VASU DEV SINGH AND ORS. v. UNION OF INDIA AND ORS.

We, however, do not agree with the submissions of the learned counsel appearing on behalf of Appellants that notification issued orr the basis of rental of a building premise is bad in law. We may notice some of the decisions of this court upholding validity of notification issued under similar provisions as under:

(a) The notification dated 12.8.1974 issued by the State of Madras under Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 exempting all buildings ow1~ed by Hindu, Christian and Muslim religious public trusts and public charitable trusts without any restriction on the period of its operation was upheld in S. Kandaswamy Chettiar (supra).

(b) Notification dated 21.11.1976 issued by the State of Madras under Section 29 of the Tamil Nadu Buildings (L~ase and Rent Control) Act, 1960 exempting all buildings belonging to all co-operative societies was upheld in S.M Mahendru & Co. & Ors. v. State of Tamil Nadu & Anr., [1985] I SCC 395. Precedent dealing with the amending statutes :

The amendment made in Section 3(c) of the Delhi Rent Act, 1958 was the first legislation where the National Housing Policy was implemented. The

VASUDEVSINGHv. U.0.1.[S.B.SINHA,J.]. 577 effect of the said legislation has been noticed hereinbefore. A Rental not exceeding Rs. 3500/- per month by the Government of Delhi amending Delhi Rent Control Act was upheld in D.C. Bhatia & Ors. v. Union of India & Anr., [1995) I SCC 104. The Kamataka Rent Control Act, 1961 exempting the b.Jildings fetching a rental for more than Rs.500/- in C.N. Rudramurthy v. K. Barkathulla Khan & Ors., [1998) 8 sec 275 has also been upheld. Similarly amendment made by the State of Jammu and Kashmir in the Jammu and Kashmir Rent Control Act, exempting the tenants whose income exceeds Rs. 40,000/- per annum was held to be intra vires in Delhi Cloth & General Mills etc. v. S. Paramjit Singh & Anr. etc., [1990) 4 SCC 723. Indisputably the legislature of a State has the requisite legislative power therefor.

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. D 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 ~~; E (a) .. (b) ..

(c) to any premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees; or..... " F 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 : G "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 Statement H

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A 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' B Committee and National Commission on .Urbanisation have· also recommended amendment of certain provisions of the Act. Considering these demands/recom'!lendations as :llso the fact that with the passage of time, the circumstances have also changed, necessitating a fresh look at the tenant-landlord relationship, the amendment of Delhi Rent C Control Act, 1958 has been proposed with the following objects:

(a) To rationalise t.he present rent control law by bringing about a balance between the interests of landlords and tenants. (b) To give a boost to house-building activity and maintain the existing housing stock in a reasonable state of repairs. D (c) To reduce litigation between landlords and tenants and to ensure expeditious disposal of disputes between them."

One of the contentions raised therein was that Rs. 3500/- per month was such a rreagre amount of rent for the town of !:>elhi; practically everybody E would be taken out of the protection of the Rent Control Act. Repelling the said contention, this Court opined that the objects of the amending Act were quite different from the objects of the Parent Act as the object of the Amending Act was not merely to protect the weaker sections of the society, i.e., the tenants but also the landlords. It was noticed that prior to enactment of the said amendment, various representations were made by the landlords' F association. It was thought by the legislature that the Rent Act had brought halt to the housing building activity for letting out. Keeping in view the acute shortage of accommodation causing hardship to the rich and the poor alike, the Act was held to have been enacted to strike a balance between the interests of the landlords and those of the tenants and for giving a boost to house building activity and pursuant thereto the legislature in its wisdom decided to restrict the prote::tion of the Rent Act not only to those premises in respect whereof rent payaLle 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 1:

Act altogether, it could do so also step by step. The said amendment was

.... VASU DEV SINGH v. U.0.1. [S.B. SINHA, J.] 579

found to be one of the steps for repealing the Act opining .: A "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 · B 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."

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 legislature was again emphasized in paragraph 52 thereof holding: E "We are unable to uphold this contention for a number of reasons. Prior to the enactment of the Rent Control Act by the various State Legislatures, the legal relationship between the landlord and tc ant was governed by the provisions of the Transfer of Property Act. Delhi Rent Control Act provided protection to the tenants from drastic enhancement of rent by the landlord as well as eviction, except on certain specific grounds. The legislature by the Amendment Act No. 57 of 1988 has partially repealed the Delhi Rent Control Act. This is a case of express repeal. By Amending Act the legislature has withdrawn the protection hitherto enjoyed by the tenants who were paying Rs. 3500 or above as monthly rent. If the tenants were sought to be evicted prior to the amendment of the Act, they could have taken advantage of the provisions of the Act to resist such eviction b,y the landlord. But this was nothing more than a right to :ke advantage of the enactment. The tenant enjoyed statutory protection as long as the statute remained in force and was applicable to him. H

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If the statute ceases to be operative, the tenant cannot claim to continue to have the old statutory protection. It was observed by - Tindal, C.J., in the case of Kay v. Goodwin, 130 ER 1403 : (ER p.1405)

"The effect of repealing a statute is to obliterate it as completely from the records of the parliament as if it had never been passed; and, it must be considered as a law that never existed, except for the purpose of those actions which were commenced, prosecuted, and concluded whilst it was an existing law.""

The Karnataka Rent Control Act, 1961 was amended by reason of Section 31 of the Amending Act exempting buildings fetching a rental of more than Rs.3500/- from the ambitthereof. The question as regards validity of the said provision came up for consideration before this Court in C.N. Rudramurthy v. K. Barkathulla Khan & Ors., [1998] 8 SCC 275, wherein D.C. Bhatia (supra) was followed. We need not, therefore, deal with the ratio in the said decision separately. D 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 & Anr. etc., [l 990) 4 sec 723 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 obje~t 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."

H Having noticed the notifications and the precedents operating in the

VASU DEV SINGH v. U.0.1. [S.B. SINHA, J.] 581

field, we may notice the distinguishing features of this case. A Statutory scheme :

It is trite that legal history can be taken into consideration for construction of a statute. Chandigarh, admittedly, is a new town. It was. meant to be used as a union territory in terms of the provisions of the Punjab, B Resettlement Act. It enjoys a unique feature which no other town in India does, namely, capital of two States as also being an Union Territory in itse\f. Although it is a capital of two States, the essential functions of a legislative authority as also power of administrations are in the hands of the Central Government in terms of Article 239 of the Constitution of India. It is the C Parliament alone which would legislate on its behalf. The Central Government extended the beneficial legislation of rent control in the Union Territory. It was declared an urban area only in November, 1972. In view of the Full Bench Decision of the Punjab & Haryana High Court in Dr. Harkishan Singh v. · Union of India & Ors., AIR (1975) P&H 160: 1975 PLR 163), the Parliament enacted the 1974 Act in terms whereof the provisions of 1949 Act were D extended to the Union Territory of Chandigarh. The 1949 Act is a pre- constitutional legislation. The 1974 Act was enacted immediately after partition of India. The State of Punjab during pre-partition days was known as State of East Punjab. It consisted of areas both urban and rural. The main purpose at· the time of enactment of the said Act might have been restricted to two areas, i.e., (l) rent of certain premises situated within the limits of urban areas E (2) eviction of tenants therefrom, whereas the main enactment applied to the entire State of Punjab. The extension of 1949 Act, evidently would apply to the Union Territory of Chandigarh. Sub-section (2) of Section 1 of the 1949 Act made a distinction between the urban area and cantonment area. It was not to apply to the cantonment area and prcsumably for that reason the p preamble uses the words "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 Ad would apply, thus may be found out from the definition of 'building' itself. G 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.

Legifi/ative policy : H

582 · SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 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 wbich sought to protect a category of the tenants occupying rented buildings specified therein not only from enhancement of rent, but also B from unreasonable eviction. The Act furthermore provides for protecti_on of the tenants from unreasonable harassment at the hands of the landiords.

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, a5 envisaged under Section I 06 thereof was sufficient· C 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.

The Transfer of Property Act does not contain any provision empowering D any court to regulate enhancemerit of rent. No provision existed therein also for protection of tenants from harassment at the hands of the landlords, as for example, disconnecting the electrical and water connection from the tenanted premises. The Rent Control Act, on the other hand, was enacted to protect the tenant, inter alia, in relation to the matters noticed hereinbefore.

E We may briefly notice the core provisions of the 1949 Act. Section 3 of the Act empowers the Administrator to issue an exemption notification. Sections 4, 5 and 6 deal with determination of fair rent. Section I 0 prohibits the landlord from disconnecting electrical energy, etc. Sectionl³ enumerates the grounds upon which the landlord seeks eviction of a tenant.

F The legislative policy of the State was, therefore, required to be deciphered from the said provisions.

Different Rent Control Acts enacted by different States use different preambles. Some Acts provide for control of rents, eviction and rents, letting houses, the lease of vacant premises to Government and some Acts seek to control only enhancement of rent or fixation of rent, unreasonable eviction of tenants. It is permissible to read the preamble of a statute to ascertain the legislative policy.

We are not oblivious that in construing· a statute, preamble may not have a role to play unless the meaning thereof is obscure or if plain meaning

. VASU DEV SINGH v. U.0.L [S.B. SINHA, J.] 583 is to be given, the same would lead to an absurdity, but, (1) the preamble being a part of the statute can be read along with other portions of the Act to give clear meaning to the provisions and to decide whether they are clear or ambiguous, (2) the preamble in itself is not an enacting provision as other relevant enacting words have to be found elsewhere in the Act, and (3) the utility of the preamble diminishes if the statutory provisions are themselves capable of given a literal meaning. (See Union of India v. Elphinstone Spg. & Wvg. Co. Ltd & Ors. [2001] 4 SCC 139.)

Preamble of a statute, as stated in State of Rajasthan & Ors. v. Basant Nahata (supra), however, provides for a key to understand it. It, togeth~r 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.

In Vasantlal Maganbhai Sanjanwala v. State of Bombay & Ors., [1961] 1 SCR 341 a provision empowering Provincial Government to fix a lower rent of the maximum rent payable by the tenants was upheld on the ground tqat 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 dot 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. F 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 Singn v. Sardar Partap Singh Kairon, [1960] G l SCR 909.) But we are herein concerned with somewhat a different question, viz., whether the impugned notification is violative of the legislative policry.

In Lachmi Narain and Ors. v. Union of India & Ors., [1976} 2 SCC 953, this Court was considering the effect of a notification issued in terms of H

584 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.

A Section 2 of the Union Territories (Laws) Act, 1950, where the words "not less than three months' notice" were substituted by the words "such previous notice as it considers reasonable" were struck down stating that :

"The impugned notification, dated December 7, 1957, transgress the limits which circumscribe the scope and exercise of the power conferred by Section 2 of Laws Act, at least in two respects.

Firstly, the power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi. The power given by Section 2 of the Laws Act had exhausted itself when the Bengal Act was extended, with some alterations, to Delhi by notification, dated April 28, 195 I. The impugned notification has been issued on December 7, 1957, more than 6Y:i years after the extension."

It was further.held that:

D "Secondly, the alteration sought to be introduced by this notification (December 7, 1957) in Section 6(2), goes beyond the scope of the "restrictions and modifications" permissible under Section 2 of the Laws Act; it purports to change the essential features of sub- section (2) of Section 6, and the legislative policy inherent therein."

E This Court was also of the opinion that Section 6(2) of the Act embodies a determination of a legislative policy and its formulation as an absolute rule of conduct which could be diluted, changed or amended only by the legislature in exercise of its essential legislative function. Necessarily taking recourse to executive action was. forbidden.

F In State of Rajdsthan & Ors. v. Basant Nahata (supra), the question as to whether the public policy could be 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 G 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." H

VASU DEV SINGH v. U.0.1. (S.B. SINHA, J.] 58~

It was further held : A "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 attornex under the Indian Contract Act or the Power-of-Attorney Act. A B 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 :

The decisions of this Court clearly point out the distinctive feature~ c 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: D (l) 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 E (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 separate Act, like. Cantonment Acts. (5) Where the same would come within the purview of the delegated , F legislation.

(6) Where the tenants or tenanted premises form a distinct and separate class.

(7) Where having regard to the constitutional scheme that any State G within the meaning of Article 12 of the Constitution of India would not treat its tenants in an unfair and arbitrary manner despite the rent control laws being not applicable in their case; as they would be treated to be forming a separate class; and

(8) Where the exemption notification is granted for a limited period ,H

586 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.

A or in respect of new buildings for a limited period.

In other words, the Administrator will have no jurisdiction to issue a notification which would have a permanent impact. The Administrator cannot change the basic features of the law or act contrary to the legislative policy.

B The legislature, on the other hand, can not only repeal the statute, it can change the basic features of the law. The only limitation. on the part of the legislature is that ordinarily it cannot take away a vested right.

Validity of the impugned notification :

C At the outset, we may notice that the learned counsel appearing on behalf of Appellants did not question the constitutionality of Section 3 of the Act. We are, therefore, concerned only with the validity of the impugned ·-.notification dated 7.11.2002. For the aforementioned purpose we would proceed on the basis that the rental fetched by a tenanted building or a part thereof can give rise to reasonable classification. The principal question, therefore, wh!ch would arise for consideration is as to whether the impugned notification satisfies the tests laid down in P.J Irani (supra).

One of the grounds for invalidating the notification would be if irrelevant factors have been taken into consideration. Another test which can be applied is as to whether the notification is otherwis.e 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. Despite the same, he equated H Chandigarh with other towns of the State of Punjab.

VASU DEV SINGH v. U.0.1. [S.B. SINHA, J.] 587 The Administrator in issuing the notification has missed the relevance A of the distinction between the National Housing Policy and the legislative policy. The power of exemption could be exercised having regard to th~ 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 therefor. Change of legislative policy with the aid of the National Housing B 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 constitutionally valid. It, however, "? provides for an enabling provision. The Central Government, by reason of the said provision, has been empowered to direct that all or any of the said provisions would not apply to any of the building or rented buildings or any class of buildings or any rented lands.

Sections 4, 5 and 6 of the Act dealt with the determination of fair rent F: Submissions of Mr. Nariman and Mr. Venugopal, both appearing for the landlords, however, are, inconsistent with each other. Whereas Mr. Nariman submitted that Sections 4, 5 and 6 for all practical purport and intent are not applicable as regard to the town of Chandigarh; according to Mr. Venugopal, Section 4(4)(ii)(c) would be applicable and thus enhancement of rent even in G' respect of the buildings, which came into existence after 1965-66, is permissible.

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 R.s.50/-. It may not, thus, be correct to contend that H

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A 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 B 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 c 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 D than the tenants of State of Punjab."

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 Act as the philosophy underlying it was to protect only such buildings where only tenants belonging to weaker sections reside. Sections 4, 5 and 6 of the Act are not the only provisions which provide for the protection of the tenants. What shall be the criteria to determine the question as to who would fall within the purview thereof depends upon a host of factors. Due application of mind was, thus, necessary for determining the said question.

Section 13 of the Act enumerates the grounds upon which the landlord may seek eviction of a tenant. Section 13-A is an exception to Section 13 in the sense that the same provides for grounds for eviction of a tenant in certain cases enumerated therein. Section 13-B enables the landlords named therein to recover immediate possession of the residential building or scheduled building and/or non-residential building to accrue to Non-resident Indian. The legislature itself, therefore, provided for speedy relief to a section of landlords. It is interesting to note that whereas eviction of a tenant from a residential building was permissible, it was made impermissible so far as non- residential premises are concerned, but, the same has been declared ultra H

VASU DEV SINGH v. U.0.L [S.B. SINHA, J.] 589

vires by this Court. A The provisions have been enacted for the purpose of protection of tenants of certain provisions.

The words "certain premises", thus, for the purpose of ascertaining the legislative policy must be construed having regard to their definition of :$ "building" only. The words "certain premises", having regard to its applicability in the urban areas, would also mean that the premises situated in the urban area and not in rural area.

The reason behind the enactment of the 1949 Act is well known and has been noticed by this Court in a large number of cases. It was conceived as C 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 E model Rent Control legislation was circulated in the year I 992 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 F 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. G 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 of notification issued by the Administration under section H

590 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 3 of the Act. Mr. Nariman contended that it is a virtual amendment by the Administrator but an Administrator cannot make an amendment. Concept of virtual amendment of a legislative Act by the executive is unknown. He has a limited jurisdiction and such jurisdiction must be exercised within the B parameters of Jaw as laid down in P.J. Irani (supra). In D.C. Bhatia (supra) it has clearly been pointed out that it is the legislature's function alone to make amendment and such measures are permissible so as to enable the legislature to achieve the goal as set down in terms of the national policy. The Government of Delhi did so. C Even in Motor General (Supra) this Court has held that what can be done by a temporary measure cannot be done for an indefinite period, inasmuch as the exemption <:annot be granted in perpetuity. This Court clearly pointed out that an earlier notification which was applicable for a limited period cannot be sustained after a lapse of 23 years. Kandasamy (supra) is again an D authority for the proposition that certain institutions, as for example, charitable institution which let out its property can be granted exemption having regard )- to the purport and object for which the same had been constituted. It is not disputed that a delegate must act within the four corners of the Act; the guidelines wherefor must be provided for in the Act itself. E The classification as regards the premises occupied and possessed by the State the Local Self Governme~t or other public sectors, however, stand on a different footing. It is now beyond any controversy that this Court treated the houses stated to be belonging to the State or public sector undertaking absolutely on a different footing on the pre-supposition that they would not unreasonably· enhance the rental of the premises and they would F conduct themselves in such a manner so as to make a tenant feel that they would be subjected to unreasonable eviction. In Baburao Shantaram More v. Bombay Housing Board & Anr., [1954] SCR 572 : AIR (1954) SC 153, this Court has held: "It is not to be expected that the Government or local authority or the G 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 H is a cogent basis for differentiation. The two classes of tenants are

- VASU DEV SINGH v. U.0.1. [S.B. SINHA, J.]

not by force of circumstances placed on an equal footing and the tenants of the Government or local authority or the Board cannot,' 591 A

therefore, complain of auy denial of equality before the law or of equal protection of the law. "

Mis. Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of . Bombay, [1989] 3 SCC 293 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/governm(fntal 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 may be made on the observations of this Court in Som Prakash Rekhi v. Union of India reiterated in MC. Mehta v. Union ofIndia wherein at p. 148 this Court observed: (SCC p. 480, para 55)

"It is dangerous to exonerate corporations from the need to have constitutional ·conscience; and so, that interpretation, language permitting, which makes governmental agencies, whatever their mien, amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio."

- Even the criterion underlying the policy is required to be changed by way of modification or variation in the standard of rent, object whereof should H

592 SUPREME COURT REP0RTS [2006] SUPP. 8 S.C.R.

A have been achieved only by making suitable amen<lments in the Act itself. The Administrator could not have tinkered with the provisions of the Act.

What should have been the criterion for fixing the quantum of rent so as to render the classification constitutional and valid in Jaw although is not a matter w!tich would ordinarily fall for consideration of the court, but the B question as to whether by reason of fixation of such a rent which would render the Act inapplicable to a large section of the tenants, in our considered view, would come within the scope of judicial review.

We, however, cannot accept the submissio:i that as Appellants C 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. I 000/-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 D 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 collecte~ nor has any study been made. As to how the said criterion had been fixed is not known. Except E stating that the rent of Rs.1500/- to Rs.3500/- was ~ade the criterion in terms of the National Housing Policy, the Administrator did not assign any other reason.

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 Jaw insofar as he failed to take into consideration that he could ,1ot have exercised any jurisdiction in terms thereof as the National Housing Policy, inter a/ia, 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. While exercising his jurisdiction under Section 3 of the Act, the Administrator was required to apply his own mind to the relevant facts. Application of mind on the part of the Administrator was also necessary having regard to the rate of inflation and other factors includinr. the prevalent rental in the neighbouring areas of the States of Punjab and Haryana. He further failed to take into consideration that in terms of National Housing Policy, that quantum of rent

.,,, VASU DEV SINGHv. U.O.I. [S.B. SJNHA.J.] 593 was made flexible. Only a broad guideline had been provided therefor. What A was necessary to be applied was the principle and not the minimum rent specified therein.

For the aforementioned purpose, it was necessary to collect relevant d<·ta. Rental of Rs.1500i- could not have been applied mechanically. !he High Court has followed D.C. Bhatia (supra) but it has failed to notice that in D. C. Bhatia (supra) itself whereas the proposal in the bill was to fix Rs.1500/- as the outer limit, the members of t!ie legislature upon deliberation in the matter, had fixed the quantum of rent at Rs.3500/-. Furthermore, for the aforementioned purpose, the lowest "Ceiling of Rs.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. v. State of Tamil Nadu & Ors., [1987] 4 SCC 238, 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 Housing Policy would 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 fonnuiated 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 tenns 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 G Articles 24 5 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. H

594 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A In D.C. Bhatia (supra), this Court clearly held that what can be done by the legislature cannot be done by the delegatee. Yet again, in B.K. Industries & Ors. v. Union ofIndia & Ors. [1993] Supp. 3 SCC 621, this Court clearly opined that by reason of such notification the delegatee 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, B the submissions of Appellants are of some significance that by reason thereof, over 9/lOth of the tenanted premises would go out of the purview of the Rent Act.

In Rattan Arya & Ors. v. Staie of Tamil Nadu & Anr., AIR (1986) SC C 1444, this Court categorically observed that fixing exemption li!Ilit at Rs.400/ - had become unrealistic with the passage of time particularly fri view of the hike in re.nts. In this case, the manner in which the rate ofrent of the tenanted premise or the value of the property has gone up as evident from the data furnished by Appellants in their writ petition. The same was not denied or disputed. D For the aforementioned purpose, our attention has been drawn to certain documents to show the effect of the said notification, i.e., that immediatety thereafter exorbitant rent was claimed from the tenants by the landlords.

We, therefore, in this case, have sufficient materials on record to hold E that Rs.1500/- could not have been fixed as the quantum of rent for the purpose of extending the exemption provision under Section 3 of the Act to the Administrator.

The legislative objective and poli<,:y indisputably must be considered having regard to the preamble and other core provisions of the Act. Section F 3 although is a part of the Act, but the same cannot be said to contain an in-built policy so as to empower the Administrator to do all such things which can be done by the legislature itself.

By taking recourse to the preamble, it cannot be said, as has been submitted by Mr. Nariman, that the power to exclude the tenanted premises can be exercised without taking into consideration the legislative policy and the object of the Act. It may be true that by reason of Section 3 of the Act, n·J arbitrary power as such has been conferred in view of the 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

VASU DEV SINGH v. U.O.I. [S.B. SINHA, J.] 595

review. A 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. " 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 E General Clauses Act shall not apply to an executive action. Executive actions can be taken by a person who is statutorily authorized therefor. He is required to apply his own mind. What can be done in future by another authority cannot be a ground for upholding an executive act.

Conclusion : F

For the reasons, aforementioned, the impugned judgments cannot be sustained which are set aside accordingly. The appeals are allowed. However, in the facts and circumstances of the case, there shall be no order as to costs.

N.J. Appeals allowed. G