashoka Marketing Ltd. and Another v. Punjab National Bank, that  rejected the challenge to the vires of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 after recording that the property belonging to the government would fall under a separate class and that the government, while dealing with the citizens in respect of the property belonging to it, would not act for its own purpose as a private landlord but would act in public interest. While dismissing the appeal, it observed:

"What has been said about the Public Premises Act would be equally applicable to the legislations made by the State legislature of the State of Punjab in respect of the two enactments under consideration, that is, the East Punjab Rent Act and the Religious Premises Act. No doubt, in this decision it has been observed that the underlying reason for exclusion of property belonging to the government from the ambit of the Rent Control Act is that the government while dealing with the citizens in respect of property belonging to it would not act as a private landlord but would act in public interest, albeit this reasoning would equally apply to "religious institutions" as defined. The religious institutions as held are meant to carry out public purpose and the legislature can proceed accordingly that the religious institutions would act in public interest for which they were established."

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