Supreme Court Upholds Punjab Religious Premises Act: Tenants of Religious Institutions Not Entitled to Rent Act Protection (4 December 2019)

Introduction

Date of the Judgment: 4 December 2019

Citation: (2019) Civil Appeal No. 3674 of 2009

Judges: N. V. Ramana, J., Sanjiv Khanna, J., Krishna Murari, J.

Can tenants of properties owned by religious institutions be evicted under a separate law, bypassing the usual rent control protections? The Supreme Court of India, in this case, examined the constitutional validity of the Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997, which allows for the eviction of tenants from properties owned by religious institutions through a summary procedure. The core issue was whether this Act unfairly discriminates against tenants of religious institutions by denying them the protections available under the East Punjab Urban Rent Restriction Act, 1949. The judgment was delivered by a three-judge bench consisting of Justices N.V. Ramana, Sanjiv Khanna, and Krishna Murari, with Justice Sanjiv Khanna authoring the opinion.

Case Background

The appellants were tenants occupying shops in Gurudwara Singh Sabha, located in Kukar Majra, Punjab. They claimed to have been inducted as tenants between 1965 and 1969 by the Gurudwara Singh Sabha, although no formal lease agreements were executed. The tenants stated they were small businessmen, primarily involved in the steel industry, with one operating a dhaba. In 1978, the Shiromani Gurdwara Parbandhak Committee (SGPC) took control of the Gurudwara’s affairs, and the tenants were directed to pay rent to the SGPC. The tenants alleged they paid rent to the SGPC or the manager of the Gurudwara, but receipts were not always issued regularly.

In 1997, the SGPC filed an eviction petition against one of the tenants, Harbhajan Singh, under Section 13 of the East Punjab Urban Rent Restriction Act, 1949, citing failure to pay rent and the need for the property to construct new shops. Harbhajan Singh deposited the arrears on the first hearing, but the eviction proceedings remained pending. Subsequently, the Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997, was enforced on January 29, 1998, introducing a summary procedure for evicting unauthorized occupants from religious institutions’ properties. Following this, the SGPC filed ejectment petitions against the appellants under the Religious Premises Act, claiming they were in unauthorized occupation. The appellants then filed writ petitions in the High Court challenging the validity of the Religious Premises Act, which were dismissed.

Timeline

Course of Proceedings

The appellants initially filed writ petitions before the High Court of Punjab and Haryana, challenging the constitutional validity of the Punjab Religious Premises Act. They argued that the Act unfairly discriminated against tenants of religious institutions by denying them the protections available under the East Punjab Urban Rent Restriction Act, 1949. The High Court dismissed these petitions, upholding the validity of the Religious Premises Act. The High Court reasoned that the Act was designed to protect the properties of religious institutions, which are prone to mismanagement, and that the Act provided a detailed procedure for eviction of unauthorized occupants. The High Court also noted that the Act does not treat tenants with a valid lease or grant as unauthorized occupants. Aggrieved by the High Court’s decision, the tenants appealed to the Supreme Court.

Legal Framework

The case involves several key legal provisions:

• The East Punjab Urban Rent Restriction Act, 1949: This Act was enacted to protect tenants from unfair eviction and excessive rent increases. It is a general law regulating the relationship between landlords and tenants.
• The Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997: This Act provides a summary procedure for the eviction of unauthorized occupants from properties belonging to religious institutions. It defines “unauthorized occupation” and outlines the process for eviction.
• The Transfer of Property Act, 1882: This is a general enactment regulating landlord and tenant relationships.

The Religious Premises Act defines key terms:

• Section 2(d): “Religious Institution” means any gurudwara, temple, church, mosque, temple of Jains or Budhas which is registered under the provisions of the Societies Registration Act, 1860 or is established under any statute and includes any other place of worship by whatever name, it may be called, which is registered as aforesaid or is established under any statute.
• Section 2(e): “Religious premises” means any land whether used for agricultural or non-agricultural purposes, or any building or part of a building belonging to a Religious Institution and includes, –
  • (i)the garden, grounds and out-houses, if any, appertaining to such building or part of a building; and
  • (ii)any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof;
• Section 3: “Unauthorised occupation of religious premises” For the purposes of this Act, a person shall be deemed to be in unauthorised occupation of any religious premises-
  • (a) where he has, whether before or after the commencement of this Act, entered into possession thereof otherwise than under and in pursuance of any allotment, lease or grant; or
  • (b) where he, being an allottee, lessee or grantee has, by reason of the determination or cancellation of his allotment, lease or grant in accordance with the terms in that behalf therein contained, ceased, whether before or after the commencement of this Act, to be entitled to occupy or hold such religious premises; or
  • (c) where any person authorised to occupy any religious premises has, whether before or after the commencement of this Act, –
    • (i) sub-let, in contravention of the terms of allotment, lease or grant, without the permission of the Religious Institution, the whole or any part of such religious premises; or
    • (ii) otherwise acted in contravention of any of the terms, express or implied, under which he is authorised to occupy such religious premises.

  Explanation: For the purpose of clause (a), a person shall not merely by reason of the fact that he has paid any rent be deemed to have entered into possession as allottee, lessee or grantee.

The Religious Premises Act allows religious institutions to apply to the Collector for eviction of unauthorized occupants (Section 4). The Collector, after issuing a show-cause notice and considering the evidence, can order eviction (Section 5). An appeal against the Collector’s order can be filed before the Commissioner (Section 8). The Act provides a special procedure for religious institutions to recover their properties from unauthorized occupants, differing from the general procedure under the East Punjab Rent Act.

Arguments

Appellants’ Arguments:

• The appellants contended that as tenants, they are entitled to protection against eviction under the East Punjab Urban Rent Restriction Act, 1949, and this protection cannot be withdrawn by the Religious Premises Act. They argued that the definition of “unauthorised occupants” under the Religious Premises Act, particularly the explanation to clause (a) of Section 3, is unjust. This definition deems tenants who have been paying rent for a long time as “unauthorised occupants” merely because their lease or grant has expired.
• The appellants submitted that the Religious Premises Act creates an artificial classification, discriminating against tenants of religious institutions by denying them the protections available to other tenants under the East Punjab Rent Act. They argued that there is no public purpose or objective in enacting the Religious Premises Act, and it serves as a means for religious institutions to increase their income.
• The appellants relied on the principle that the government, while dealing with its property, acts in public interest, whereas religious institutions do not form a separate class that warrants different treatment. They argued that the Religious Premises Act violates Article 14 of the Constitution by creating an artificial distinction and discriminating against tenants of religious institutions.

Respondents’ Arguments:

• The respondents, including the State of Punjab and the SGPC, contested the appellants’ submissions. They argued that the State legislature is entitled to enact the Religious Premises Act, even if the East Punjab Rent Act already exists. The respondents contended that the Religious Premises Act seeks to achieve a different objective, which is to protect the properties of religious institutions.
• The respondents argued that the Religious Premises Act is a special enactment concerning the administration of premises belonging to religious institutions and regulates their rights as landlords vis-à-vis the tenants. They emphasized that the Act aims to help religious institutions recover their properties from unauthorized occupants through a summary procedure.
• The respondents highlighted that the definition of “unauthorised occupation” under Section 3 of the Religious Premises Act is clear and not vague. They pointed out that the Act protects tenants with valid allotments, leases, or grants. The respondents argued that the explanation to Section 3, which states that payment of rent does not automatically make a person an authorized occupant, is necessary to prevent misuse of the Act.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997 is constitutionally valid.
2. Whether the Religious Premises Act creates an unreasonable classification by treating tenants of religious institutions differently from other tenants.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• State of Andhra Pradesh and Others v. Nallamilli Rami Reddi and Others [AIR 2001 SC 3616]*: Followed. The Court relied on this case to establish that religious institutions form a separate class and can be treated differently from other landlords.
• S. Kandaswamy Chettiar v. State of Tamil Nadu and Another [AIR 1985 SC 257]*: Followed. The Court used this case to support the idea that exemptions can be granted to religious institutions from rent control laws.
• P.J. Irani v. State of Madras [AIR 1961 SC 1731]*: Referred. The court referred to this case through S. Kandaswamy Chettiar (supra) to support the validity of the exemption notification.
• Christ the King Cathedral v. John Ancheril and Another [(2001) 6 SCC 170]*: Followed. The Court cited this case to further support the classification of religious institutions as a distinct class.
• Kewal Singh v. Smt. Lajwanti [AIR 1980 SC 1617]*: Referred. The court used this case to highlight that rent control laws are meant to protect tenants but must also do justice to landlords.
• Ravi Dutt Sharma v. Ratan Lal Bhargava [AIR 1984 SC 967]*: Referred. The court used this case to emphasize that the legislature can provide benefits of special procedures to certain classes of landlords.
• Ashoka Marketing Ltd. and Another v. Punjab National Bank and Others [(1990) 4 SCC 406]*: Referred. The Court referred to this case to explain that a later special enactment prevails over an earlier general enactment.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Protection of Religious Institutions: The Court recognized that religious institutions are often prone to mismanagement and that there is a need to protect their properties. The Religious Premises Act was seen as a necessary measure to help these institutions recover their properties from unauthorized occupants.
• Public Purpose: The Court emphasized that religious institutions serve a public purpose and that the legislature can proceed on the assumption that these institutions would act in public interest. This justified the differential treatment given to religious institutions under the Religious Premises Act.
• Special Enactment: The Court viewed the Religious Premises Act as a special enactment designed to address the specific needs of religious institutions. It held that this special enactment could supersede the general provisions of the East Punjab Rent Act.
• Validity of Classification: The Court held that the classification of religious institutions as a separate class is reasonable and has a nexus with the object of the Act. It found that tenants of religious institutions also form a separate class and can be treated differently under law.
• Judicial Review: The Court noted that the Religious Premises Act provides for an appeal to the Commissioner and that the High Court can exercise its writ jurisdiction to review any orders passed under the Act. This ensures that there is a check on the exercise of power under the Act.

Logical Reasoning:

The Court considered the arguments that the Religious Premises Act was discriminatory and that it violated Article 14 of the Constitution. However, the Court rejected these arguments, holding that the classification of religious institutions as a separate class was reasonable and had a nexus with the object of the Act. The Court also considered the fact that the Act provides for an appeal and judicial review, which ensures that there is a check on the exercise of power under the Act.

The Court’s final decision was that the Religious Premises Act is constitutionally valid and that it does not violate Article 14 of the Constitution. The Court emphasized that religious institutions form a distinct class and can be treated differently under law. The Court also held that the Act provides a fair and reasonable procedure for the eviction of unauthorized occupants from properties belonging to religious institutions.

The Court quoted the following from the judgment:

“The Religious Premises Act, unlike the East Punjab Rent Act and the Public Premises Act, concerns itself with the administration of premises belonging to religious institutions and seeks to regulate their rights as landlords vis-à-vis the tenants in occupation.”

“Therefore, classification of properties of “religious institutions” as a separate and distinctive class of properties would not fall foul or be violative of Article 14 of the Constitution.”

“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.”

Key Takeaways

• Tenants of properties owned by religious institutions in Punjab are not protected under the East Punjab Urban Rent Restriction Act, 1949.
• The Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997, provides a separate mechanism for evicting such tenants.
• Religious institutions are considered a separate class and can be treated differently under law.
• The definition of “unauthorized occupant” under the Religious Premises Act is valid, and mere payment of rent does not grant tenancy rights.
• This judgment may lead to more evictions of tenants from properties owned by religious institutions in Punjab.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that religious institutions form a separate and distinct class, andcan be treated differently under law. The Supreme Court upheld the validity of the Punjab Religious Premises and Land (Eviction and Rent Recovery) Act, 1997, which provides a special procedure for evicting unauthorized occupants of religious properties. This judgment clarifies that tenants of religious institutions do not have the same protections as other tenants under the East Punjab Urban Rent Restriction Act, 1949. The judgment has significant implications for the administration of properties belonging to religious institutions in Punjab and may lead to more evictions of tenants from such properties. This judgment also reinforces the principle that the legislature can create special enactments to address the specific needs of certain classes of entities, as long as the classification is reasonable and has a nexus with the object of the Act.