Tenants of Religious Endowments Form a Separate Class: Supreme Court Upholds Andhra Lease Cancellation Law

Section 82 of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 cancels all subsisting leases of agricultural land belonging to the institutions, except leases held by landless poor persons, who may buy the land at 75% of its market value (para 7). A Single Judge of the High Court struck down part of it; the Division Bench held Section 82(1) void under Article 14, reasoning that it singled out these tenants and that, with rents frozen under the tenancy laws, cancellation would not raise the institutions' income (paras 1, 2). The State appealed by special leave; two connected writ petitions raised further challenges (paras 1, 18).

Classification is permissible if founded on an intelligible differentia having a rational connection with the object; it need not be scientifically perfect, and a law does not become discriminatory because a fortuitous circumstance gives some an advantage (para 8). The High Court had no material on present or future rents, and "When the material is not clear before the court, the court cannot hazard a guess as to the manner in which the enactment would operate" (para 11). Whether a tenancy law should apply to religious institutions is a matter for the legislature, though the policy must not be irrational (para 11). Religious institutions and their tenants form a special class, so no hostile discrimination arose (para 12). The legislature may choose whom to exempt, and the landless poor exemption was valid (para 13). "If there is no material one way or the other, the presumption that the Act is good should prevail", and hardship to some tenants is no ground to condemn the Act (para 15). In the writ petitions, the livelihood argument under Article 21 and the Article 31A argument were rejected (paras 20, 21).