Full Judgment Text
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PETITIONER:
M/S PUNJAB TIN SUPPLY CO., CHANDIGARH ETC. ETC.
Vs.
RESPONDENT:
THE CENTRAL GOVERNMENT & ORS.
DATE OF JUDGMENT20/10/1983
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SEN, A.P. (J)
CITATION:
1984 AIR 87 1984 SCR (1) 428
1984 SCC (1) 206 1983 SCALE (2)503
CITATOR INFO :
R 1984 SC 121 (31)
R 1986 SC 244 (7,14,15)
F 1987 SC2117 (28,31)
D 1992 SC1806 (7)
ACT:
The East Punjab Urban Rent Restriction Act, 1949 as
modified by the East Punjab Urban Rent Restriction Act
(Extension to Chandigarh) Act. 1974- Sec. 3-Validity of.
Whether Union Territory of Chandigarh, Home Department
Notification No. 352-LD-73/602 dated January 31, 1973 as
modified by notifications dated September 24, 1973 and Sept.
24,1974 issued under sec. 3 valid Whether Notifications
operate prospectively.
Interpretation of statutes-Rule of-Object and policy of
statute need not always be strictly confined to preamble and
provisions of statute.
Interpretation of statutes-Rule of-Whether a statute
operates retrospectively-Does not depend primarily on
language of statute-Court to see surrounding circumstances.
HEADNOTE:
By enacting the East Punjab Urban Rent Restriction Act
(Extension to Chandigarh) Act, 1974 the Parliament brought
into force with effect from November 4, 1972, the East
Punjab Urban Rent Restriction Act, 1949 which was in force
in the former State of Punjab with the modifications set out
in its schedule in the Union Territory of Chandigarh and
validated all actions taken, notifications issued and orders
made or purported to have been taken, issued or made under
the 1949 Act. Sec. 3 of the Act of 1949 provided that the
Central Government may exempt any building from the
application of the Act. Under that section the Chief
Commissioner of Chandigarh issued a notification dated
January 31, 1973 stating that the provisions of the Act
shall not apply to buildings, constructed in the urban area
of Chandigarh, for a period of five years with effect from
the date the sewerage connection is granted in respect of
such buildings. This notification was modified by
notifications dated September 24, 1973 and Sept. 24, 1974.
The petitioners questioned the validity of s. 3 of the Act
of 1949 and notifications issued thereunder on the grounds
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that s. 3 suffered from the vice of excessive delegation of
legislative power; that the exemption granted by the
notification dated January 3, 1973 as modified by the later
notifications was outside the scope of the object and policy
of the Act and at the same time discriminatory, and that the
power to issue notifications under s. 3 of the Act could be
exercised by the Central Government only. It was also urged
that the notification had prospective operation.
429
Dismissing the petitions,
^
HELD: Section 3 of the Act does not suffer from the
vice of excessive delegation of legislative power and is
also not violative of Art. 14 of the Constitution. [439 F]
P. J. Irani v. The State of Madras. [1962] 2 S.C.R.
169; State of Madhya Pradesh v. Kanhaiyalal, [1970] 15
M.P.L.J. 973; and Sadhu Singh v. The District Board,
Gurdaspur & Anr. (Civil Appeal No. 2594 of 1966 decided on
October 29, 1968) referred to.
The preamble and the provisions of a statute no doubt
assist the Court in finding out its object and policy but
its object and policy need not always be strictly confined
to its preamble and the provisions contained therein. [440
D]
In the instant case, the object and policy of the Act
appears to be slightly wider than some of the key provisions
of the Act namely fixation of fair rent and prevention of
unreasonable eviction of tenants. The policy and object of
the Act generally is mitigation of hardship of tenants. Such
mitigation can be attained by several measures, one of them
being creation of incentive to persons with capital who are
otherwise reluctant to invest in the construction of new
buildings in view of the chilling effect of the rent control
laws. As a part of the said scheme in order to persuade them
to invest in the construction of new buildings exemption is
granted to them from the operation of the Act for a short
period of five years so that whatever may be the hardship
for the time being to the tenants of the new buildings, the
new buildings so constructed may after the expiry of the
period of exemption be available for the pool of housing
accommodation controlled by the Act. The impugned
notification is not therefore, ultra vires section 3 of the
Act as in its true effect, it advances the scheme, object
and purposes of the Act which are articulated in the
preamble and the substantive provisions of the Act. Moreover
the classification of buildings into exempted buildings and
unexempted buildings brought about by the notification bears
a just and reasonable nexus to the object to be achieved
namely the creation of additional housing accommodation to
meet the growing need of 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. [440 E-441 B]
Art. 239(1) of the Constitution provides that save as
otherwise provided by Parliament by law, Union Territory
shall be administered by the President acting through an
administrator to be appointed by him with such designation
as he may specify. Under a notification issued on November
1, 1966, the President has directed that the administrator
(the Chief Commissioner) shall in relation to the Union
Territory of Chandigarh exercise and discharge with effect
from November 1, 1966 the powers and functions of the State
Government under any law which is extended to the Union
Territory of Chandigarh. The Act is a State law which is so
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extended to Union Territory through the Extension Act. It is
further seen that s. 3 (8) (b) (iii) of the General Clauses
430
Act defines ’Central Government’ in relation to the
administration of a Union Territory as including the
administrator thereof acting within the scope of the
authority given to him under Art. 239 of the Constitution.
The Union of India which is a party to these proceedings
does not dispute the authority of the Chief Commissioner to
issue the notification referred to above. Moreover s. 4 of
the Extension Act clearly validates the notifications which
had been issued or purported to have been issued under the
Act before the date of the Extension Act by declaring that
they shall be deemed to be valid and effective. [441 G-442
E]
Uttam Bala Ravankar v. Asstt. Collector of Customs &
Central Excise Goa & Anr., [1971]1 S.C.R. 714 referred to.
All laws which affect substantive rights generally
operate prospectively and there is a presumption against
their retrospectivity if they affect vested rights and
obligations unless the legislative intent is clear and
compulsive Such retrospective effect may be given where
there are express words giving retrospective effect or where
the language used necessarily implies that such
retrospective operation is intended. Hence the question
whether a statutory provision has retrospective effect or
not depends primarily on the language in which it is
couched. If the language is clear and unambiguous effect
will have to be given to the provision in question in
accordance with its tenor. If the language is not clear then
the Court has to decide whether in the light of the
surrounding Circumstances retrospective effect should be
given to it or not. [443 D-F]
In the instant case a reading of the notification does
not clearly indicate that the Chief Commissioner intended to
grant exemption in respect of any of the buildings
constructed prior to January 31, 1973. There was also no
compelling reason for giving exemption to buildings which
had already been constructed as the object of issuing the
notification was only to encourage construction of new
buildings thereafter and not to take away the statutory
protection already extended to tenants of buildings which
had come into existence prior to January 31, 1973. The
notification applies only to those buildings which are given
sewerage connection or electric connection or which are
occupied, as the case may be, on or after January 31, 1973.
[443 H-444 F; 346 C]
The notification impugned in the instant case stands by
itself and it is not to be construed in the background of
the provision of s. 2 of the U.P. Urban Buildings
(Regulation of Letting, Rent and Eviction) Act, 1972. [446
A]
Om Prakash Gupta v. Dig Vajendrapal Gupta, [1982] 2
S.C.C. 61; Ratan Lal Shinghal v. Smt. Murti Devi, (A.I.R.
1980 S.C. 635); Shri Ram Saroop Rai v. Smt. Lilavati, [1980]
3 S.C.C. 452; Strawboard Manufacturing Co. Ltd. v. Gupta
Mill Workers Union,[1953] S.C.R. 439; Dr. Indramani Pyarelal
Gupta. v. W.R. Nathu & Ors., [1963]1 S.C.R. 721; and Income-
Tax Officer, Alleppey v. M.C. Ponnoose & Ors., [1970] 1
S.C.R. 678 referred to.
431
JUDGMENT:
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ORIGINAL JURISDICTION : Writ Petitions Nos. 6372-80,
9604, 9935-41, 9943-44, 9946-56 and 10001 of 1982, 13-18,
83, 393, 410, 682, 914-25, 928, 1108-11, 2742-52, 2770,
2898, 3330-33, 3362, 3543, 3875-79, 3941, 3946, 3950, 4241,
4242, 4815-16, 4826, 4829, 4834-37, 5183, 5574, 5717, & 7891
of 1983, 7016, 8189-8206 & 9346 of 1982, 4614-20, 5188,
5845, 7489, 8212, 8612, 8875-76, 8886-88, 8268-69, 8348-50,
8382, 8384, 9082-83, 9094, 9129, 9133, 9134, 9145, 9147,
9262, 9562, 9862,9864 and 9876-78 of 1983.
(Under article 32 of the Constitution of India)
Advocates For The Petitioners:
O.P. Verma
Sanjeev Walia, J.S. Sahpuri and M.P. Jha.
Shrinath Singh and A. Gupta.
A.K. Goel.
C.M. Nayyar.
P.N. Puri, M.K. Dua and Sudarshan Goel.
V.M. Tarkunde and Anil. B. Divan, H.K. Puri.
S.K. Mehta, P.N. Puri and M.K. Dua.
R.P. Bhatt, Ashok Mathur and Parveen Kumar.
A.R. Ganguli.
S.K. Bisaria.
S.K. Sabarwal.
B.S. Shant, D.K. Garg and M.M. Kashyap, S.K. Bagga.
Advocates for the Petitioners:
B.R. Kapur, Sanjiv Madon, S.R. Srivastava, D.D. Sharma,
S.M. Ashri, Shankar Ghose, M/s. D.P. Mukharji, G.S.
Chatterjee, B.S. Shant, M.M. Kashyap, T.S. Arora, S.K.
Ghambir, Shrinath Singh, A.P. Mohanti, Swaraj Kaushal, B.
Kanta Rao and P.H. Parekh.
432
Advocates For The Respondents:
R.P. Jagga
S.C. Manchanda, P.R. Mridul, Harbanslal and P.A.
Francis.
R.P. Jagga, Miss Kailash Mehta, Vimal Dave, A. Minocha,
Jeetendra Sharma, Janardhan Sharma, P. Gaur, Atul Jain, Prem
Malhotra, M.M. Kshatriya, Dr. Meera Agarwal, R.C. Misra,
Jitendra Sharma, D.P. Mukharji, Randhir Jain, Ramesh C.
Pathak, Satish Vig, E.C. Agarwal, V.K. Panditha, R. Satish,
C.K. Mahajan Ashok Grover, Mohan Pandey, J.K. Jain, R.S.
Bindra, J.D. Jain, K.L. Taneja, S. Srinivasan, E.M.S. Anam,
M.K. Dua, N.K. Agarwala, R.P. Jagga, S.K. Bagga, Ms. S.
Bagga, C.P. Wig, Miss. Rani Chhabra, Mukul Mudgal, N.S. Das
Bhal, Ashuni Kumar, R.N. Poddar, C.V. Subba Rao.
The Judgment of the Court was delivered by
VENKATARAMIAH, J. In these petitions under Article 32
of the Constitution, the petitioners have questioned the
constitutional validity of the Home Department Notification
No. 352-LD-73/602 dated January 31, 1973 (hereinafter
referred to as ’the Notification’) as modified by the Home
Department Notification No. 2294-LD-73/3474 dated September
24, 1973 and the Home Department Notification No. 3205-LD-
74/3614 dated September 24, 1974 issued by the Chief
Commissioner of the Union Territory of Chandigarh under
section 3 of the East Punjab Urban Rent Restriction Act,
1949 (hereinafter referred to as ’the Act’) exempting every
building constructed in the urban area of Chandigarh for a
period of five years from the respective date applicable to
it from the operation of the Act and issuing certain other
directions in that behalf. Incidentally the petitioners have
also questioned the validity of section 3 of the Act.
For a proper appreciation of the rival contentions of
the parties, it is necessary to refer briefly to the history
of the relevant provisions of law. The area now known as the
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Union Territory of Chandigarh was a part of the State of
Punjab as it existed prior to the coming into force of the
Punjab Reorganization Act. 1966 (Act 31 of 1966). With
effect from November 1, 1966 i.e. the appointed day under
section 4 of the said Act the Union Territory of Chandigarh
came into existence and thereupon the said area ceased to
from part of the erst while State of Punjab. Section 87 of
the Punjab Reorganization
433
Act, 1966 conferred power on the Central Government to
extend by notification with such restrictions or
modifications as it thought fit any enactment which was in
force in a State at the date of the notification to the
Union Territory of Chandigarh. Whereas section 88 of that
Act provided for the territorial extent of laws, section 89
dealt with the power to adapt laws, with the object of
providing as far as possible for the continuity of laws in
force in the several parts of the erstwhile State of Punjab
in the successor States namely the States of Punjab and
Haryana and the Union Territory of Chandigarh.
The Act i.e. the East Punjab Urban Restriction Act,
1949 was a law which had been enacted before the
commencement of the Constitution and continued to be in
operation even after the commencement of the Constitution in
the erstwhile State of Punjab by virtue of the provisions of
the Constitution. But the Act had not been brought into
force in the area constituting the Union Territory of
Chandigarh by the State Government of the erstwhile State of
Punjab. By the Notification No. 13/1/66-CHD dated November
1, 1966 issued by the Government of India, Ministry of Home
Affairs, the President authorised the Administrator of the
Union Territory of Chandigarh i.e. the Chief Commissioner
thereof, in relation to the said territory to exercise and
discharge with effect from November 1, 1966 the powers and
functions of the State Government under any such law. On the
basis of the above notification and other relevant
provisions of law and notifications which had been issued
from time to time to which a detailed reference is not
necessary, the Chief Commissioner issued a notification
bringing the Act into force in the Union Territory of
Chandigarh with certain modifications with effect from
November 4, 1972. The validity of the said notification was
challenged before the High Court of Punjab and Haryana. The
High Court quashed the said notification by its judgment
dated October 9, 1974 holding that the Act had not been
effectively brought into force in the Union Territory of
Chandigarh by virtue of that notification (vide Dr.
Harkishan Singh v. Union of India & Ors).(1) It is not
necessary to deal with the reasons given by the High Court
in support of its judgment since the legal infirmities
pointed out by the High Court were set right by the
Parliament by the enactment of the East Punjab Urban Rent
Restriction Act (Extension of Chandigarh) Act, 1974 (Act 54
of 1974) (hereinafter referred to as ’the Extension Act’)
the relevant part of which reads as follows:
434
"1. This Act may be called the East Punjab Urban Rent
Restriction Act (Extension to Chandigarh) Act, 1974.
2. In this Act, "The Act" means the East Punjab Urban
Rent Restriction Act, 1949 as it extended to, and was
in force, in certain areas in the pre-reorganisation
State of Punjab (being areas which were administered by
municipal committees, cantonment boards, town
committees or notified area committees or area notified
as urban areas for the purposes of that Act)
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immediately before the 1st day of November, 1966.
3. Notwithstanding anything contained in any
judgment, decree or order of any court, the Act shall
subject to the modifications specified in the Schedule
be in force in and be deemed to have been in force with
effect from the 4th day of November, 1972 in the Union
Territory of Chandigarh as if the provisions of the Act
as so modified had been included in and formed part, of
this section and as if this section had been in force
at all material times.
4. (1) Notwithstanding anything contained in any
judgment, decrees or order of any court, anything done
or any action taken (including any notification or
direction issued or rents fixed or permission granted
or oder made) or purported to have been done or taken
under the Act shall be deemed to be as valid and
effective as if the provisions of this Act had been in
force at all material times when such thing was done or
such action was taken.
(2) Nothing in this Act shall render any person guilty
of any offence for any contravention of the provisions
of the Act which occurred before the commencement of
this Act.
THE SCHEDULE
(See Section 3)
Modifications in the Act
1. Throughout the Act, for "State Government"
substitute "Central Government".
435
2. Section 1, for sub-sections (2) and (3), substitute
"(2) It extends to all the urban areas in the Union
Territory of Chandigarh".
3. Section 2.-
(i) after clause (d), insert-
(dd) "Notification" means a notification published in
the Official Gazettee".
(ii) for clause (j), substitute-
’(j) "urban area" means the area comprised in
Chandigarh as defined in Clause (d) of Section 2 of the
Capital of Punjab (Development and Regulation) Act,
1952 and includes such other area comprised in the
Union Territory of Chandigarh as the Central Government
may, having regard to the density of the population and
the nature and extent of the accommodation available
therein and other relevant factors, declare by
notification to be urban for the purposes of this Act."
4. For Section 20, substitute-
"20. (1) The Central Government may by
notification make rules, for the purpose of carrying
out all or any of the provisions of this Act.
(2) Every rule made under this Section shall
be laid as soon as may be after it is made, before each
House of Parliament, while it is in session for a total
period of thirty days which may be comprised in one
session or in two or more successive sessions, and if,
before the expiry of the session immediately following
the session or the successive sessions aforesaid, both
Houses agree in making any modification in the rule or
both Houses agree that the rule should not be made, the
rule shall thereafter have effect, only in such
modified form or be of no effect, as the case may be;
so however, that any such modification or annulment
shall be without prejudice to the validity of anything
previously done under that rule".
436
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Thereafter in exercise of the powers conferred by
section 3 of the Act the Chief Commissioner published a
notification dated January 31, 1973 exempting the buildings
referred to therein from the operation of the Act. It
reads:-
"No. 352-LD-73/602 dated January 31, 1973. In
exercise of the powers conferred by section 3 of the
East Punjab Urban Rent Restriction Act, 1949 (Punjab
Act No. III of 1949), as applicable to the Union
Territory of Chandigarh, the Chief Commissioner,
Chandigarh, is pleased to direct that the provisions of
the said Act shall not apply to buildings, constructed
in the urban area of Chandigarh, for a period of five
years with effect from the date the sewerage connection
is granted in respect of such buildings by the
competent authority under rule 112 of the Punjab
Capital (Development and Regulation) Building Rules,
1952."
This was followed by the issue of another notification
dated September 24, 1973 which is as follows:-
"No. 2294-LD-73/3474 -In partial modification of
Chandigarh Administration, Home Department/Notification No.
532-LD-73/602 dated the 31st January, 1973, the Chief
Commissioner, Chandigarh is pleased to direct that the
period of five years’ exemption shall be computed as under:
(a) Where sewerage connection can be given, from the
date such connection is granted by the competent
authority;
(b) Where sewerage connection cannot be granted, as
for instance, in the case of booths, from the date
electric connection is first given by the
competent authority.
(c) In case not covered in categories (a) or (b) above
from the date the building is actually occupied."
Again on June 11, 1982 a further notification was
issued as follows:
437
"No. LD-82/10.11.- In partial modification of
Chandigarh Administration, Home Department Notification
No. 352-LD-73/602 dated the 31st January, 1973 read
with Chandigarh Administration Home Department
Notification No. 2294-LD-73/3474, dated the 24th
September, 1973 and in exercise of the powers conferred
by section 3 of the East Punjab Urban Rent Restriction
Act, 1949 as applicable to the Union Territory of
Chandigarh, the Chief Commissioner, Chandigarh is
pleased to direct that the period of 5 years’ exemption
shall be computed in the manner indicated below:
(a) Where sewerage connection can be given, from the
date such connection is granted by the competent
authority;
(b) Where sewerage connection cannot be granted, as
for instance, in the case of booths, from the date
electric connection is first given by the
competent authority;
(c) Where sewerage connection has already been given
and new building is constructed in addition to or
over and above the existing building and has been
separately let out, from the date new building is
actually occupied;
(d) In cases not covered in categories above, from the
date the building is actually occupied."
On September 24, 1974, the Chief Commissioner had
issued earlier another notification which read thus:
"No. 3205-LD-74/3614.
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In exercise of the powers conferred by section 3
of the East Punjab Urban Rent Restriction Act, 1949 as
applicable to the Union Territory of Chandigarh, the
Chief Commissioner, Chandigarh is pleased to direct
that the provisions of Section 13 of the said Act shall
not apply to buildings, exempted from the provisions of
the Act for a period of five years vide Chandigarh
Administration Notification No. 352-LD-73/602 dated the
31st January,
438
1973 in respect of decrees passed by Civil Courts in
suits for ejectment of tenants in possession of these
buildings instituted by the landlords against such
tenants during the period of exemption whether such
decrees were or are passed during the period of
exemption or at any time thereafter."
The Extension Act merely brought into force with effect
from November 4, 1972, the Act which was an Act in force in
the former State of Punjab with the modifications set out in
its Schedule in the Union Territory of Chandigarh and
validated all actions taken, notifications issued and orders
made or purported to have been taken issued or made under
the Act. Having done that it withdrew from the scene.
Thereafter the Act as modified by the Extension Act alone
has to be looked into to consider its effect on the Union
Territory of Chandigarh. As observed by this Court in
Rajputana Mining Agencies Ltd. v. Union of India & Anr.(1)
’there is neither precedent nor warrant for the assumption
that when one Act applies another Act to some territory, the
latter Act must be taken to be incorporated in the former
Act. It may be otherwise, if there were words to show that
the earlier Act is to be deemed to be reenacted by the new
Act.’ The Act in the instant case was only extended but not
re-enacted. We should, therefore, proceed on the assumption
that the Act itself with the amendments was in force with
effect from November 4, 1972 in the Union Territory of
Chandigarh. Every building that was in existence on that day
and which was constructed thereafter came to be governed by
the Act as amended by the Extension Act. It was on January
31, 1973 that the Chief Commissioner issued-the notification
under section 3 of the Act exempting a certain class of
buildings namely new buildings for a period of five years
calculated from the relevant date applicable to them.
Section 3 of the Act as amended by the Extension Act reads
thus:
"3. The Central Government may direct that all or
any of the provisions of this Act shall not apply to
any particular building or rented land or any class of
buildings or rented lands."
The notification dated January 31, 1973 and the other
notifications modifying it are already set out above.
439
Several contentions have been urged on behalf of the
petitioners in support of their case. Their first attack is
directed against section 3 of the Act itself. It is urged
that the said section which authorises the Central
Government to issue notifications exempting certain
buildings or class of buildings suffers from the vice of
excessive delegation of legislative power. This contention
need not detain us long because of the decision in P.J.
Irani v. The State of Madras(1) in which section 13 of the
Madras Buildings (Lease and Rent Control) Act, 1949 (Madras
Act XXV of 1949) which read as:
"Notwithstanding anything contained in this Act
the State Government may by a notification in the Fort
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St. George Gazette exempt any building or class of
buildings from all or any of the provisions of this
Act,"
was upheld by a Constitution Bench of this Court. This Court
did not also notice any infirmity in section 3(2) of the
Madhya Pradesh Accommodation Control Act, 1961 (41 of 1961)
which read as:
"The Government may, by notification exempt from
all or any of the provisions of this Act any
accommodation which is owned by any educational
religious or charitable institution or by any nursing
or maternity home, the whole of the income derived from
which is utilised for that institution or nursing home
or maternity home."
while deciding the case of State of Madhya Pradesh v.
Kanhaiyalal.(2) In fact the very section i.e. section 3 of
the Act has been held by this Court not to suffer from the
vice of excessive delegation of legislative power (See Sadhu
Singh v. The District Board, Gurdaspur & Anr.(3) It is also
held in that case that section 3 is not violative of Article
14 of the Constitution. This contention, therefore, fails.
The next contention is that the exemption granted by
the notification in these cases being outside the scope of
the object and policy of the Act and at the same time
discriminatory is liable to be struck down. The argument
proceeds on the assumption that the policy and object of an
Act can be gathered only from its preamble
440
and the provisions contained therein and that in the instant
case since the preamble of the Act stated that it had been
enacted to restrict the increase of rent of certain premises
situated within the limits of urban areas and the eviction
of tenants therefrom and the Act has made provision only for
those purposes mentioned in the preamble, the Central
Government which is only a delegate of the Parliament could
not exempt totally certain new buildings from the operation
of the Act, thus enabling greedy landlord to charge
excessive rents and to evict at their sweet will the tenants
who did not submit to their wishes. In the counter affidavit
filed on behalf of the administration of the Union Territory
of Chandigarh it is pleaded that the object of issuing the
notification is to encourage construction of new buildings
in the urban area of Chandigarh so that as the supply of
housing accommodation increased, the pressure on the tenant
as a class may decrease.
The preamble and the provisions of a statute no doubt
assist the Court in finding out its object and policy but
its object and policy need not always be strictly confined
to its preamble and the provisions contained therein. The
object and policy of the Act which is now before us appears
to be slightly wider than some of the key provisions of the
Act namely fixation of fair rent and prevention of
unreasonable eviction of tenants. The acute problem of
shortage of urban housing as we all know has become a
permanent feature throughout India. It is on account of the
shortage of the number of houses in urban areas, the
landlords get an opportunity to exploit tenants who are in
need of housing accommodation by compelling them to enter
into unconscionable bargains. The Act is passed as one of
the measures taken to mitigate the hardship caused to the
tenants. The policy and object of the Act generally is
mitigation of the hardship of tenants. Such mitigation can
be attained by several measures, one of them being creation
of incentive to persons with capital who are otherwise
reluctant to invest in the construction of new buildings in
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view of the chilling effect of the rent control laws. As a
part of the said scheme in order to persuade them to invest
in the construction of new buildings exemption is granted to
them from the operation of the Act for a short period of
five years so that whatever may be the hardship for the time
being to the tenants of the new buildings, the new buildings
so constructed may after the expiry of the period of
exemption be available for the pool of housing accommodation
controlled by the Act. The impugned notification is not,
therefore, ultra vires section 3 of the Act as in its true
effect,
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it advances the scheme, object and purposes of the Act which
are articulated in the preamble and the substantive
provisions of the Act. Moreover the classification of
buildings into exempted buildings and unexempted buildings
brought about by the notification bears a just and
reasonable nexus to the object to be achieved namely the
creation of additional housing accommodation to meet the
growing needs of 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 for
ever 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.
The next submission made on behalf of the petitioners
is that the notification dated January 31, 1973 and the
other subsequent notifications issued by the Chief
Commissioner are of no effect since according to the
petitioners, the power to issue such notifications under
section 3 of the Act can be exercised by the Central
Government only. On behalf of the respondents i.e. the Union
of India and the administration of the Union Territory of
Chandigarh, it is urged that although the Central Government
is vested with the power to issue orders under section 3 of
the Act, the said power can be exercised concurrently by the
Chief Commissioner of the Union Territory of Chandigarh also
by virtue of Article 239(1) of the Constitution read with
the notification issued by the President there-under and of
the definition of the expression ’Central Government’ given
in section 3(8) of General Clauses Act, 1897.
Clause (1) of Article 239 of the Constitution reads
thus:
"239. (1) Save as otherwise provided by Parliament
by law, every Union territory shall be administered by
the President acting, to such extent as he thinks fit,
through an administrator to be appointed by him with
such designation as he may specify."
The administrator of the Union Territory of Chandigarh
is called the Chief Commissioner. Under a notification
issued on
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November 1, 1966, the President has directed that the
administrator (the Chief Commissioner) shall in relation to
the Union Territory of Chandigarh exercise and discharge
with effect from November 1, 1966 the powers and functions
of the State Government under any law which is extended to
the Union Territory of Chandigarh. The Act is a State law
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which is so extended to the Union Territory through the
Extension Act which is only a corollary to sections 87, 88
and 89 of the Punjab Reorganisation Act, 1966. It is further
seen that section 3 (8) (b) (iii) of the General Clauses Act
defines ’Central Government’ in relation to the
administration of a Union Territory as including the
administrator thereof acting within the scope of the
authority given to him under Article 239 of the
Constitution. The Union of India which is a party to these
proceedings does not dispute the authority of the Chief
Commissioner to issue the notifications referred to above.
In Uttam Bala Ravankar v. Asstt. Collector of Customs &
Central Excise, Goa & Anr.(1) this Court has applied section
3(8) of the General Clauses Act to uphold a notification
issued by the Lt. Governor of Goa, Daman and Diu (the
administrator of the Union Territory) where the power to
issue it was exercisable by the Central Government. Moreover
section 4 of the Extension Act clearly validates the
notifications which had been issued or purported to have
been issued under the Act before the date of the Extension
Act by declaring that they shall be deemed to valid and
effective. We do not, therefore, find any merit in this
contention too.
We shall next deal with the question whether the
notification issued under section 3 of the Act has
retrospective effect. This question affects those buildings
which were constructed in the sense that they satisfied the
criteria applicable to them prior to the issue of the
notification. It is urged on behalf of the tenants of such
buildings that the notification is only prospective in its
operation and the benefit of the exemption accorded by it
cannot be claimed by the landlords of such buildings. The
stand of the administration of the Union Territory of
Chandigarh is also the same. The submission made on behalf
of the Chandigarh administration is that the notifications
take within their sweep only such buildings as are completed
in the sense fulfilling the criteria laid down therein after
the notifications were brought into force. The landlords of
certain buildings, however, claim that all buildings which
were given
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sewerage connection within five years prior to January
31,1973 or buildings to which such sewerage connection could
not be given but which were given electric connection within
five years prior to January 31,1973 or in any other case
buildings which were occupied within five years prior to
January 31,1973 should also be treated as having been
exempted from the operation of the Act for a period of five
years from the respective dates applicable to them In other
words, it is urged by them that all the buildings which
satisfied any of the above conditions on or after January
31,1968 would be entitled to the exemption in question for a
period of five years. It is further contended by them that
any decree for eviction that may have been obtained by them
in respect of such buildings in civil courts in suits
instituted by them during the period of such exemption would
be executable notwithstanding the provisions contained in
Section 13 of the Act.
All laws which affect substantive rights generally
operate prospectively and there is a presumption against
their retrospectivity if they affect vested rights and
obligations unless the legislative intent is clear and
compulsive. Such retrospective effect may be given where
there are express words giving retrospective effect or where
the language used necessarily implies that such
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retrospective operation is intended. Hence the question
whether a statutory provision has retrospective effect or
not depends primarily on the language in which it is
couched. If the language is clear and unambiguous effect
will have to be given to the provision in question in
accordance with its tenor. If the language is not clear then
the Court has to decide whether in the light of the
surrounding circumstances retrospective effect should be
given to it or not.
In these cases the document which has got to be
construed is a notification issued under section 3 of the
Act by the Chief Commissioner who is only a delegate of the
Legislature. It is to be noted that there is no dispute that
as soon as the Act came into force on November 4, 1972 all
the buildings which had been constructed prior to that date
came within the scope of the Act. The Act also applied to
all the buildings which were constructed thereafter and
before January 31, 1973 on which date the notification was
issued. The point for consideration is whether on the issue
of the notification on January 31, 1973 any such building to
which the Act already applied was taken out of the operation
of the Act. A reading of the notification does not clearly
indicate that the Chief
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Commissioner intended to grant exemption in respect of any
of the buildings constructed prior to January 31, 1973.
While the words ’buildings constructed in the urban area of
Chandigarh for a period of five years with effect from the
date the sewerage connection is granted’ which are found in
the notification refer to all the buildings to which
sewerage connection is granted after the date of the
notification, they do not necessarily mean and include
buildings which had been given sewerage connection within
five years prior to that date. There was also no compelling
reason for giving exemption to buildings which had already
been constructed as the object of issuing the notification
as mentioned earlier was only to encourage construction of
new buildings thereafter and not to take away the statutory
protection already extended to the tenants of buildings
which had come into existence prior to January 31, 1973. The
landlords of these buildings have, however, relied upon the
decision of this Court in Om Prakash Gupta v. Dig
Vajendrapal Gupta(1) in support of their contention. In that
case, the Court had to construe the provisions of sub-
section (2) of section 2 of the U.P. Urban Buildings
(Regulation of Letting, Rent and Eviction) Act, 1972 (U.P.
Act 13 of 1972), the relevant part of which read thus:
"Except as provided in sub-section (5) of section 12,
sub-section (1-A) of section 21, sub-section (2) of
section 24, sections 24-A, 24-B, 24-C or sub-section
(3) of section 29, nothing in this Act shall apply to a
building during a period of ten years from the date on
which its construction is completed:
xxx xxx xxx
Explanation 1.-For the purposes of this sub-section,-
(a) the construction of a building shall be deemed to
have been completed on the date on which the completion
thereof is reported to or otherwise recorded by the
local authority having jurisdiction, and in the case of
a building subject to assessment, the date on which the
first assessment thereof comes into effect, and where
the said dates are different, the earliest of the said
dates, and in the absence of any such report, record or
assessment, the date on which it is actually occupied
(not including occupation merely for the purposes of
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supervising the
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construction or guarding the building under
construction) for the first time."
In the above case, the Court held that the aforesaid
provision had retrospective effect and applied to buildings
constructed prior to the date on which the said Act came
into force provided they satisfied the conditions mentioned
therein.
The above provision appears as part of section 2 of the
U.P. Act referred to above which exempted many existing and
future buildings which satisfied the conditions referred to
in clauses (a) to (f) of sub-section (1), sub-section (2)
and sub-section (3) thereof. The said exemption was given by
the statute itself. It may be stated here that at the
instance of one of the parties to the Special Leave Petition
(Civil) No. 3573 of 1979 (Suresh Chand v. Gulam Chisti)
which was disposed of by the same judgment, a review of the
above judgment has been granted and by an order made on
October 7, 1983 the case is directed to be reheard. Moreover
on the construction of the above provision, there are two
earlier decisions-one in Ratan Lal Shinghal v. Smt. Murti
Devi(1) decided on August 21, 1979 in which it is held that
the said provision has no retrospective effect but is only
prospective in operation and another in Shri Ram Saroop Rai
v. Smt. Lilavati(2) decided on May 7, 1980 in which a
contrary view is taken. Section 2 of the said U.P. Act
requires to be considered in the setting in which it
appears. We are of the view that any decision on that
provision has to be confined to that provision and cannot be
extended to the present case by analogy.
There is one other distinction which is sought to be
made between an exemption granted by a notification which is
issued by a delegate of the Legislature who is not given
power by the Legislature to issue a notification having
retrospective effect and an exemption granted by the
Legislature itself on the basis of the observations made in
Strawboard Manufacturing Co. Ltd. v. Gupta Mill Workers
Union, Dr. Indramani Pyarelal Gupta v. W. R. Nathu & Ors.
and Income-tax Officer, Alleppey v. M.C. Ponnoose & Ors.
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It is not necessary to deal with the above point any
further since we are of the view that the notification
impugned in these cases stands by itself and it is not to be
construed in the background of the provisions of section 2
of the U.P. Act referred to above.
On a careful consideration of the question we feel that
the benefit of the notification cannot be extended to
buildings which were given the sewerage connection or
electric connection or which were occupied, as the case may
be, prior to January 31, 1973. Those buildings are governed
by the provisions of the Act and any decrees passed in
respect of them are governed by section 13 of the Act. The
notification applies only to those buildings which are given
sewerage connection or electric connection or which are
occupied, as the case may be, on or after January 31, 1973.
In the result we declare that section 3 of the Act and
the notification dated January 31, 1973 and the other
notifications impugned in these cases are valid and
effective. We further declare that the exemption granted by
the notification dated January 31, 1973 applies only to
those buildings which are given sewerage connection or
electric connection or which are occupied, as the case may
be, on or after January 31, 1973 and not to those buildings
which satisfied any of the said conditions before January
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31, 1973.
The petitions are accordingly disposed of. No costs.
H.S.K. Petitions dismissed.
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