TMI Blog2006 (11) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... ether 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 A statute can be amended, partially repealed or wholly repealed by the legislature only.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, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefor. What was necessary to be applied was 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 observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4688 OF 2006, [Arising out of S.L.P. (Civil) No. 1804 of 2005] W I T H CANO. 4689 OF 2006 @ S.L.P.(Civil)No.1810/2005, 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 exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates of local authority but prohibits increase thereof on account of payment of other taxes. Section 10 provides that the landlord without 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 Restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '. Pursuant thereto an additional affidavit was filed on 29th July, 2004 wherein, inter alia, reference was made to the National Housing 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) By reason of such delegation, the delegate cannot in effect and substance repeal the provisions of the main Act so as to take away the heart and soul of beneficent legislations like the Rent 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 ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while considering the legislative policy, that several amendments have been carried out by the legislature to mitigate the hardships of the landlords and as the delegate has acted keeping in view the legislative history, 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation by supplying details within the limits prescribed by the statute and in the case of conditional legislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute except the requirement of natural justice also apply to the exercise of power of delegated legislation. Rules made under the Constitution do not qualify as legislation in true sense and are treated as subordinate legislation and can be challenged in judicial 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 , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiating between different classes of workmen of the same unit. {See also Nedurimilli Janardhana Reddy v. Progressive Democratic Students' Union and Ors. (1994)6SCC506 , Agricultural Market Committee v. Shalimar Chemical Works Ltd. AIR1997SC2502 , Additional District 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressly or by necessary implication are required to be taken into consideration by the statue or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19(1)(a) of the Constitution. 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, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accommodation for limited periods on certain safeguards which will strictly ensure their recovery when wanted. Men with money should be given proper and meaningful incentives as in some European countries to build houses, tax holidays for new houses can be encouraged. The tenants should also be given protection 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, rationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avit at some details. In the said additional affidavit, it was stated: ...Given the nature of Rent Control Laws, it is submitted that the balance of rights of landlords and tenants is tilted in favour of tenants by these laws resulting in deleterious economic and social consequences as noted in the Urban Reforms Policy 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 exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced the creation of an Urban Reforms Incentive Fund with an outlay of Rs. 500 crore for the year. During finalization of the size of Annual Plan of your State, the Planning Commission has indicated the amount out of this Fund, as part of State's share of resources (vide Annexure-I). However, actual release is to be based on action on the reform 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination of tenancy without recourse to litigation, v. To create an Authority and provide guidelines to fix rents on the basis of market rates in respect of existing tenancies. Action in the Year 2003-04 : The policy on existing tenancies should be brought into effect through appropriate legislative changes; in the second year of the scheme. Release of URIF in future 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. Indisputably, the validity of some of the aforementioned notification has been upheld by this Court in Punjab Tin Supply Co., Chandigarh and Ors. v. Central Government and Ors. [1984]1SCR428 , Kesho Ram Co. and Ors. Etc. v. Union of India and Ors. [1989]2SCR1005 , Firm Amar Nath Basheshar Dass v. Tek Chand [1972]3SCR922 and Sadhu Singh v. District Board, Gurdaspur and Anr. (1969) RCR 156 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 va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal there against, although, upheld the validity of Section 13 of the Act but opined that the notification in question was bad in law. An order made under Section 13 of the Act was held to be amenable to judicial review on three grounds : (1) If it was discriminatory, (2) If it was made on grounds which were not germane or relevant to the policy and purpose of the Act; and (3) if it was made on grounds which 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld in various judgments of this Court which we have noticed hereinbefore in those cases also, as for example in Sadhu Singh (supra), Punjab Tin Supply Co. (supra) and Kesho Ram (Supra), the ratio of P.J. Irani (supra) was followed. In Sadhu Singh (supra) while upholding the notification of exemption granted in favour of the District Board by this Court, a distinction was sought to be made that whereas in the Madras Act which was applicable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the third round of litigation initiated by tenants in challenging Section 3 of the East Punjab Rent Restriction Act, 1949 and notifications issued thereunder for the purpose of granting exemption to the newly constructed buildings in the urban areas for a period of five years from the operation of the provisions of the Act. 39. In State of Madhya Pradesh v. Kanhaiyalal and Ors. 1969 RCJ 695 P.J. Irani and Sadhu singh were 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 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f persons who have no accommodation to reside or to carry on business and it cannot be considered as discriminatory or arbitrary or unreasonable in view of the shortness of the period of exemption available in the case of each exempted building. The exemption granted for a period of five years only serves as an incentive as stated above and does not create a class of landlords who are forever kept outside the scope of the Act. The notification 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 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to take action by amending the Act itself or under Section 26 of the Act, as the case may be, not only to provide incentive to persons who are desirous of building new houses, as it serves a definite social purpose but also to mitigate the rigour to such class of landlords who may have recently built their houses for a limited period as it has been done in the Union Territory of Chandigarh as brought out in our recent judgment in Punjab Tin Supply Co., 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 proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted building. Section 3 refers to `a building'. While constituting the term 'building', it is to be read as 'rented building' and having regard to the definition of 'building', a part of the building would also come within the purview thereof. In that view of the matter, rent of a building, which has been let out, would be a relevant criteria for classification of the tenanted premises. The question, however, is whether by fixing Rs. 1500/- as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held to be intra vires in Delhi Cloth General Mills etc. v. S. Paramjit Singh and Anr. etc. AIR1990SC2286 . Indisputably the legislature of a State has the requisite legislative power therefore. The question, however, which falls for our consideration is as to whether such exemption could be granted by an executive order issued under Section 3 or only by way of an amendment. 48. We would, for the said purpose, notice D.C. Bhatia (supra) in some details. This Court, therein was dealing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only to those premises in respect whereof rent payable was upto Rs. 3500/- per month but also decided not to extend the statutory protection to the premises constructed on or after the date of coming into operation of the Act for a period of ten years. It was categorically held that as the Legislature could repeal the Rent Act altogether, it could do so also step by step. The said amendment was found to be one of the steps for repealing the Act opining: In our view, it is for the legislature to decide what should be 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 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said provision came up for consideration before this Court in C.N. Rudramurthy v. K. Barkathulla Khan and Ors. (1998)8SCC275 , wherein D.C. Bhatia (supra) was followed. We need not, therefore, deal with the ratio in the said decision separately. 51. The legislature of Jammu and Kashmir amended Section 3(iii). The classification of tenants on the basis of income made therein was upheld by this Court in Delhi Cloth General Mills etc. v. S. Paramjit Singh and Anr. etc. AIR1990SC2286 in the following terms: ...It is the tenant 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 opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and presumably for that reason the preamble uses the word certain premises . The definition of building in the Act provides for a broad meaning. It includes out houses, go-downs, furniture, except a room in a hotel, hostel or boarding house. The types of premises to which the said Act would apply, thus may be found out from the definition of 'building' itself. Unlike similar legislations enacted by other State Governments, the Act is not a temporary Act. It is indisputably in force for a period of more than 57 years. Legislative 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 ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Spg. Wvg. Co. Ltd. and Ors. [2001]1SCR221 .} Preamble of a statute, as stated in State of Rajasthan and Ors. v. Basant Nahata (supra), however, provides for a key to understand it. It, together with the Statement of Objects and Reasons which are called heart and soul of the statute, may have to be considered in a given situation for the purpose of giving effect thereto. 55. In Vasantlal Maganbhai Sanjanwala v. State of Bombay and Ors. 1978CriLJ1281 a provision empowering Provincial Government to fix a lower rent of the maximum rent payable by 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 sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of delegation of essential legislative function, this Court opined: There cannot be any doubt whatsoever that the court shall not invalidate a legislation on the ground of delegation of essential legislative function or on the ground of conferring unguided, uncontrolled and vague powers upon the delegate without taking into account the preamble of the Act as also other provisions of the statute in the event they provide good means of finding out the meaning of the offending statute. It was further held: Hence, Section 22-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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factors have been taken into consideration. Another test which can be applied is as to whether the notification is otherwise malafide in the sense that the same has been used for unauthorised purpose. The Administrator is said to have taken into consideration the National Housing Policy, which was circulated as far back in the year 1992. Such a balancing procedure indisputably was recommended to be done by way of legislation and not by executive action. The National Housing Policy recommended for step by step repeal of the Act and substituted the same by a new permanent Act. By reason thereof 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. Desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even in respect of the buildings, which came into existence after 1965- 66, is permissible. 65. When the 1949 Act was passed, there was no 'building' in Chandigarh within the meaning of the said Act. In terms of Section 4(3)(i) (ii) of the said Act, the increase in the basic rent was contemplated where the rate of rental was Rs. 25/- to Rs. 50/-. It may not, thus, be correct to contend that Sections 4, 5 and 6 of the Act did not provide for enhancement of rent at all. Any rent which exceeded a sum of Rs. 50/- would also come within the purview of Section 5 of the Act but by reason thereof, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. It was conceived as a measure to overcome shortage of rental accommodation in the wake of Second World War and the influx of refugees following partition. The Union of India also accepts that the object of the State Act to provide for control and regulation of the rental housing market, determination of fair rent, protection of tenants against indiscriminate eviction at the hands of landlords and the rights of the landlords for recovery of tenanted premises in specific cases. The reasons for which the impugned notification was issued was stated to be that the social objective 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that they would not unreasonably enhance the rental of the premises and they would conduct themselves in such a manner so as to make a tenant feel that they would be subjected to unreasonable eviction. 72. In Baburao Shantaram More v. Bombay Housing Board and Anr. [1954]1SCR572 , this Court has held: It is not to be expected that the Government or local authority or the Board would be actuated by any profit-making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords are or are likely to be. Therefore, the tenants of 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould come within the scope of judicial review. 75. We, however, cannot accept the submission that as Appellants themselves in the writ petition contended that as in the year 1978 a building standing on a land of 1500 square yards with 3 to 4 bed rooms, one drawing and dining room, garage and servant quarter, was available on a monthly rent of Rs. 1000/-and, thus, on that premise a presumption can be raised that such tenanted premises used to be occupied by the affluent families, those who are paying less than Rs. 1500/- continued to be protected and, thus, the same would come within the purview 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be applied in a manner not contemplated under our constitutional scheme. A new legislative policy indisputably was framed having regard to the new economic policy of the Central Government as was formulated in the year 1991. However, by reason thereof only it cannot be said that the social justice doctrine, as adumbrated in the preamble of the Constitution, need not be given effect to under any situation. Social justice legislations and other legislations beneficent to the weaker sections of the country are still on the statute book. The rent Acts would continue to control the terms and conditions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the Act applies only to certain classes of land and building but the same would not mean that the Administrator is free to take any action in any manner he likes. The action of the Administrator is indisputably subject to judicial review. It is also true that the term 'building' having regard to its definition would mean tenanted building and, thus, the building fetching a rent to a prescribed extent can form the base for determining criterion for the purpose of classification but the same would not mean that the Administrator would be entitled to lay down a criterion which would be applicable 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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