TMI Blog1961 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of pleas were raised by the appellant but it is not necessary to notice all of them excepting those which were ultimately agitated before the learned Single Judge. There please were: (1) that Section 3 of the East Punjab Urban Rent Restriction Act (III of 1949)-here in after referred to as the Act-under which exemption has been given from the provisions of the Act to Government premises is ultra vires the Constitution of India; (2) that the notification exempting all government buildings under Section 3 of the Act is outside the scope of Section 3 and, therefore, the applicability of the Act cannot be ruled out; (3) that the appellant is a permanent tenant; and (4) that the appellant had incurred huge expenses in improving the premises on the belief that he was to continue as a lessee for a considerable period and, therefore he could not be evicted with compensation being paid to him for the improvements effected by him. The trial Court decreed the suit on the 19th of November, 1953, and on appeal by the present appellant the trial Court's decree was a firmed on the 31st of August 1954. A second appeal was preferred to this Court and the appeal was rejected as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in favour of the landlord holding that the premises were constructed in 1956 and, therefore, were exempt from the provisions of the Act and on appeal the District Judge reversed the decision of the trial Court holding that the premises were not constructed in 1956 inasmuch as they were merely remodeled. These very points have been agitated before us and will be dealt with in the same order. Regular Second Appeal No.1558 of 1960: (5) This case came up for hearing before Gurdev Singh, J., and by his order dated the 21st of November, 1960, it has been directed to be heard along with Regular Second Appeal No. 1816 of 1959. In this case the suit was filed by the landlord for the ejectment of a tenant from a shop situate in Chandni Chauk Bazar, Sirsa, and for recovery of ₹ 250/- as rent for use and occupation. The premises were let out on the 11th of August, 1956 at a rental of ₹ 1,000/- for a period of one year. The possession was given on the 22nd of August, 1956, and the period of one year was to end on the 21st of August, 1957. The shop was with the tenant previously, but it was got vacated in the year 1956 for re-construction and thereafter it was reconstru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egation of legislative functions. In other words, the contention raised is that Section 3 of the Act delegates powers to the Provincial Government to exempt certain buildings or certain class of buildings from the operation of the Act and this power is unfettered and uncanalised and as no guidance has been afforded for its exercise in the Act, it suffers from the vice of excessive delegation and, therefore, Section 3 is void. On the other hand, it is contended by the counsel for the landlord that Section 3 is a piece of conditional legislation and not delegated legislation and therefore, a valid piece of legislation. It is further urged that even if it be held to be a piece of delegated legislation, it is a valid piece of legislation inasmuch as in the body of the Act, there is enough guidance for the exercise of the power under the impugned provision. (10) So far as the principles of law regarding delegated legislation are concerned, they have now been settled by a series of decisions of their Lordships of the Supreme Court and I need at this stage refer only to two of them, namely, Hamdard Dawakhana v. Union of India, AIR 1960 SC 554 and Vasanlal Maganbhai v. State of Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend. There are many things upon which wise and useful legislation must depend which cannot between to the law making power, and, must therefore be subject of enquiry and determination outside that hall of legislature. (In Lock's Appeal 72 pa. 491; Field and Co. v. Clark, (1892) 143 US 649). But the discretion should not be so wide that it is impossible to discern its limits. There must instead be definite boundaries within which the powers of the administrative authority are exercisable. Delegation should not be so indefinite as to amount to an abdication of the legislative function. Schwarz-American Administrative law page 21. In an Australian case relied upon by the learned Solicitor General the prohibition by proclamation of goods under Section 52 of the Customs Act, 1901, was held to be conditional legislation: Baxter v. Ah Way (1909) 8 CLR 629 at pages 634, 637, 638. According to that case the legislature has to project its mind into the future and provide as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments afford a satisfactory basis for holding that the legislative policy and principle has been enunciated with sufficient accuracy and clarity the preamble itself has been held to satisfy the requirements of the relevant tests. In every case, it would be necessary to consider the relevant provisions of the Act in relation to the delegation made and the question as to whether the delegation is intra vires or not will have to be decided by the application of the relevant tests. It will also be useful to set out two passages from the dissenting judgment of Subba Rao, J. in Vassanlal's case, AIR 1961 SC 4 to complete the picture. The learned Judge has relied on the previous decisions of the Supreme Court and has, on the basis of the same, stated his conclusions. The relevant passages are at pages 10 and 11 of the report and are in these terms:-- The leading decision on this subject is in re Article 143 Constitution of India and Delhi Laws Act. 1912 etc., 1951 SCR 747 : (AIR 1951 SC 332). There the Central Legislature had empowered the executive authority under its legislative control to apply at its discretion the laws to an area which was also under the legislative away o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he majority judgment in the Delhi Laws Act case, 1951 SCR 747: (AIR 1951 SC 332) that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct.' In Edward Mills Co. Ltd., Beawar v. State of Ajmer, 1955-1 SCR 735: ((S) AIR 1955 SC 25), Mukherjea, J. as he then was, speaking for the Court stated the principle thus at page 749 (of SCR) : (at page 32 of AIR): 'A Legislature cannot certainly strip itself of its essential functions and vest the same on an extraneous authority. The primary duty of lawmaking has to be discharged by the Legislature itself but delegation may be resorted to as a subsidiary or an ancillary measure.' The latest decision on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self-effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegations. It is for a Court to hold on a fair generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power on executive authorities. It is the duty of the Court to strike down without any hesitation any blanket power conferred on the executive by the legislature. As already observed, the principles as to when a piece of legislation can be said to be delegated legislation are well settled and admit of no dispute, but the real difficulty that lies is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar class of persons to whom it shall be applied This is what has been held by the Privy Council in a long line of cases right from 5 Ind App 178 (PC) to AIR 1945 PC 48. These cases and (1909) 8 CLR 626 to which we have already referred, directly support our view. In the last mentioned case, the power conferred upon the Governor-General in Council to declare by proclamation what goods shall be prohibited from import was challenged on the ground that it amounted to delegation of legislative power. The quotation we have already given from the judgment of O' Connor J., contains the reasons upon which the delegation so made was held not to be that of a legislative power at all and so valid. This decision was followed by the Madhya Pradesh High Court in L. M. Wakhare v. The State, AIR 1959 Madh Pra 208. We are in respectful agreement with these observations particularly when the impugned provision and the provision in the aforesaid cases are almost identical. (13) It is not disputed and indeed it could not be in view of any number of decisions of the Privy Council and the Supreme Court, for instance, ILR 4 Cal 172 (PC), AIR 1960 SC 554 and AIR 1961 SC 4 that delegation of powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of repeal. In our opinion, that would not be so. Repeal implies obliteration of the statute while exemption merely implies suspension of the statute for the time being. As already stated, the statute remains on the statute book, a result which is unknown to repeal except for thing suffered or done thereunder Mr. Avasthy, however, realised the fallacy of his argument and did not seriously press the same. Therefore, both on authority and on principle we are of the view that the impugned provision cannot be said to be a legislation and, if at all it is legislation, it is merely a piece of conditional legislation. (16) The substantial contention of Mr. Avasthy was that the impugned provision is a piece of legislation and as power has been delegated to the Government to exempt from the statute any particular building or class of buildings and as no guiding principle or policy an be gathered from the statute for the exercise of the power, Section 3 suffers from the vice of excessive delegation and is, therefore, void piece of legislation. For this contention, the learned counsel strongly relies on Hamdard Dawakhana's case, AIR 1960 SC 554. We have already dealt with one part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons * * * * *. In equalities which result from a singling out of one Particular class for taxation or exemption infringe no constitutional limitation * * * *. Like considerations govern exemptions from the operation of a tax imposed on the members of a class. A legislature is not bound to tax every member of a class or none. It may make distinctions of degree having a rational basis and when subjected to judicial scrutiny they must be presumed to rest on that basis if there is any conceivable state of facts which would support it.' These last observations succinctly bring out the two important features about exemption provisions contained in any Act of the Legislature. The propriety of the exemption from the stand-point of the basis underlying such exemption is open to judicial review. There may be exemptions which would be struck down by the Court as unconstitutional because they are not based on any reasonable ground intimately connected with the objects of the legislation. The Legislature is free to make classifications in the application of a statute which are relevant to the legislative purpose. The ultimate test of validity is not whether the classes differ but whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 13 of the Madras Buildings (Lease and Rent Control) Act. There are bound to be cases in which an inflexible application of the provisions of the Act may result in unnecessary hardship not contemplated by the legislature. I would even go further and say that the enforcement of the provisions of the Act may amount to an unreasonable restriction on the exercise of the right conferred by Article 19 of the Constitution. It is eminently desirable that there should be some authority vested with the power to make exceptions to the general application of the Act and its provisions in proper cases. If so there could be no better body than the State Government, on whom such power could be conferred. The Special Courts decisions of the Supreme Court have one feature which should not be overlooked. All these decisions proceed on the conclusion that the special procedure prescribed for the trial of offences by the special Courts deprived the accused person of certain valuable privileges and advantages to which they were entitled under the general criminal procedural law. The question was whether the Government could deprive an accused of such privileges and advantages in an arbitrary mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the increase in fair rent where some addition, improvement or alteration has been carried out at the landlord's expense. Section 6 debars the landlord from claiming any rent in excess of fair rent. Section 7 is the penal section where under no premium can be charged for renewal of the tenancy, Section 8 deals with the recovery of rent, which should not have been paid. Section 9 deals with the increase of rent on account of payment of rates etc., to local authorities. Section 10 prevents the landlord from interfering with the amenities enjoyed by the tenant. Section 11 prohibits the conversion of a residential building into a non-residential building. Section 12 authorises a tenant to effect repairs, on the failure of the landlord to do so. Section 13 provides ground for the eviction of tenants and Section 18 provides for particulars to be furnished to the Controller by the landlord and the tenant. The framework of the Act, therefore, is to restrict the rent and evictions, and the exemption under Section 3 is in relation to this. If the provisions of the Act are read as a whole along with the prevailing circumstances when the Act was brought into being, namely, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower is capable of abuse, for that all power can be abused, would be no ground to strike down the provision conferring the power as unconstitutional. In this connection, reference may be made to the decision of the Madras High Court in Globe Theatres case AIR 1954 Mad 690 at page 696, where the learned Chief Justice observed as under: In that connection, I quoted a passage from Willis' Constitutional Law in which the learned author expressed his opinion that the best view to take was that due process and equality were not violated by the mere conference of unguided power but only by its arbitrary exercise by those upon whom conferred. The following further statement of the learned author appealed to me then and appeals to me now: 'If a statute declares a definite policy, there is a sufficiently definite standard for the rule against the delegation of legislative power, and also for equality, if the standard is reasonable. If no standard is set up to avoid the violation of equality, those exercising the power must act as though they were administering a valid standard. For this reason, there is need for a judicial review to see whether or not the power delegated has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. In this view of the matter we are of the view that Section 3 of the Act cannot be struck down as offending Article 14 of the Constitution. Mr. Justice Dua in Dalip Singh Arjan Singh v. Rakha Ram, AIR 1960 Punj 176 has dealt with the question whether the notification under Section 3 is ultra vires Article 14 of the Constitution and has held that this notification does not offend Article 14. We are in respectful agreement with this decision. (20) Mr. Avasthy strongly relied on the decision of this Court in Associated traders and Engineers v. State of Punjab, 57 Pun LR 304 and the decisions in Hamdard Dawakhana's case. Air 1960 SC 554, Dwarka prasad v. State of Uttar Pradesh, AIR 1954 SC 224, Banarsi Dass v. State of Madhya Pradesh, AIR 1958 SC 909 Sarat Chandra v. Corproation Calcutta, AIR 1959 Cal 36, and Parashram Damodhar v. State of Bombay, (S) AIR 1957 Bom 252. So far as the last mentioned Bombay decision is concerned it was overruled by the Supreme Court in Sri Ram Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose or not, including any land, godowns, out-houses, or furniture let therewith, but does not include a room in a hotel, hostel or boarding-house; In the Punjab Municipal Act, Section 3(2) defines building in these terms: 'building' means any shop, house, hut, outhouse, shed or stable, whether used for the purpose of human habitation or otherwise and whether of masonry bricks, wood, mud, thatch, metal or any other material whatever, and includes a wall and a well. The definition of 'building' in the Rent Restriction Act covers a part of a building which is let to a tenant. Therefore, the unit is the building in possession of the tenant though it is only a part of the building. This is a special definition enacted for the purposes of the Rent Restriction Act, the object of the Act being to prevent eviction of tenants and to restrict the charging of excessive rent. At one time, the learned counsel sought to make a distinction between reconstruction and construction, but later on they realised the futility of the argument and were agreed that construction and reconstruction are interchangeable terms and the only difference is that the pharse 'const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new roof constructed or entire walls or substantial portions of the walls are taken down and reconstructed, these are so much like new building operations, though not tantamount to fresh building, that they are readily understood to amount to re-building. Our attention has been drawn to the definition of re-building which has been attempted to be given by P. B. Mukharji J., in Ramesh Chandra Bhattacharjee v. Nagendra N. Mullick, 85 Cal LJ 324: (AIR 1951 Cal 435). After discussion of a number of English cases, P. B. Mukharji, J., observed: 'The interpretation of the words 'building' and 're-building' should, in my view, be such in this case as is consistent with the purpose and context of the Rent Acts of 1948 and 1950. In the light of the scheme and purpose of the Rent legislation one test by which to detine 'building' and 're-building' is this that it should be of such a nature that will require displacement of the tenant. In other words, the 'purpose' or 'building' or re-building' within the meaning of the Rent legislation must be of such a nature as cannot be carried out if the tenant remains in occupation of the premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing observations: In cases of this kind it is apt to be dangerous to take each individual item entirely in isolation, and then to say that each item so taken cannot itself be a work of reconstruction or a substantial work of reconstruction. One must look at the whole work which is proposed and then say in regard to it: Does it amount to a substantial work of reconstruction? When one views in that way what is here proposed it does. I think, amount, within the meaning of the paragraph, to a work of reconstruction of a substantial part of the premises. I lay considerable emphasis on that part of the work which consists of the substitution of the transverse walls by the proposed girders resting on pillars; I also think, with respect to the learned county court judge, that he gave some what too little emphasis to the floor; because what is proposed is not merely the making of a new floor, but the sinking of the floor, not a great deal, but by a distance of some eight inches, which produces an appreciable increase in the total space of what was, and is at present, the tenant's holding. Lord Justice Romer, who delivered his separate opinion, observed as under: I agree, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings amount to repairs, the notification will not apply for then it will not amount to construction of a building. While dealing with the question as to what is repair as distinct from renewal or replacement a Division Bench of the Madras High Court in Commissioner of Income-tax, Excess profits Tax, Madras v. Rama Sugar Mills Ltd. Bobbili, AIR 1952 Mad 689 made the following observations: A renewal may be a repair or a reconstruction. Renewal is a repair if it is only restoration by renewal or replacement of subsidiary parts of a whole. If, on the other hand, it amounts to a reconstruction of the entirety or of substantially the whole of the subject-matter it is not a repair but a reconstruction. The test, therefore, which decides the question whether a thing is a 'repair' or not is to see whether the act actually done is one which in substance is a replacement of defective parts or a replacement of the entirety or a substantial part of the subject-matter. Therefore, as already observed, in each case it is a question of degree as to when any construction and substantial repairs would amount to a construction of a building within the meaning of the notification. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now sought to be supported on the ground of estoppel. In our view, there can be no question of estoppel, particularly when there is a clear prohibition under Rules 4(2) and 4(3), Part VII of the Rules which are in these terms: 4(2) No District Board to whom any property of Government has been transferred for management shall cause any repairs or alterations to such property to be carried out in a style differing from that of the original work without the consent of the Punjab Government in the Public Works Department. ''4(3) No District Board in whom any land of Government vests or to whom any land of Government has been transferred for management shall cause of suffer any buildings of a permanent nature to be constructed on such land, or shall cause or suffer such land to be diverted permanently from its existing use, without the consent of the Punjab Government. No act on the part of the District Board has been proved which has made the lessee to alter his position on the basis of any representation by the District Board. In any case, if he has made any improvements he has fully reaped the benefit thereof for he has continued to be in possession of the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing a decree; whether that decree can or cannot be executed is another matter and that question the executing Court will determine. If on the day the executing Court will determine. If on the day the execution is sought, the provisions of the Act apply we have no doubt the executing Court will refuse to execute the decree, but we are not here called upon to pronounce on this matter and it must necessarily be left for determination to the executing Court as and when that contingency arises. (32) We have dealt with the matters raised in this second appeal and for the reasons recorded above, this appeal fails and is dismissed, but in the circumstances of the case, the parties are left to bear their own costs throughout. Regular Second Appeal No. 1558 of 1960. (33) So far as the argument as to the vires of Section 3 of the Act is concerned, we have already dealt with the same. With regard to the remaining question in this appeal, namely, that the building has not been constructed within the meaning of the notification, it may be stated that both the Courts below have found that the building was constructed within the meaning of the notification, and, therefore, have decreed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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