JUDGMENT <NAME>, C.J.

1. This is an appeal against an order made by the Court below, discharging a rule nisi which had been obtained for a writ of certiorari, to bring up an assessment made by the Commissioners of the Town of Calcutta for the purpose of quashing it.

2. The rule was applied for by <NAME> and <NAME>, who are the owners of a family dwelling-house in Bagbazar Street, upon which the assessment was made; and the ground of the application was, that the assessment was illegal, the Commissioners having made it upon a principle which the law did not allow.

3. The learned Judge of the <ORG> below was of opinion that the assessment was made upon a wrong principle; but he considered that in making it the Commissioners were acting within their powers, and consequently he had no authority to interfere.

4. The matter has now come before us on appeal; and, as to the facts of the case, or the general law applicable to the issuing of the certiorari, there seems little or no question.

5. The authority of this <ORG> to remove the proceedings of inferior <ORG>s in the exercise of their judicial functions, is undoubted. It is an authority derived from the old Supreme <ORG>, and is similar to that which was exercised by the <ORG> of Queen's Bench in England; and, if the Commissioners in this case were exceeding their jurisdiction in making the assessment, it seems clear that we have the power to quash it upon certiorari notwithstanding the provision in Section 17 in the Calcutta Municipal Consolidation Act, 1876.

6. That section merely means that the assessment shall be final and conclusive when the Commissioners have made it in the exercise of their powers see <NAME> v. <NAME> 2 Burr. 1041; <NAME> v. <NAME> 3 Mod. Rep. 95; but if they have acted without jurisdiction the certiorari is not taken away by a clause of that kind; and the want or excess of jurisdiction may either be shown upon the proceedings themselves,, or may be brought before this <ORG> upon affidavits. See <NAME> v. <NAME> 1 Man. & E. 139; <NAME> v. <ORG> 11 Ad. & E. 194.

7. I, therefore, entirely agree with the learned Judge in the <ORG> below that the only real question in the case is, whether the Commissioners in making this assessment were acting within their powers.

8. Let us see, therefore, what their powers are:

By Section 64 of the Act, the Commissioners at the Quarterly Meeting to be held in October of each year, are to fix the rates, at which the rates and taxes levied under the Act are to be imposed for the succeeding year. Then by Section 88 they are to impose upon all houses and land within the town of Calcutta certain annual rates, arid, amongst others, a house-rate, which is to be calculated on the annual value of such house and land; and, lastly, by Section 104, the estimated gross annual rent at which any such house or land might reasonably be expected to let from year to year, shall (for the purpose of any rate to be imposed under the Act) be held and deemed to be the annual value of such house or land.

9. Now, for the purpose of determining what the powers of the Commissioners are in imposing these rates, I think that Sections 88 and 104 must be read together, the one being explanatory of the other. The rates which the Commissioners impose are to be calculated on the annual value of the property rated (Section 88); and what is meant by the annual value of the property rated is the gross annual rent at which such property might be expected- to let from year to year (Section 114). These being the powers of the Commissioners, let us now see what they did in this particular case.

10. The family dwelling-house of the applicants was rated in October 1883 at Rs. 4,500 a year; and <NAME>, the assessor to the <ORG>, describes in paragraph 10 of his affidavit the principle upon which it was rated.

11. After stating that the house and premises in question form the joint family dwelling-house of the applicants, and that it is difficult to determine what is a reasonable rental for such houses which are built, not with a view to letting, but for the residence and convenience of the owners, he goes on to say: "In assessing the said premises No. 65, Bagbazar Street, I estimated the total expenditure on the building and land at Rs. 1,80,000, and I assessed the gross annual rent at which the said house and premises might reasdnably be expected to let from year to year at Rs. 4,800, being at the rate of 2f per cent, on the said sum of Rs. 1,80,000.

12. From this assessment the applicants appealed to the Commissioners under Section 114 of the Act, and their appeal was heard on the 15th of January 1884.

13. On this occasion <NAME>, a vakeel of this <ORG>, appeared on behalf of the applicants. He says, in his affidavit, that he pointed out to the Commissioners that the former assessment of the house in question was made by Mr. <NAME> (of the firm of <ORG>) at a rental of Rs. 115, and he produced certificates both from Mr. <NAME> and from <NAME> (who is a Civil Engineer and Surveyor well acquainted with the neighbourhood in which the house is situate) to the effect, that the house would not let from year to year for more than Rs. 250 a month.

14. He then says in paragraph 9 of his affidavit: "The said Commissioners, however, would not listen to my contention, and said that they could not place any reliance on those two certificates as against the assessment made by their own assessor; and although they were perfectly aware that the house and premises in question would not, if let, produce Rs. 250 a month, and probably not Rs. 200 a month, being a native family dwelling-house, and situate in an out-of-the-way place; consequently the probable rent the premises might yield could not be the criterion of assessment, and considering the size of the buildings they did not think that an assessment of Rs. 4,800 per annum was a high assessment,; but, inasmuch as I had argued the appeal, and had formerly been one of the Commissioners of the Town of Calcutta, they would, for my sake, reduce the annual value to Rs. 4,500, and adjudicated accordingly that the said house and premises should be assessed for house rate at the annual value of Rs. 4,500."

15. It seems to me that this statement of <NAME> is virtually uncontradicted. I am satisfied from the affidavits that the Commissioners adopted the assessment of their own surveyor, based, as they knew it was upon a percentage of the estimated cost of the buildings in entire disregard of the principle,, which they were bound by law to adopt as the basis of their assessment, namely, the gross annual rent at which the house might be expected to let from year to year.

16. It may be that the Commissioners on the hearing of the appeal might have reasonably required the attendance of Mr. <NAME>; and that his evidence and that of <NAME> should have been brought before them in the regular way, and not by the mere production of a certificate. But their decision did not rest upon any point of this kind. They adhered to their own surveyor's assessment upon the ground that it was properly made, and they refused to be guided by the principle laid down in Section 104 of the Act.

17. In this it seems to me they acted beyond their powers. They had no right whatever to make the assessment upon any other basis than that which the Act prescribes. The principle upon which they ascertained the annual value of the premises appears to me to have been obviously fallacious; but whether it was so or not, it was an arbitrary test, and one which the law does not sanction.

18. The assessor might just as well have estimated the rental upon the amount of the applicant's private income as upon the original cost of the building.

19. It may be, no doubt, that in assessing joint family property of this nature, some difficulty may often arise. The principle of rating upon which the Commissioners are directed to proceed is the same which is adopted in England; and similar difficulties arise there in the case of gentlemen's parks and mansions which are laid out for residential purposes, and not for sale or letting. But such properties are, nevertheless, constantly rated upon the basis of their annual letting value.

20. It is, of course, no part of our duty to say how such valuations should be made. We have only to see that, in making them, the Commissioners act within their powers. As they have failed to do so in this instance, I think that the order of the <ORG> below should be reversed, and that the rule nisi for the certiorari against the <ORG> should be made absolute.

21. The applicants will be entitled to the costs of the rule against the <ORG> in both Courts upon scale No. 2.

<NAME>, <NAME>

22. I am of the same opinion. I take the same view of the facts as the Chief Justice has taken; and on the facts it is abundantly clear that the assessment upon the applicants was improperly made. The question is, whether the error was an excess of jurisdiction, or amounted only to a miscarriage on the part of the Commissioners while acting within their jurisdiction. If the error goes to jurisdiction, we can, and ought to, interfere by certiorari; if not, we have no power to do so.

23. This question is not free from difficulty, but I have come to the conclusion that the error committed does go to jurisdiction. Three sections of the Calcutta Municipal Consolidation Act, 1876, are material. Section 64 requires the Commissioners at their Quarterly Meeting in October of each year to "fix the rates at which the rates and taxes hereinafter mentioned shall be imposed for the year commencing on the first day of January then next ensuing." That section only gives power to fix the general standard of rating, and has nothing to do with the assessment of the individual properties upon which the rates are to be charged. This is dealt with in Section 88, which says: "The Commissioners shall, as provided in Section 64, impose upon all houses and land within the town the following annual rates, which shall be calculated on the annual value of the said houses and lands." Under this section the Commissioners have power to impose on any house or land a rate calculated on its annual value not on anything else. Now, if we had nothing but these words to guide us, I should say that in such an act value must mean money value, and that the "annual value" of a house must mean the annual money benefit derivable from it, and could not mean any percentage on its cost.

24. But the whole system of taxation and assessment under the Act in question is obviously borrowed in its general outlines from English Eating Acts. In such Acts in England the words "annual value" are in familiar use, and have long received a settled construction. "Annual value" has always been held to mean annual letting value, and I think we ought to give the words the same meaning here. If this be so, the Commissioners are shown to have exceeded their jurisdiction upon the language of Section 88 alone, without the aid of Section 104.

25. Section 104 makes the intention of the <ORG> quite clear. It says: "The estimated gross annual rent at which any house or land liable to rate under this Act might reasonably be expected to let from year to year shall, for the purposes of any rate to be imposed under this Act, be held and deemed to be the annual value of such house or land. The value of land so estimated shall not include the value of any machinery thereupon."

26. This Section first removes any doubt that might without it have arisen as to annual value meaning annual letting value. Secondly, it provides in favour of the public and against the person assessed that annual value is to mean gross rent, whereas it would otherwise have meant net rent, that is the gross rent, less the necessary outgoings, as was held by <ORG> in <NAME> v. <ORG> L.R. 9 App. Cas. 49. Thirdly it gets rid of a possible ambiguity as to machinery.

27. This section, or so much of it as I have cited, may be regarded as in the nature of an interpretation clause explaining the meaning of the words in the earlier section. If so the two must be read together. And then it is, I think, quite clear that the Commissioners have exceeded their jurisdiction.

28. On the other hand this section may be read as only directory, as containing instructions to the Commissioners how to proceed when exercising the jurisdiction conferred by Section 88. In that case a breach of the provisions of Section 104 would not go to jurisdiction. But if so, as I have already pointed, the excess of jurisdiction in this case is, in my opinion, apparent from Section 88 alone without the aid of Section 104.


<NAME>, J.

1. <ORG>, Madras Bench, under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", has referred the following question of law for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the <ORG> was right in holding that the assessee-company was entitled to the deduction of 8 per cent. from its income from priority industries under Section 80E of the Income-tax Act, 1961, for the assessment year 1967-68 ?"

2. The assessee is a company engaged in the business of manufacture of dressers, cutting tools and lapping wheels, which is a priority industry mentioned in Schedule V to the Act, Item 8. For the assessment year 1967-68 the assessee-company returned an income of Rs. 2,45,431 from such priority industry and claimed a deduction of 8% thereon under Section 80E of the Act. The company had also received interest on securities amounting to Rs. 350 for the accounting year relevant to the assessment year in question, namely, 1967-68. The company had incurred losses in the earlier years and there was also unabsorbed depreciation of the earlier years. The Income-tax Officer set off the business losses of the earlier years and the unabsorbed depreciation of the earlier years and arrived at the assessable income as "nil". In view of this action of the Income-tax Officer, the assessee's claim for a deduction from the total sum of Rs. 2,45,431, rebate of 8% as provided for under Section 80E of the Act was negatived. In the view of the Income-tax Officer, as there was no positive income available for assessment to tax, a deduction under Section 80E of the Act was not contemplated.

3. The assessee-company preferred an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that it was not the residuary or the total income, but the entire income from the priority industries which had gone into the computation of the total income that would be the criterion for determining the rebate admissible. Accordingly, he held that the assessee would be entitled to the rebate claimed under Section 80E of the Act. Against that order of the Appellate Assistant Commissioner, the department preferred an appeal to <ORG>. Before the <ORG> the department contended that the income of the assessee from the priority industries though amounted to Rs. 2,45,781, yet after setting off the carried forward losses for the earlier years, the total income of the assessee for the assessment year was nil and, therefore, the Income-tax Officer was justified in not allowing the assessee the relief under Section 80E of the Act as claimed by it. The department also contended that even if there was income from the priority industries and the assessee was entitled to the deduction as claimed by it, yet there would be no income liable to tax for the assessment year under appeal and that, therefore, it would not be possible to work out the relief as claimed by the assessee. On the other hand, the contention of the assessee was that there was a total income and whether the total income was a positive figure or a negative figure was not material, but what was material was, whether the income from priority industries was included in the total income or not and that if there was such inclusion, the assessee would be entitled to the relief claimed by it. The <ORG> has, by its order dated November 16, 1970, held that the two requirements under Section 80E of the Act are: (1) there must be a total income, and (2) in that total income, the profits and gains from the priority industries must be included, and that since both requirements are satisfied, the assessce is entitled to the relief under Section 80E of the Act. It is the correctness of this conclusion of the <ORG> that is being challenged in the form of the question referred to this court, extracted already.

4. It is necessary for the purpose of understanding the controversy to extract Section 80E of the Act:

"80E. Deduction-in respect of profits and gains from specified industries in the case of certain companies.--(1) In the case of a company to which this Section applies, where the total income (as computed in accordance with the other provisions of this Act) includes any profits and gains attributable to the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule, there shall be allowed a deduction from such profits and gains of an amount equal to eight per cent. thereof, in computing the total income of the company.

(2) This Section applies to--

(a) an Indian company ; or

(b) any other company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, but does not apply to any Indian company referred to in Clause (a), or to any other company referred to in Clause (b), if such Indian or other company is a company referred to in Section 108 and its total income as computed before applying the provisions of Sub-section (1) does not exceed twenty-five thousand rupees."

5. The language of this Section makes it clear that so long as the total income, as computed in accordance with the other provisions of the Act includes any profits and gains attributable to the priority industries, the assessee would be entitled to a rebate of 8 per cent. on the said profits and gains attributable to the priority industries. Simply as a matter of construction, we arc of the opinion that, as rightly pointed out by the Appellate Assistant Commissioner, neither the residuary income nor the total income has any bearing on the question and that so long as the total income as computed under the provisions of the Act, includes profits and gains attributable to the priority industries, the assessee will be entitled to the rebate of 8 per cent, on the said profits and gains of the priority industries. As a matter of fact, the language of the Section will itself show that there is no scope for setting off of the earlier years' losses or losses arising out of other business activities of the assessec against the profits and gains attributable to the priority industries. In this particular case, as we have pointed out already, the Income-tax Officer set off against the profits and gains of the priority industries amounting to Rs. 2,45,431 the losses of the earlier years as well as a portion of the unabsorbed depreciation of the earlier years. For the reasons which we have indicated, the Income-tax Officer was not entitled to do the same. As a matter of fact, the decision of <ORG> in <CITATION> directly covers the present case. In that case also <ORG> took the view that the rebate had to be computed before setting off any loss of the earlier years. Having regard to the language of Section 80E of the Act, we are of the opinion that that is the correct view to take.

6. There is also another decision of <ORG> in <CITATION> .  93 ITR 115 (Mys). In that case, the company had tea income liable to charge, which was a priority industry, amounting to Rs. 1,18,214 and it had also incurred loss in plastic business amounting to Rs. 48,105. The assessce claimed that the rebate of 8 per cent. under Section 80E of the Act would have to be worked out on Rs. 1,18,214 before setting off the loss in plastic business, while the Income-tax Officer took the view that the loss in plastic business must first be deducted from the tea income liable to charge and that only on the balance the rebate of 8 per cent. should be calculated. <ORG> held that the view of the Income-tax Officer was erroneous and that the assessee's claim that 8 per cent. would have to be calculated on the tea income liable to charge, namely, Rs. 1,18,214, before setting off the loss in plastic business was correct. Before <ORG> reliance was placed on a circular issued by <ORG> and the relevant portion (para. 27) of the circular is as follows: See  93 ITR 115, 121 (Mys):

"27. It will be observed that the deduction under Section 80E referred to above is allowable in computing the profits and gains from the specified priority industries INCLUDED IN THE TOTAL INCOME 'AS COMPUTED IN ACCORDANCE WITH THE other PROVISIONS' of the Income-tax Act . The effect of this provision is that the deduction under Section 80E will be allowed from the profits from the specified priority industries, as computed AFTER allowing all the deductions admissible in computing the business income under Sections 30 to 43 of the Income-tax Act, and also after giving effect to the relevant provisions for set-off or carry-forward of loss, contained in Chapter VI of that Act. The business income of a company may consist of profits from the specified priority industries, as well as profits from other business activities, and the company may also have a loss in the same previous year under a head of income other than 'profits and gains of business or profession' or a business loss carried forward from earlier years and eligible for set-off against the business profits of that previous year. In such a case, a question may arise as to whether the loss of the relevant previous year under a head other than ' profits and gains of business or profession', or the business loss carried forward from earlier years should be set-off on a proportionate basis, both against the profits from the specified priority industries and the profits from other business activities. If the loss is set off on a proportionate basis, the quantum of the deduction available in respect of the former profits under Section 80E of the Income-tax Act may be reduced to the disadvantage of the company. The Income-tax Act does not, however, provide for the set-off of losses on a proportionate basis against income from different types or categories of business activities. It will, therefore, be permissible for the company to claim that the loss should be set off, in the first instance, against its business profits other than profits from the specified priority industries and as to the balance, if any, against its profits from the specified priority industries." <ORG> held that the court was unable to agree with the views of <ORG> that the effect of the provision was that the deduction under Section 80E would be allowed from the profits from the specified priority industries, as computed after allowing all the deductions admissible in computing the business income under Sections 30 to 43 of the Act. It is unnecessary for the purpose of the present case, to discuss whether <ORG> was right in this view or not, because so far as this case is concerned, the profits and gains of the priority industry have been actually computed in accordance with the provisions contained in Sections 30 to 43 of the Act and such computation is not in controversy before this court. Consequently, the only other question with reference to the circular of <ORG> will be, whether the losses of the earlier years could be set off against the profits and gains of the priority industries. We are of the opinion that the view of <ORG> that such losses should be set off before rebate could be calculated is erroneous and is not borne out by the language of Section 80E of the Act. As a matter of fact, the setting off of the loss is only in Section 72 of the Act and a reading of Section 72 will clearly show that the computation of the profits and gains of the business had preceded, in other words, had already taken place, before one went to the stage of setting off the loss under Section 72 . Section 72(1) of the Act, so far as is relevant, states:

"72. (1) Where for any assessment year, the net result of the computation under the head 'Profits and gains of business or profession' is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of Section 71 , so much of the loss as has not been so set off or, where the assessee has income only under the head 'Capital gains', relating to capital assets other than short-term capital assets, and has exercised the option under Sub-section (2) of that Section or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, ....."

7. The preceding Section 71 deals with set off of loss from one head against income from another and Sub-section (1) of that Section states:

"71. (1) Where in respect of any assessment year the net result of the computation under any head of income other than 'Capital gains' is a loss and the assessee has no income under the head 'Capital gains', he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head."

8. It is worthwhile pointing out that Sections 71 and 72 occur in Chapter VI under the heading, "Aggregation of income and sot off or carry forward of loss", while the computation of total income arising from different sources occurs in Chapter IV under the heading, "Computation of total income", containing Sections 14 to 59 . Thus, both from the setting of Sections 71 and 72 as well as from their language, it is clear that the set-off or carryforward of loss under Sections 71 and 72 succeeds the computation of profits and gains of the business and does not enter into the computation of profits and gains of the business itself. Consequently, we are of the opinion that the <ORG> was right in holding that the assessee was entitled to the rebate of 8 per cent. on the sum of Rs. 2,45,431.

9. As we have pointed out already, the Income-tax Officer set off a part of the unabsorbed depreciation also against the aforesaid amount. When the Appellate Assistant Commissioner allowed the appeal preferred by the assessee, no further controversy arose in that behalf before <ORG> and, therefore, we are not expressing any opinion on this aspect.

10. Under these circumstances, we answer the question referred to this court in the affirmative and in favour of the assessee. The assessee will be entitled to its costs. Counsel's fee is fixed at Rs. 500 (Rupees Five hundred only).


JUDGMENT <NAME>, J.

1. The petitioners have challenged the validity of Section 2(bb) of U. P. Urban Buildings (Regulation of Letting. Rent and Eviction) Act . 1972 (in short the Act) which was inserted by U. P. Amending Act No. 5 of 1995.

2. The petitioners are tenants of Shri Krishna Janarn Asthan Sewa Sansthan, respondent No. 2, registered under the Societies Registration Act . 1860. It filed 14 suits in the year 1988 for ejectment of the petitioners after terminating their tenancy. During the pendency of the suit the Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Amendment Ordinance, 1994 was promulgated whereby clause (bb) was added under subsection (i) of Section 2 of the Act. Section 2 of the Act grants exemption to certain buildings from operation of the Act. In view of insertion of clause (bb), the buildings belonging to or vested in a public charitable or public religious institutions shall also be excluded. Respondent No. 2 filed application for amendment of the plaint claiming the benefit of the exemption in view of the addition of clause (bb) in Section 2 of the Act. The petitioners have challenged the validity of this provision on the ground that the provision is violative of Article 14 of the Constitution.

3. Clauses (bb) and (bbb) were added in clause (a) of sub-section (1) of Section 2 of the Act by the Uttar Pradesh (Regulation of Letting, Rent and Eviction) Amendment Ordinance. 1994 which read as under :

"2. Exemptions from operation of Act.--(1) Nothing in this Act shall apply to (the following, namely) :

(bb) any building belonging to or vested in a public charitable or public religious institution ;

(bbb) any building belonging to or vested in a <ORG> including a waqf-alal-aulad;

Sub-section (3) of Section 2 was deleted. This Ordinance was replaced by the Uttar Pradesh (Amendment) Act No. 5 of 1995.

4. The contention of learned counsel for the petitioners is that the petitioners are being treated unequally as regards other tenants. A tenant under the provisions of the Act is entitled to protection from eviction by the landlord on termination of tenancy and secondly, the fixation of rent is controlled by the provisions of the Act but the petitioners are being deprived of such benefit merely because the building belongs either to public charitable Institution or public religious Institution.

5. The distinction between public charitable or public religious institutions or other class of landlords forms separate categories. The money which is realised as rent is to be utilised by the landlord either for public charitable purpose or for public religious Institutions, while in case of other landlords, it may be utilised for their personal purposes. Section 3 (r) defines charitable institutions and Section 3 (s) defines religious institutions as follows :

"3. In this Act, unless the context otherwise requires--

(r) 'charitable institution" means any establishment, undertaking, organisation or association formed for a charitable purpose and includes a specific endowment ;

Explanation.--For the purposes of this clause the words "charitable purpose" includes relief of poverty, education, medical relief and advancement of any other object of utility or welfare to the general public or any section thereof, not being an object of an exclusively religious nature :

(s) "religious institution" means a temple, math, mosque, church, gurudwara or any other place of public worship;....."

The legislation has further made it clear that such exemption is applicable only to the institution which is of a public character either charitable institution or religious Institution.

6. It is settled principle of law that a classification can be made but it should have reasonable nexus with the object sought to be achieved. The distinction between two categories of persons, namely, the personal property of individuals and those belonging to public religious or charitable institutions was considered in <CITATION> , 1985 (1) SCC 290, The facts of this case were that Section 29 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. 'conferred the power on the <ORG> to exempt a building or class of buildings from all or any of the provisions of the Act. The State <ORG> in pursuance of this provision Issued notification whereby it exempted all buildings owned by the Hindu, Christian and Muslim religious public trust and public charitable trust from all the provisions of the said Act. The tenants challenged the aforesaid notification on two grounds firstly, that the power conferred to the State <ORG> was unguided and secondly, it was discriminatory and offending against the equal protection of Article 14 of the Constitution. <ORG> repelled both the contentions. The Court observed :

"It cannot be disputed that public religious and charitable endowments or trusts constitute a well recognised distinct group inasmuch as they not only serve public purposes but the disbursement of their income is governed by the objects with which they are created and buildings belonging to such public religious and charitable endowments or trusts clearly fall into a distinct class different from buildings owned by private landlords and as such their classification into one group done by <ORG> while Issuing the impugned notification must be regarded as having been based on an intelligible differentia."

<ORG> approved the decision of the case State of M. P. v. <NAME>, 1970 MPLJ 973, wherein the State Government granted exemption by issuing notification under Section 3 (2) of M. P. Accommodation Control Act. One of the grounds of challenge was that the notification was discriminatory as the grant of exemption was not germane to the policy of the Act. <ORG> upheld the validity of Section 3 (2) of the Act on the ground that the policy to exempt religious pubic trust was valid but struck down the notification considering the facts of that case.

7. The object underlying clause (bb) of sub-section (1) of Section 2 of the Act clearly indicates that the classification of two distinct kinds of buildings has a reasonable nexus to the object sought to be achieved and, therefore, this provision is not discriminatory and hit by Article 14 of the Constitution.

8. The next submission of learned counsel for the petitioner is that sub-rule (5) of Rule 3 of U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Rules. 1972. provides that before an order of exemption under Section 2 (3) is passed, the sitting tenant, if any, shall be given an opportunity of making representation against the proposed order but now the property is being exempted without giving an opportunity of hearing. This submission no longer subsists after deletion of sub-section (3) of Section 2 of the Act by U. P. Act No. 5 of 1995. Sub-section (3) of Section 2 of the Act conferred power on <ORG> to exempt from all or any of the provisions of the Act any building which was owned by a public charitable or public religious institution by a notice. Rule 3 was framed laying down the procedure to be followed while exercising the power by <ORG> for exemption under this provision. As this provision has been deleted. Rule 3 of the Rules 1972 has become redundant. The tenant can if he is sought to be evicted in any suit or proceeding wherein the landlord claims the exemption from the operation of the Act under clause (bb) of Sub-section (1) of Section 2 of the Act, he can raise, an objection that the building does not belong or vest in public charitable or public religious institution and to prove this version he can also lead the evidence. The tenant has not been deprived of any opportunity of hearing in that respect.

9. In view of the above discussion, there is no merit in this writ petition. It is accordingly dismissed.


<NAME>, Acting, <NAME> and <NAME>, J.

1. This first appeal arises out of a suit brought by the appellants who were plaintiffs in the <ORG> below. According to them, they in Sambat 1914, corresponding to the year 1857, made a religious endowment consisting of certain buildings situate at Sarsya Ghat in the city of Cawnpore.

2. The religious endowment was for the promotion of the Nanak Shahi religion. They installed one <NAME> to carry out all the necessary rites connected with the endowments, and in succession to him they also appointed one <NAME>. Upon <NAME>'s death they appointed as a temporary measure <NAME> to carry on the duties connected with the <ORG> until such time as they could make a further appointment.

3. The first four defendants, who represent themselves as <NAME> and as disciples of <NAME> and also of <NAME>, aforesaid, denied the plaintiffs' title to make any appointment to the religious endowment. They attempted to realize certain bonds belonging to the religious endowment on the ground that these bonds and the properties connected with the endowment were the self-acquired property of <NAME>. The plaintiffs accordingly asked for a declaratory decree to the effect that the property scheduled in the plaint was endowed property dedicated to <NAME>; that the defendants had no right of their own to that property, and that the plaintiffs had power to appoint on their behalf any person they liked as manager. The defence was that the property in dispute was not the <ORG> property, not was <NAME> a superintendent, nor was he appointed on behalf of the plaintiffs, The whole of the property in dispute was the self-acquired property of <NAME>. The property had been purchased in his name and stood in his name in the khewats and other revenue papers. He was not a manager on behalf of, or subordinate to, the plaintiffs. All suits which it had been necessary to bring in respect of these properties had always been brought by <NAME> in his own right. <NAME> died intestate, and the answering defendants being his disciples are entitled to succeed him. <NAME>, defendant No. 5, filed a separate written statement, but it is not necessary to enter at length into what was stated therein, except to say that he sets up in himself a right as Mahant of the <ORG> upon appointment by the plaintiffs. Four issues were framed by the <ORG> below, but only the third and the fourth require consideration for the purpose of this appeal. They are as follows: 3rd. Whether the property in suit appertaining to the <ORG> is dedicated property; 4thly, if so, whether the plaintiffs have any title to the property as superintendents and also have a right to appoint a successor of <NAME>. The learned Subordinate Judge decided the third issue in the plaintiffs' favour and gave them a declaration to the effect that the properties in question are endowed property appertaining to the <ORG> at Sarsya Ghat. He dismissed that portion of the plaintiffs' claim in which they seek for a declaration that they arc superintendents of the property and have the power to appoint any person they like as a manager. The arguments addressed to us during the hearing of this appeal referred only to this portion of the reliefs claimed. The respondent has printed no evidence, and throughout the hearing of this appeal our attention was confined to the evidence printed by the appellants. The plaintiff went into the witness-box and said without any hesitation that the appellant had absolute power to appoint whomsoever they liked for the worship of the <NAME>. He gave the origin of the endowment, deposed that first <NAME>, and, in succession to <NAME>, <NAME> after an interval was appointed by the appellants as the superintendent of the endowment. He gave more than one instance of direct interference in the affairs of the endowment, and it was not elicited by cross-examination that in making the endowment the founder had imposed any limitation on their powers with regard to the same. His statement was confirmed by the evidence of <NAME>, who, while, it is true, stating that all who belonged to the sect had power to appoint <NAME>, said that the plaintiffs had more authority than others because the buildings belong to them. They installed <NAME>. To the same effect is the deposition of <NAME> and <NAME> who belong to this form of worship. A witness, <NAME>, claimed to have been present on the day <NAME> was installed, and he says his installation was the work of <NAME>, one of the appellants. The witness <NAME> gives a very graphic account of the filling up of the vacancy caused by the disappearance of <NAME>. He too says that <NAME> was appointed by Lala <NAME>. <NAME> confirms him in this In short, we have very strong and voluminous evidence showing that the religious endowment was founded by the appellants and that each of the two <NAME> in turn who had presided over it had been appointed by the appellants. Upon this finding the proposition of law enunciated by their Lordships of <ORG> in the case of <NAME> v. <NAME> (1889) L.R., 16 I.A., 137; I.L.R., 17 Calc., 3 would apply. Their Lordships say: "According to Hindu law, when the worship of a Thakur has been founded, the Shebaitship is held to be vested in the heirs of the founder in default of evidence that he deposed of it otherwise or there has been some usage, course of dealing or some circumstance to show a different mode of devolution." The rule of law laid down in that case was applied by this <ORG> in the case of <CITATION> . (1896) I.L.R., 18 All., 227 It was for the respondents to establish that the appellants had divested themselves, either at the foundation or afterwards, of the powers which naturally belong to them. This they have not done. In the present case, moreover, as no one has been shown to be entitled to succeed <NAME>, the right of management reverts to the heirs of the founder (see <NAME> v. <NAME> (1870) 5 B.L.R., 181. It cannot be claimed for <NAME> that he held the office of trustee of this religious endowment, for it will be remembered that the case set up by the defendants is that the endowment is not a religious endowment, and that all the buildings and other property, the subject-matter of this appeal, are the self-acquired property of <NAME>. This neither the <ORG> below found, nor do we find supported by any evidence that has been shown to us. If no trust was created, then the nomination vests by law in the founder and his heirs, unless there has been some usage or course of dealing which points to a different mode of devolution--see <CITATION> , (1896) I.L.R., 18 All., 227. The result is that we allow this appeal and modify the decree of the <ORG> below so far that we decree the plaintiffs' suit in full, with costs as against all the respondents save <NAME>.