SARASWAT CO-OP. BANK LTD. AND ANR. versus STATE OF MAHARASHTRA AND ORS.

Citation: [2006] SUPP. 4 S.C.R. 567 · Decided: 17-08-2006 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Dismissed

Judgment (excerpt)

-
. J 
SARASWAT CO-OP. BANK LTD. AND ANR. 
v. 
STATE OF MAHARASHTRA AND ORS. 
AUGUST 17, 2006 
[B.P. SINGH AND AL TAMAS KAB!R,JJ.] 
Rent Control and Eviction: 
Maharashtra Rent Control Act, I999: 
Section 3(/)(b)-Exclusion of certain premises from the protection of 
the Act-Constitutional validity of-Held: It is within the legislative 
competence of the State to enact laws for the protection of certain sections 
A 
B 
c 
of society on the basis of economic criteria so long as it does not result in 
unreasonable classification-The decision to exclude private limited D 
companies and public limited companies having a paid-up share capital of 
Rupees one crore or more from the protection of the Act is in consonance 
with the object sought to be achieved by the Act-Inclusion of scheduled 
banks, along with other banks, which have been excluded from the protection 
of the Act, is also valid-The Act would have equal application to all 
premises let out either before or after the commencement of the Act-Hence, E 
provisions of S. 3(/)(b) are intra vires and did not offend Art. I4 of the 
Constitution. 
With a view to achieving the objects for which the Maharashtra Rent 
Control Act, 1999 was enacted, certain premises, as indicated in Section 3 
thereof, were exempted from the provisions of the Act. The appellants F 
contended that the provisions of Section 3(1) of the Act offended the equality 
clause enshrined in Article 14 of the Constitution. It was contended that the 
Legislature had acted arbitrarily in discriminating between the different sets 
of premises and tenants and in prescribing the standard for the purpose of 
excluding certain companies from the protection of the Act. It was contended G 
that exclusion of private limited companies and public limited companies having 
a paid-up share capital of Rupees one crore or more was discriminatory. It 
was also contended that inclusion of scheduled banks, along with other banks, 
which have been excluded from protection of the Act was arbitrary. The High 
Court held that provisions of Section 3(l)(b) of the Act were intra vires and 
567 
H 
568 
SUPREME COURT REPORTS (2006] SUPP. 4 S.C.R. 
.. 
A did not offend Article 14 of the Constitution. Hence the appeal. 
Dismissing the appeal, the Court 
HELD: I.I. Although, earlier a view had been taken by this Court that 
prescribing a standard or differentiating between categories of tenancies was 
B violative of Article 14 of the Constitution, the subsequent view taken by this 
Court is that so long as the classification sought to be made was based on an 
intelligible differentia and had a nexus with the object sought to be achieved 
by the statute, the same would not offend the equality clause contained in 
Article 14 of the Constitution.1579-A-Bf 
c 
1.2. It is quite clear that it is within the legislative competence of the 
State to enact laws for the protection of certain sections of society on the 
basis of economic criteria and so long as it does not result in unreasonable 
classification, it is for the Legislature to decide whom it should include or 
exclude from the application of such laws. 1579-8-Cf 
D 
Motor General Traders v. State uf Andhra Pradesh, I 1984] 1 SCC 222, 
Rattan Arya v. State of Tamil Nadu, 1I986f3 SCC 385, D.C. Bhatia v. Union 
of India, !1995] l SCC 104, Shamrao Vitha/ Co-op. Bank ltd. v. Padubidri 
Pattabhiram Bhat, AIR (1993) Born. 91, Delhi Cloth & General Mills ltd v. 
S. Paramjit Singh, fl990f 4 SCC 723 and Kedar Nath Bajoria v. State of West 
E Bengal, f 19541SCR30, referrecl to. 
2. The decision to exclude private limited companies and public limited 
companies having a paid-up share capital of Rupees one crore or more from 
the protection of the Maharashtra Rent Control Act, 1999 is in consonance 
with the object sought to be achieved by the Act as indicated in its preamble. 
F In order to achieve such an object, a cut-off point has to be settled and the 
Legislature in its wisdom has settled such cut-of point in excluding companies 
having a paid-up share capital of Rupees one crore or more from the protection 
of the Act. 1579-DI 
G 
3. It is not possible to accept the contention that the paid-up share capital 
of the company is not a fair indicator ofa company's worth and that its net 
worth is a better indicator. Which of the two methods ought to have been adopted 
by the Legislature is not for this Court to decide once a view has been taken 
that the method as adopted is not arbitrary

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