A Private Landlord filed a suit against the Nationalized Bank and the occupant of the Premises for recovering Vacant Possession of the Flat let out to the Bank, after terminating the Bank's tenancy and in the same suit also claimed mense profits at the market rate after the date of the termination of tenancy. It is the case of the Landlord that the Provisions of the Maharashtra Rent Control Act of 1999 do not apply to the Nationalised Banks U/S 3(1) (b) of the said Act. As such the Landlord filed suit U/S 41 of the Presidency Small Causes Court Act. It is the contention of the Nationalised Bank and also of the occupant of the premises that the Provision U/S 3(1) (b) of the said Act are ultra virus under Article 14 of the Constitution and prayed that the said issue be referred to the High Court of Judicature at Bombay for its opinion under Section 113 of the Civil Procedure Code.

In A.I.R. 1959 Allahabad Page 659, it has been held that U/S 113 of the Code of Civil Procedure a Court can state a case and refer the same for the Opinion of the High Court, such an opinion is to be sought when the Court itself feels some doubts about the question and not when the Court has formed the opinion and acted upon it.

In A. I. R 1958 Madras 412, it is held that it is a condition required by the provision before a reference could be made that the Court making the reference should record finding that, in its opinion the provisions whose validity is challenged appeared to it, prima facie, to be invalid.

In the decision reported in AIR 1958 SC page 538, it is held that Art. 14 of the Constitution of India forbids class legislation but it does not forbid reasonable classification for the purpose of legislation. In order to pass the test of permissible classification two conditions must be fulfilled viz.:

• That the classification must be founded on an intelligible differentia, which distinguishes persons, or things that are grouped together from others left out of the Group and
• That the differentia must have a rational relation to the object sought to be achieved by the statute in question.

The classification may be founded on different basis: What is necessary is that there must be nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of the Supreme Court that Art 14 condemns discrimination not only by the substantive Law but also by the Law of Procedure. In (1995) 1 SCC Page 104, it is held that the legislature in its wisdom can effect rational classification and the classification based on the cut off point namely on Income or monthly rent is a reasonable classification. However in the same Judgement it is held that, if the classification is totally irrational and has no nexus with the object sought to be achieved by the statute, then the Court will strike down such classification as ultra virus of the constitution. In AIR 1990 SC Page 2286, it is held that the classification based on Income is well known to Law and such classification has a reasonable relation to the twin legislative objects. The classification based on Income or monthly rent, was dealt with, by the Supreme Court while dealing with the Provisions under Delhi Rent Control Act, Karnataka Rent Control Act and Jammu & Kashmir Rent Control Act. However, neither the Supreme Court nor any High Court has so far dealt with the classification as done under the Maharashtra Rent Control Act 1999.

So far as the State of Maharashtra is concerned the Supreme Court had occasion to deal with the Provision of the Bombay Rent Control Act relating to the determination and fixation of standard rent. In (1998) 2 SCC Page 1, Malpe Vishwanath Acharaya & others Versus The State of Maharashtra & another in which the Property Owners' Association challenged the validity of Sec. 5(10) (b), 7,9 (2). And 12(3) of the Bombay Rent Control Act contending that the Provisions regarding standard rent which were fair and reasonable when originally enacted with the passage of time it become arbitrary and unreasonable in changed circumstances. However the Supreme Court in the same Judgement did not strike down the same in view of the fact that the then extended period of the Bombay Rent Control Act was to come to an end on 31st March 1998 and observed that since the New Bill is under consideration the Supreme Court left it to the Legislature to frame a just and fair law keeping in view the interest of all concerned and further observed that any future extension of then existing provisions regarding the standard rent without bringing them in line of the views expressed in the Judgement would be invalid as being arbitrary and voilative of Art 14 of the Constitution. In the same Judgement the Supreme Court has observed that in so far as the Social Legislation like the Rent Control Act is concerned the Law must strike a balance between rival interests and should be just to all. The Law ought not be unjust to one and give a disproportionate benefit and protection to another Section of Society. When there is shortage of accommodation it is desirable, nay be necessary, that some protection should be given to the tenants in order to ensure that they are not exploited.

It is important to note that the 'Property Owners' Association only felt that the Provisions under the Old Bombay Rent Control Act relating to the standard rent namely Control of Rent was arbitrary and unfair to them. However the Landlords have not at any time objected to the Provisions in the Act, which control Eviction, after the decision in the said Judgement (Reported in AIR (1998) 2 SCC Page 1). The Maharashtra Legislature passed the present Act namely the Maharashtra Rent Control Act 1999 which came into force W.E.F 31st March 2000. If one looks at the New Act as a whole it would appear that the Provisions of the said Act are neither fair to the large majority of the Owners, nor fair to the large majority of the tenants. But it appears that it is aimed at benefiting the small vocal sanction of the Society viz. The Builders' Lobby, and gain to the Government, in earning more revenue. However, presently I restrict myself to the Provisions of Sec. 3(a) (b) of the said New Act. So as far as Nationalised Banks are concerned the classification made under Section 3 (1) (b) of the said Act is irrational and has no nexus with the object sought to be achieved by the statute and as such the same is liable to be struck down as violative of Art 14 of the Constitution of India. And thus it is a fit case for referring the said question-issue for the Opinion of the High Court Under Section 113 of the Code of Civil Procedure. Now let us see what is irrational. In Law Lexicon rational is defined, "as endowed with reason" a 'rational doubt' is equivalent to 'reasonable doubt'. Oxford Dictionary defines 'rational' as 'based on reason', sensible, same endowed with reasons or 'logical basis'.

So far as the Nationalised Banks are concerned it is necessary to bear in mind that prior to that these Banks were running on commercial lines with the sole motive of making profits and the moneys received by the Banks were available only to the effluent members of the Society. The Government of India thought that the moneys in the Banks, which is public money, should be utilized for the public good and therefore top most Banks having capital of more than 50 cores were nationalised for public good. The object of nationalising the 14 Banks is stated in the preamble of the Act No.5 of 1970. An act to provide for the acquisition and transfer of the undertakings of certain Banking Companies having regard to their size, resources, coverage and organisation in order to control the heights of the economy and to enact progressively and serve better, the needs of development of the economy, in conformity with National Policy and objectives for matters connected therewith or incidental thereto. Thus so far the Nationalised Banks were concerned the profit motive ceased to be the objective and in its place the object of Public good came into force and the moneys available with such Banks were made available for poor and weaker section of the Society and other needy persons and institutions. Out of 14 Nationalised Banks, 10 Banks were running in loss during the course of ten years from 1970 to 1980. Even than since the Banks were Government of India Undertakings, the General Public who were investing in the Banks were not at all disturbed inspite of the said position. Inspite of the said position, the Government of India in 1980 nationalised and acquired 6 more Banks by the Act of 40 of 1980 and the object of their acquisition as set out in the preamble is as follows: -

"An act to provide for the acquisition and transfer of undertakings of certain Banking Companies having regard to the sizes, resources, coverage, and organization in or order further to control the heights of the economy, to meet progressively and serve better the needs of the development of the economy and to promote the welfare of the people, in conformity with the policy of the state towards securing the Principles laid down in Clauses (b) and (c) of Article 39 of the constitution of India and for matters connected therewith and incidental thereto. Article 39 Clause (b) & (c) thereof is as under:"

The State shall in particular, direct its policy towards securing (b) that the ownership and control of the National resources of the Community are so distributed as best to observe the common good & (c) that the operation of the economic system does not result in the concentration of wealth. Thus it will be seen that the 20 Banks which were nationalised were done for the public good and the moneys so available for in the said Banks were used for the public good and utilised in the General Interest of Public good, and the Banks could cater to the needs of the General Public and render necessary and utility service to the public. These Banks run various branches at various places, and they cater to the needs of the General Public. If these Branches of the Nationalised Banks are evicted from the premises it would cause tremendous loss and inconvenience to the General Public and the employees employed in the Banks would become jobless. This in no way will help the object of encouraging the construction of new houses. Apart from that, the fact remains that it would be in contravention with the objective of the Act of giving protection to the tenants from eviction. This is so far as the business premises occupied by the Nationalised Banks are concerned. Now let us take a case of the residential premises taken on rent by the Banks. The Banks secure the residential premises for providing accommodation for their needy employees such as sweepers, peons, clerks, officers and Directors etc. If the Banks are made to vacate the said premises rented for the purposes of their employees, their said employees would be thrown on the streets and they cannot afford to pay the market rate rent. Thus it will be seen that the classifications made U/S 3 (1) (b) of the Maharashtra Rent Control Act 1999 so far as the Nationalized Banks are concerned is both irrational and has no nexus with the objects of the Act. The Maharashtra Rent Control Act 1999 gives protection to states as well as Central Government but does not give protection to Nationalized Banks, which are Government of India Undertakings. It is pertinent to note that in each state the problems are different. In the State of Maharashtra particularly in the cities like Mumbai, Pune etc., the problem is of scarcity of Accommodation and the Rent Act which is a social peace of Legislation becomes necessary to be enacted because of the scarcity of accommodation and to prevent exploitation on that account and therefore it becomes necessary to control the rents and to control eviction as otherwise it would cause tremendous harm to the General Public. Even if we see the object of enacting the said Maharashtra Rent Control Act 1999 it clearly states in its preamble that it is expedient to unify, consolidate, and amend, the Laws prevailing in the different parts of the State relating to the Control of Rents & Repairs of certain premises and of eviction and for encouraging the construction of the New Houses by assuring a fair return and to provide for the matters connected with the purposes aforesaid. Thus it will be seen that, there is no rational or reason behind excluding the protection of the Rent Act to the Nationalized Banks nor there is any nexus with the said objects of the said Maharashtra Rent Control Act 1999.

In view of the above position and situation I feel that it is a fit case for referring the said matter-issue to the Hon'ble High Court at Bombay for its opinion on the Constitutional validity of Sec. 3(1) (b) of the said Act so far as it relates to the Nationalised Banks.