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TMI Blog2006 (11) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... together doing away with the existing legislative policy and laying down a new policy therefor. Change of legislative policy with the aid of the National Housing Policy was not within the domain of the Administrator. It was the sole prerogative of the legislature. A statute can be amended, partially repealed or wholly repealed by the legislature only. The philosophy underlying a statute or the legislative policy, with the passage of time, may be altered but therefor only the legislature has the requisite power and not the executive. The delegated legislation must be exercised, it is trite, within the parameters of essential legislative policy. The question must be considered from another angle. Delegation of essential legislative function is impermissible. It is essential for the legislature to declare its legislative policy which can be gathered from the express words used in the statute or by necessary implication, having regard to the attending circumstances. It is impermissible for the legislature to abdicate its essential legislative functions. The legislature cannot delegate its power to repeal the law or modify its essential features. Section 3 of the Act, indisputably, is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principle and not the minimum rent specified therein. Thus, it was necessary to collect relevant data. Rental of 1500/- could not have been applied mechanically. The High Court has followed D.C. Bhatia [ 1994 (10) TMI 301 - SUPREME COURT] but it has failed to notice that in D.C. Bhatia (supra) itself whereas the proposal in the bill was to fix 1500/- as the outer limit, the members of the legislature upon deliberation in the matter, had fixed the quantum of rent at 3500/-. Furthermore, for the aforementioned purpose, the lowest ceiling of 1500/- might have been treated to be fair in the year 1992 but the same would have lost much significance and relevance in the year 2002 in view of the passage of time. The rate of inflation and other relevant factors as well as the fact that the per capita income in UT of Chandigarh is considered to be the highest in the country, were necessary to be taken into consideration. This Court, in Prabhakaran Nair Ors. vs. State of Tamil Nadu Ors.[ 1987 (9) TMI 421 - SUPREME COURT] , opined that a National Housing Policy should be formulated and the observations made therein had been given effect to. But, this Court never intended that a National Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05, CANO. 4690 OF 2006 @ S.L.P.(Civil)No.2758/2005, CANO. 4691 OF 2006 @ S.L.P.(Civil)No.2760/2005, CA NO. 4692 OF 2006 @ S.L.P.(Civil)No.5354/2005, CANO. 4693 OF 2006 @ S.L.P.(Civil)No.5647/2005 & CA NO. 4694 OF 2006 @ S.L.P.(Civil)No.6657/2005. S.B. SINHA , J : For Appellant/Petitioner/Plaintiff: Ashok H. Desai, Anil B. Divan, Abhishek Manu Singhvi and Amit Chadha, Sr. Advs., Alok Agarwal, Vikas Jain, Sanjay Chhabra, Susmita Lal, Ruby Singh Ahuja, Dinesh Verma, Suresh Kumari, A.P. Mohanty, Sudershan Goel, Dhiraj, P.N. Puri, Amar Vivek, Jasbir Singh Malik, Arun Kumar Singh, S.K. Sabharwal, R.K. Rathore, M.K. Verma, Shareen Sethi, Bhavna Sethi and Aribam Guneshwar Sharma, Advs Asha Jain Madan, P.C. Dhingra and Mukesh Jain, Advs JUDGEMENT S.B. Sinha, J. 1. Leave granted. Background facts: 2. Appellants are tenants in the premises situated within the Union Territory of Chandigarh. They were protected in terms of the East Punjab Urban Rent Restriction Act, 1949 (for short, 'the 1949 Act'). The Administrator of Chandigarh in exercise of his power conferred upon him under Section 3 of the 1949 Act issued a notification dated 07.11.2002 whereby and whereunder it was direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut just or sufficient cause cannot interfere with the amenities enjoyed by the tenant. Section 13 protects the tenants from eviction, envisaging that unless one or more ground specified therein is satisfied, no tenant shall be evicted from the tenanted premises save and except in execution of a decree passed by the Rent Controller. Section 13A provides for right to recover immediate possession of residential or scheduled building to accrue to certain persons. The operation of the said Act was extended to the Union Territory of Chandigarh by a notification, in terms whereof it with certain modifications came into force w.e.f. 04.11.1972. The said notification was struck down by the High Court on the premise that it was not declared to be an urban area. Chandigarh was declared to be an urban area in 1972. 5. The Parliament thereafter enacted the East Punjab Urban Rent Restriction (Extension to Chandigarh) Act, 1974 (for short "1974 Act"), the relevant provisions whereof read as under: 1. This Act may be called the East Punjab Urban Rent Restriction Act (Extension to Chandigarh) Act, 1974. 2. In this Act, "the Act" means the East Punjab Urban Rent Restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policy adopted by the Central Government as also various correspondences entered into by and between it and Administration of Union Territory of Chandigarh to which we would advert to later. The High Court dismissed the said writ petitions holding that the said notification dated 7.11.2002 was not ultra vires the provisions of the 1949 Act. High Court Judgment: 7. The High Court upheld the validity of the said notification stating: (a) The Administrator has not acted contrary to the legislative policy enshrined under the statute. (b) While considering the legislative policy and object behind the enactment of the 1949 Act, the court cannot overlook the fact that in the original enactment, amendments had been carried out by the legislature on at least on two different occasions. (c) The Administrator having acted in furtherance of the power conferred upon him under Section 3 of the 1949 Act by the legislature itself, exercise of such power was not contrary to the legislative policy and/or preamble to the 1949 Act. (d) By reason of the said notification exempting application of the provisions of the Act in respect of the tenanted premises fetching monthly rent of Rs. 1500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Act; (vi) Before exercising the power of delegated legislation, the Administrator was bound to take into consideration the relevant factors and for the said purpose it was required of him to be adequately informed as to how and to what extent the legislative policy may be given effect to; (vii) The impugned notification being not restricted to particular buildings or class of buildings, the classification sought to be made on the basis of paying capacity of a tenant or the tenants themselves is ultra vires Section 3 of the Act; (viii) The impugned notification is unconstitutional as it contravenes the legal philosophy underlying a beneficent legislation insofar as it has done away with the statutory limitations imposed upon the landlords to evict the tenant except on the grounds enumerated in Section 13 of the Act as also from enhancement of rent in an arbitrary manner. 9. The contentions of Respondents, on the other hand, are: (i) Reasonable classification of 'tenants' and 'tenanted premises' is permissible in terms of Article 14 of the Constitution of India. (ii) The Objects and Reasons of the 1974 Act, inter alia, was to regulate rent of the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, no exception can be taken to the exercise of the power of delegated legislation by the Administrator; (xii) In view of the National Housing Scheme framed by the Government of India in the year 1991, the Administrator cannot be said to have committed any illegality in issuing the said notification as by reason thereof a balance has been sought to be maintained between the interests of the landlords and those of the tenants, particularly, in view of the fact that by reason thereof the landlords were to be provided adequate return on their investment and so as to see that the tenants do not enjoy any unfair advantage over the landlords. Conditional legislation and delegated legislation: 10. We, at the outset, would like to express our disagreement to the contentions raised before us by the learned Counsel appearing on behalf of Respondents that the impugned notification is in effect and substance a conditional legislation and not a delegated legislation. The distinction between conditional legislation and delegated legislation is clear and unambiguous. In a conditional legislation the delegate has to apply the law to an area or to determine the time and manner of carrying it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority the time and manner of carrying its legislation into effect as also the determination of the area to which it is to extend; {See also M.P. High Court Bar Association v. Union of India and Ors. AIR2005SC4114 ; State of Tamil Nadu, represented by Secretary, Housing Deptt., Madras v. K. Sabanayagam and Anr. AIR1997SC4325 ; and Orient Paper and Industries Ltd. and Anr. v. State of Orissa and Ors. AIR1991SC672 Judicial review of delegated legislation: 12. While considering the validity of delegated legislation, the scope of judicial review is limited but the scope and effect thereof has to be considered having regard to the nature and object thereof. 13. The nature of delegated legislation can be broadly classified as: (i) the rule-making power; (ii) grant of exemption from the operation of a statute. In the latter category, the scope of judicial review would be wider as the statutory authority while exercising its statutory power must show that the same had not only been done within the four-corners thereof but otherwise fulfils the criteria laid down therefore as was held by this Court, inter alia, in P.J. Irani v. State of Madras and Anr. [1962]2SCR169 . 14. In Craies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicial review like delegated legislation. Compliance with the laying requirement or even approval by a resolution of Parliament does not confer any immunity to the delegated legislation but it may be a circumstance to be taken into account along with other factors to uphold its validity although as earlier seen a laying clause may prevent the enabling Act being declared invalid for excessive delegation. 16. In Clariant International Ltd. and Anr. v. Securities & Exchange Board of India AIR2004SC4236 , this Court observed: When any criterion is fixed by a statute or by a policy, an attempt should be made by the authority making the delegated legislation to follow the policy formulation broadly and substantially and in conformity therewith. [See Secy., Ministry of Chemicals & Fertilizers, Govt. of India v. Cipla Ltd. SCC para 4.1.) 17. We may notice that in State of Rajasthan and Ors. v. Basant Nahata AIR2005SC3401 , it was pointed out: The contention raised to the effect that this Court would not interfere with the policy decision is again devoid of any merit. A legislative policy must conform to the provisions of the constitutional mandates. Even otherwise a policy decision c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Magistrate (Rev.) Delhi Admn. etc. v. Siri Ram etc. (2000)5SCC451 and ITW Signode India Ltd. v. Collector of Central Excise 2003ECR783(SC) .} 20. It is interesting to note that in Secretary, Ministry of Chemicals & Fertilizers, Government of India v. Cipla Ltd. and Ors. AIR2003SC3078 , this Court opined: It is axiomatic that the contents of a policy document cannot be read and interpreted as statutory provisions. Too much of legalism cannot be imported in understanding the scope and meaning of the clauses contained in policy formulations. At the same time, the Central Government which combines the dual role of policy-maker and the delegate of legislative power, cannot at its sweet will and pleasure give a go-by to the policy guidelines evolved by itself in the matter of selection of drugs for price control. The Government itself stressed on the need to evolve and adopt transparent criteria to be applied across the board so as to minimize the scope for subjective approach and therefore came forward with specific criteria. It is nobody's case that for any good reasons, the policy or norms have been changed or have become impracticable of compliance. We may hereinafter notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution. It cannot, no doubt, be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which the Court considers relevant. It was categorically held that a subordinate legislation would not enjoy the same degree of immunity as a legislative act would. To the same effect are the decisions of this Court in Khoday Distilleries Ltd. and Ors. v. State of Karnataka and Ors. AIR1996SC911 and Dai-ichi Karkaria Ltd. v. Union of India and Ors. 2000ECR429(SC) , wherein Indian Express Newspapers (Bombay) Pvt. Ltd. (supra) was followed. We, therefore, need not deal with them separately 23. It is not necessary for us to dilate on this subject as in Bombay Dyeing & Mfg. Co. Ltd. (3) v. Bombay Environmental Action Group and Ors. reported in AIR2006SC1489 , the power of judicial review on delegated legislation has been considered at some details, opining: For the foregoing reasons, we are of the opinion that in cases where constitutionality and/ or interpretation of any legislation, be it made by the Parliament or an executive authority by way of delegated legislation, is in question, it would be idle to contend that a court of super ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and security and certain amount of reasonableness in the rent. Escalation of prices in the urban properties, land, materials and houses must be rationally checked. This country very vitally and very urgently requires a National Housing Policy if we want to prevent a major breakdown of law and order and gradual disillusionment of people. After all shelter is one of our fundamental rights. New national housing policy must attract new buildings, encourage new buildings, make available new spaces, rationalise the rent structure and rationalise the rent provisions and bring certain amount of uniformity though leaving scope for sufficient flexibility among the States to adjust such legislation according to its needs. This Court and the High Court should also be relieved of the heavy burdens of this rent litigations. Tier of appeals should be curtailed. Laws must be simple, rational and clear. Tenants are in all cases not the weaker sections. There are those who are weak both among the landlords as well as the tenants. Litigations must come to end quickly. Such new Housing Policy must comprehend the present and anticipate the future. The idea of a National Rent Tribunal on an All Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy of Government of India. Therefore, the balance of rights would be fully restored if and when Urban Rent Control Laws, as they presently exist are repealed and contracts between tenants and landlords are governed by the law of the land subject to such special provisions as may be required to regulate such contracts given their specific nature. In these circumstances the Administration's notification dated 7.11.2002 is a step towards improving the balance of rights between landlords and tenants. As regards the limit of exemption, which is Rs. 1500/- p.m. it has been brought out that in various other States similar exemptions are in the range of Rs. 1000-3500 p.m. Specific mention has been made of Section 3 of the Punjab Rent Act, 1995 which has not so far been notified by Government of Punjab, but wherein the State Government would have to notify the exemption for properties that have a deemed monthly rent above certain limit, that limit being between Rs. 1500-3500/-. The Chandigarh Administration's notification limit of Rs. 1500/- is in line with the range mentioned in the Punjab Act of 1995. As such it will not be in public interest to alter this limit. It was furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form front, for which a Memorandum of Agreement is to be signed between the State Government and Government of India. I enclose the draft of the MoA (Annexure II). x x x 3. The specific actions to be taken by the States are indicated in the separate note at Annexure III. The first installment, equal to 1/3rd of the eligible amount, will be released on the State signing the MoA, to be followed by two further installments for the financial year which will be based on the progress in implementing the agreed reform calendar, as indicated in Annexure III. We will also provide Guidelines for the reform items, for which an Expert Committee is at work. It may please be noted that "for purposes of release of funds the total package is to be taken into account and not any individual component". 4. You will agree that the reforms which have been mentioned in the Budget Speech and in this letter are long overdue in the urban sector. The incentive Fund only highlights them and encourages their adoption. The over-all intention is to encourage construction of housing including rental housing, to reduce transaction costs and delays in property transactions, to provide for easier av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re years will be based on implementation of the agreed schedule of reform in respect of existing tenancies. [Emphasis supplied] Union of India, in its affidavit filed before the High Court, had referred to its letter dated 10.12.2002. The Joint Secretary, Finance, Chandigarh in response thereto by letter dated 23.12.2002 informed the Central Government about issuance of the said notification dated 7.11.2002 and the background thereof. Notifications issued in respect of the city of Chandigarh and issued under Section 3 of the Act of 1949: 30. Let us now consider some of the notifications to which our attention has been drawn by Mr. Nariman which were applicable to the city of Chandigarh and issued under Section 3 of the Act. A press note was issued on 23rd May, 1959 by the Government of Punjab exempting the city of Chandigarh from the operation of the Act for a period of 25 years, the reference whereof, has been made in a Full Bench judgment of the Punjab and Haryana High Court in Dr. Harikishan Singh v. Union of India and Ors. The said press note was found to be invalid in law by the High Court. On or about 24.9.1974 a notification was issued by the Chief Commissioner under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, we would consider the applicability of the decisions of this Court in this case hereinafter. The applicability of the said decision vis- the notifications which fall for consideration therein would be noticed by us. Notifications issued by other States: 33. The Government of Rajasthan issued notification dated 19.5.1976 exempting the properties of Wakf Board which has been upheld by this Court in Tharumal and Anr. v. Masjid Hajum Pharosan Va Madras Talimul Islam, Mirza Izsmail Road, Jaipur [1994]3SCR263 . The Andhra Pradesh Government has issued a notification dated 29.12.1983 under Section 26 of the Andhra Pradesh Buildings (Lease, Rent & Eviction) Control Act, 1960 exempting all buildings fetching rental of Rs. 1,000/- from the purview of the Act w.e.f. 26.10.1983. The validity of the said notification came up for consideration before a learned Single Judge of the Andhra Pradesh High Court in Writ Petition No. 8081 of 1986. Following a Division Bench decision of the said Court in Buywell Corporation v. Mahadevmal 1988 APLJ 1 345 the said writ petition was dismissed. Statutes exempting application of the Act: 34. Mr. Nariman has drawn our attention to the amendments i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were mala fide. This Court noticed that the legislation was enacted for achieving three purposes: (i) the regulation of letting, (ii) the control of rents; and (iii) prevention of unreasonable eviction obtaining from the residential or non- residential buildings. 36. Before the High Court a memorandum, setting out the reasons why exemption was thought to be granted was filed, stating: (1) When the High Court offered in 1940 to lease out the premises in question for period of 21 years, Sri Chettiar elected to take it on lease only for period of seven years, which expired in 1947. As per the High Court's order in C.S. Nos. 280 to 286 of 1939, Sri J.H. Irani, father of Sri P.J. Irani took a lease of the premises for a period of 13 years 11 1/2 months from 1947 and he deposited Rs. 10,000/- towards the said lease. He is therefore entitled for the benefits from 1948 onwards. (2) Had not the Rent Control Act come into force, Sri P.J. Irani would have got possession in the ordinary course as per High Court's order and the terms of the lease deed. The operation of the Act is therefore really a hardship to him. (3) Sri Chettiar is only an absentee lessee and he is having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of P.J. Irani (supra), the expression used was "unreasonable eviction of tenants", in Punjab Act, the expression used was "eviction of tenants". But this Court found no distinction between the two Acts as one of the objects of the Acts was unreasonable eviction of tenants and the expression "unreasonable" thus was read in the title of the Rent Act. 38. So far as the first notification is concerned, the same has been upheld by this Court in Sadhu Singh v. District Board, Gurdaspur and Anr. (1969) RCR 156 following the case of P.J. Irani v. State of Madras and Anr. [1962]2SCR169 . In Sadhu Singh (supra) P.J. Irani was distinguished stating: The learned Counsel says that it may be that the decision of this Court in Irani's case concludes the question as far as Article 14 is concerned but different issues arise while dealing with the case of excessive delegated legislation. But, in our opinion, in this case the conclusion of the Court that enough guidance is afforded by the preamble and the operative provisions of the Act for the exercise of the discretionary powers vested in the Government also repels the argument regarding excessive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed opining: Before we can hold in favour of the State Government, we must be satisfied that the ground of exemption was germane to the policy of the Act. In this case there is no affidavit by any officer who had anything to do with the order granting exemption. The returns filed on behalf of the State Government do not throw any light on this question. It would appear that in granting the exemption the State applied merely a rule of thumb and issued the notification on the basis of the assertion by the trust that the entire rental income from the property was being applied to meet the expenses of the trust. Such a statement only allows an institution to apply for exemption under Section 3(2). By itself it is not enough. Any institution covered by Section 3(2) had to allege why it had become necessary for it to apply for exemption. It was not the case of the trust that they wanted to evict the tenants because they wanted the whole of the accommodation itself nor was it their plea that the income accruing to them was very low compared to prevailing rates of rent and that it was wholly inadequate for meeting the expenses of the trust. If grounds like these or other relevant g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication tries to balance the interests of the landlords on the one hand and of the tenants on the other in a reasonable way. We do not, therefore, agree with the submission that the notification either falls outside the object and policy of the statute or is discriminatory. [Emphasis supplied] Exemption from the application of the said Act was, thus, for a short period, and as such found to be in tune with the policy of the State. Had such exemption been for ever in favour of the landlords, the matter might have been otherwise. The validity of the said notification, therefore, was upheld because of the temporary nature of the statute. Even in the said case, the Act was directed to be applied prospectively and not retrospectively. 41. In Motor General Traders and Anr. v. State of Andhra Pradesh and Ors. [1984]1SCR594 , exemption was initially granted in favour of the landlords for a period of five years but the same was being extended from time to time. In that situation, this Court was of the opinion that while earlier the exemption granted to the tenants under Section 32(b) of the Act had short life and the concession should be tolerated for a short while, but having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , chandigarh v. Central Government. In M/s. Kesho Ram (supra) also exemption was granted for a period of five years and following P.J. Irani, Sadhu Singh and Punjab Tin Supply validity of the notification was upheld. 42. This Court upheld the validity of a notification in Parripati Chandrasekharrao & Sons v. Alapati Jalaiah [1995]3SCR817 on different ground. The questions which have been raised herein did not fall for consideration in the said decision. It is, therefore, not an authority for the proposition as to whether such a notification is ultra vires Section 3 of the Act or not. In that case, this Court was considering a question as to whether the right vested in the tenant can be taken away during the pendency of a proceeding as therein the High Court, while exercising its revisional jurisdiction held that the Rent controller had jurisdiction to interfere and decide the application filed by the tenant, upon arriving at a finding that the notification impugned therein had no application to the tenant's proceedings. The said view of the High Court was reversed by this Court opining that the right of a tenant could be taken away by such notification. 43. In S. Kandaswamy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the monthly rental for granting exemption from operation of the said Act most of the buildings in the Union Territory would be covered and what would be the effect thereof. 45. In this connection, our attention was drawn to a notice dated 30.11.2002 purported to be issued under Section 106 of the Transfer of Property Act on behalf of one Sarabjit Singh and Kamaljit Singh to his tenant Shri Brij Mohan Gaind wherein although monthly rent was Rs. 3000/-; damages were claimed @ Rs. 90,000/-. Yet again, in terms of a letter of an advocate dated 27.01.2003, issued on behalf of one S. Harcharan Singh Brar to M/s. Sodhi Boot House, wherein monthly rent was Rs. 2,100/-, but damages were claimed @ Rs. 2,00,000/- per month from the date of expiry of the notice period upto the date of handing over the possession. It was further shown that after the said notification was issued, the price of land have sky-rocketed. We, for the purpose of determination of the issue, need not go into the correctness or otherwise of the said contentions but we may only notice that they have not been specifically denied or disputed by Respondents. We, however, hasten to add that we would not intend to lay down a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with an amendment made by the Legislature to the following effect: 3. Act not to apply to certain premises - Nothing in this Act shall apply; (a) ... (b) ... (c) to any premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees; or.... The Court took notice of the materials brought on records of the case including the National Housing Policy leading to insertion of Sub-section (c) in Section 3 of the Delhi Rent Control Act. It also referred to the Statement of Objects and Reasons of the said Act. It was noticed that: The original proposal in the bill was to exempt from the purview of the Rent Act those premises whose monthly rent exceeded Rs. 1500. The legislature, however, after considering various factors, drew the dividing line at Rs. 3500. The Delhi Rent Control Act was amended in the year 1988, the Statements of Objects and Reasons whereof was as under: For quite some time, there have been demands from the associations of house-owners as well as tenants for amendment of Delhi Rent Control Act, 1958. The Committee on Petitions of Rajya Sabha, the Economic Administration Reforms Commission, Secretaries' Committee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the cut-off point for the purpose of classification and the legislature of necessity must have a lot of latitude in this regard. It is well settled that the safeguard provided by Article 14 of the Constitution can only be invoked, if the classification is made on the grounds which are totally irrelevant to the object of the statute. But, if there is some nexus between the objects sought to be achieved and the classification, the legislature is presumed to have acted in proper exercise of its constitutional power. The classification in practice may result in some hardship. But, a statutory discrimination cannot be set aside, if there are facts on the basis of which this statutory discrimination can be justified. 50. As regards the nexus for the ceiling limit of Rs. 3500/-, the Court observed that the exemption, with the passage of time, may not have any nexus with the objects sought to be achieved by the statute. But, it was for the legislature to decide which particular section of people requires protection at any given point of time. The persons who, as of then, were paying less than Rs. 42,000/- per year were considered to be belonging to weaker section. The wisdom of the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant that the legislature intends to protect and not the landlord or his building. The test adopted by the legislature for this purpose is with reference to the tenant's net income, whether accruing inside or outside the State, as on the date of the landlord's application for eviction as well as on the date of the decree for eviction. The legislative object is, therefore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of accommodation, employment opportunity and economic prosperity. This is a reasonable classification which does not suffer from the vice of being too vague or broad. Classification based on income is well known to law. Such classification has a reasonable relation to the twin legislative objects mentioned above. We see nothing unreasonable or irrational or unworkable or vague or unfair or unjust in the classification adopted by the impugned provision. Having noticed the notifications and the precedents operating in the field, we may notice the distinguishing features of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative policy: 53. Legislative Policy of a State can be gathered from the Preamble, the Statement of Objects and Reasons and the core provisions contained therein. It is, however, not much in dispute that the Rent Act was a beneficent legislation which sought to protect a category of the tenants occupying rented buildings specified therein not only from enhancement of rent, but also from unreasonable eviction. The Act furthermore provides for protection of the tenants from unreasonable harassment at the hands of the landlords. The Transfer of Property Act governed the field relating to eviction of all kinds of tenants. For eviction of a monthly tenant, 15 days' notice ending with the tenancy month, as envisaged under Section 106 thereof was sufficient to bring an action for a landlord to evict his tenant. The tenant, inter alia, could raise a defence of defect in the said notice in case eviction is sought for or applicability of other provisions thereof as also non-compliance of the other requirements contained therein. 54. The Transfer of Property Act does not contain any provision empowering any court to regulate enhancement of rent. No provision existed therein also for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the tenants was upheld on the ground that the legislation policy and principles may be found out from the preamble and provisions of the Act. Subba Rao, J., while expressing his dissention, opined: ...When the decisions say that the legislature shall lay down the legislative policy and its formulation as a rule of conduct, they do not mean vague and general declaration of policy, but a definite policy controlling and regulating the powers conferred on the executive for carrying into effect that policy. Both the majority and minority, therefore emphasized on the importance of the legislative policy which must not be vague and should be definite and bona fide. 56. It is equally well settled that a policy underlying the statute should be gathered from reading the statute, including its preamble as a whole. Once, however, the words used in statute have a plain meaning, the courts should not busy themselves to find out the supposed intention or the policy underlying statute. {See Sardar Gurmej Singh v. Sardar Partap Singh Kairon [1960]1SCR909 .} But we are herein concerned with somewhat a different question, viz., whether the impugned notification is violative of the legislative p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act through a subordinate legislation cannot control the transactions which fall out of scope thereof. We have noticed hereinbefore the effect of a power of attorney under the Indian Contract Act or the Power-of-Attorney Act. A subordinate legislation which is not backed up by any statutory guideline under the substantive law and opposed to the enforcement of a legal right, in our opinion, thus, would not be valid. Analysis: 59. The decisions of this Court clearly point out the distinctive features between the power of the Administrator in terms of a provision of the nature of Section 3 of the Act and the power of the legislature to amend the law. The executive government can exercise its power of exemption in the following circumstances: (1) Where such exemption had been granted only for a limited period; (2) in respect of new buildings; (3) in respect of the government buildings, buildings belonging to the local-self government and other public sector undertakings; and (4) areas belonging to the Cantonment Board which was outside the purview of the applicability of the original act having regard to the fact that such areas of the cantonment are governed by se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that most of the States had enacted temporary Acts which had been extended from time to time, was, thus, taken into consideration. Only because some exemption notifications had been issued under the Punjab Act by itself may not be a ground to follow the same blindly inasmuch as the Punjab Act applies to the entire State. There may not be any town in the said State which may be as important as Chandigarh and where the rental of the tenanted premises would be as high as in the said town. We have seen hereinbefore how the Administrator himself has described the status of Chandigarh. Despite the same, he equated Chandigarh with other towns of the State of Punjab. 62. The Administrator in issuing the notification has missed the relevance of the distinction between the National Housing Policy and the legislative policy. The power of exemption could be exercised having regard to the legislative intent and policy whereas the National Housing Policy could be given effect to by the legislature in modifying, varying or altogether doing away with the existing legislative policy and laying down a new policy therefore. Change of legislative policy with the aid of the National Housing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, it cannot be said that the Act sought to provide for a cut-off mark as regard the quantum of rent which could have been the subject matter of enhancement. However, it cannot be denied that having regard to the fact that the question as regard enhancement of rent was required to be considered by the Rent Controller with reference to rent payable when the Act came into force, hardly any relief could be granted in favour of the landlord. Appellants also in their writ petition stated: That at this stage, it is important to mention here that Sections 4 and 5 of the Punjab Act of 1949 are not applicable to Chandigarh, as no building existed in the year 1939. The Parliament, while enacting the East Punjab Urban Rent Restriction (Extension to Chandigarh) Act, 1974 intentionally did not provide fixation of fair rent or increase in the fair rent and gave more protection to the tenants of Chandigarh than the tenants of State of Punjab. 66. If the rental of Rs. 50/- cannot be considered to be a cut-off mark, the same by itself would not mean, as was contended by Mr. Venugopal, that exemption granted in respect of a building the rent whereof exceeds Rs. 1500/- would meet the object of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Rent Control Act had not been realised and it had various other adverse effects including simulation of investment in rental housing especially from the lower and middle income groups. A model Rent Control legislation was circulated in the year 1992 wherein proposal was made to give exemption to residential non-residential premises carrying more than specified rental of Rs. 1500/- per month. The Government of India had been advocating urban section reforms and had introduced an urban reforms incentive scheme whereunder funds are to be provided by it and to urban sector reforms such reform was to be carried out for removing the rental laws. However, National Housing Policy itself suggests that the existing rent control laws were to be repealed. The National Housing Policy, it was proposed, should be achieved step by step so as to enable the States to enact a permanent law. What was, therefore, contemplated was amendment of the existing legislation by the legislature so as to achieve partial repeal of the Act. The National Housing Policy or the Central Government did not and could not recommend that what can be done only by the legislature, can be achieved through the route o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government or local authority or the Board are not in need of such protection as the tenants of private landlords are and this circumstance is a cogent basis for differentiation. The two classes of tenants are not by force of circumstances placed on an equal footing and the tenants of the Government or local authority or the Board cannot, therefore, complain of any denial of equality before the law or of equal protection of the law. 73. Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay [1989]2SCR751 is another instance where the Court placed faith on the public sector stating: The field of letting and eviction of tenants is normally governed by the Rent Act. The Port Trust is statutorily exempted from the operation of the Rent Act on the basis of its public/governmental character. The legislative assumption or expectation as noted in the observations of Chagla, C.J. in Rampratap Jaidayal case cannot make such conduct a matter of contract pure and simple. These corporations must act in accordance with certain constitutional conscience and whether they have so acted, must be discernible from the conduct of such corporations. In this connection, reference ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legislative policy and the object and purport of the Act. The criterion which was required to be considered was not as to what rent a building could have fetched in 1978 but what would have been a fair criterion as regard the quantum of rent when the notification was issued. For that purpose, no data has been collected nor has any study been made. As to how the said criterion had been fixed is not known. Except stating that the rent of Rs. 1500/- to Rs. 3500/- was made the criterion in terms of the National Housing Policy, the Administrator did not assign any other reason. 76. If the contention of Appellants is correct that in Chandigarh 99% of the lands have already been leased out, the scope of applicability of the new housing scheme might not be of much relevance. The Administrator while issuing the impugned notification misdirected himself in law insofar as he failed to take into consideration that he could not have exercised any jurisdiction in terms thereof as the National Housing Policy, inter alia, contains the guidelines for the State legislatures for enactment of law and the same was not meant to be taken recourse to by the Executive Government of the State. Whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tenancy. On some occasions, only the same can be interpreted differently having regard to change in time. But, it was not for the executive government to do so. They have not been repealed. Repealing of such acts can be brought about by the competent legislature. What would be the legislative policy in relation thereto was within the exclusive domain of the Central Government. The Constitution of India, having regard to the provisions of Articles 245 and 246 of the Constitution of India clearly demarcate the fields of legislation and, thus, it would not be correct to contend that only because that the Central Government has changed its economic policy, the same must be reflected in all the legislative fields occupied by the State legislature. 78. In D.C. Bhatia (supra), this Court clearly held that what can be done by the legislature cannot be done by the delegate. Yet again, in B.K. Industries and Ors. v. Union of India and Ors. this Court clearly opined that by reason of such notification the delegate cannot take recourse of the virtual repeal of the Act. Having regard to the fact that the rental of Rs. 1500 per month for the town of Chandigarh was too low a rent, the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble only to a large section of the tenants. 81. Moreover, the notification has not been issued for a limited period. It will have, therefore, a permanent effect. Submission of Mr. Nariman that having regard to the provisions of the General Clauses Act, the same can be modified, amended at any time and withdrawn, cannot be accepted for more than one reason. Firstly, Respondent proceeded on the basis that the said notification has been issued with a view to give effect to the National policy, i.e., amendments must be carried out until a new Rent Act is enacted. Whether the Act would be enacted or not is a matter of surmises and conjectures. It would be again a matter of legislative policy which was not within the domain of the Administrator. Secondly, the Administrator in following the National policy proceeded on the basis that the provisions of the Act must ultimately be repealed. When steps are taken to repeal the Act either wholly or in part, the intention becomes clear i.e. the same is not meant to be given a temporary effect. When the repealed provisions are sought to be brought back to the statute-book, it has to be done by way of fresh legislation. In any event, the General ..... X X X X Extracts X X X X X X X X Extracts X X X X
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