RAM KRISHAN GROVER AND OTHERS versus UNION OF INDIA AND OTHERS on 14 November 2019

RAM KRISHAN GROVER AND OTHERS

v.

UNION OF INDIA AND OTHERS

(Civil Appeal No. 8597 of 2019)

NOVEMBER 14, 2019

[RANJAN GOGOI CJI, NAGESWARA RAO ANDSANJIV KHANNA, JJ.]

Rent Control and Eviction:

East Punjab Urban Rent Restriction Act, 1949:

s.13-B – Notification dated 09.10.2009 by CentralGovernment, extending Section 13-B and other related sections(inserted in the Rent Act vide East Punjab Urban Rent Restriction(Amendment) Act, 2001) to the Union Territory of Chandigarh –Provision of s. 13-B giving preferential right to claim eviction tonon-resident Indian – Constitutional validity of s. 13-B – Held:Section 13-B is constitutional valid as also its extension andapplicability to the Union Territory of Chandigarh – East PunjabUrban Rent Restriction (Amendment) Act, 2001 – PunjabRe-organisation Act, 1966 – s. 87.

s. 13-B – Issuance of Notification dated 09.10.2009, u/s. 87of the Re-organisation Act, extending Section 13-B in theAmendment Act to the Union Territory of Chandigarh by executiveaction – Validity of – Held: Extension of the Amendment Act to theUnion Territory of Chandigarh falls within the ambit of conditionaldelegation and is valid and permissible – Once a policy ofextension of laws has been laid down by the Parliament and isclear and permissible, it would only seem as an inevitable falloutthat the executive should be permitted to extend future amendmentsto the existing laws – Thus, the challenge predicated on thedoctrine of excessive delegation, separation of powers, doctrineof the law of agency, cannot be accepted – Administrative law –Conditional delegation – East Punjab Urban Rent Restriction(Amendment) Act, 2001 – Punjab Re-organisation Act, 1966 –s. 87.

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A

As. 13-B – Amendments made vide the Amendment Act withregard to the rights of Non-Resident Indians by the State Legislatureof Punjab – Legislative competence of the State – Held:Amendment Act enacted by the State legislature was well within itscompetence – Amendment Act on its true construction and byreference to the doctrine of “pith and substance” is relatable toBthe relationship of landlord and tenant for housing andaccommodation and falls under the Concurrent List – Dominantintention or “pith and substance” of the legislation is to regulatethe relationship between Non-Resident Indian landlords and tenantsfor housing and accommodation – Merely because the AmendmentCAct to achieve its object touches upon the subject matter in respectof Non-Resident Indian landlords in the Rent Act, does not makethe Amendment or the Rent Act ultra vires the Constitution – In thecontext of the Union Territory of Chandigarh and as the subjectmatter falls within the Concurrent List, it would be immaterial todecide on the competence of the legislating body – Power to makeDlaws in respect of a Union Territory vests with the Parliament underArt.246(4) – In terms of s. 87 of the Re-organisation Act, the powerto extend laws to the Union Territory of Chandigarh vests with theCentral Government, that is the Parliament or the CentralExecutive, as the case may be, and is permissible – ConstitutionEof India – Art. 246(4) – East Punjab Urban Rent Restriction(Amendment) Act, 2001 – Punjab Re-organisation Act, 1966 –s. 87.

s. 13-B – Plea that s. 13-B creates a special class of NRIlandlords, however, does not afford any legal remedy to the tenantsF– Reasonability of – Held: By providing for a simplified procedureof eviction by the Non-Resident Indians, s. 13-B does not dilutethe rights of tenants – It gives a chance to the tenants on merits toestablish their case and when justified and necessary to take thematter to trial – Thus, s. 13-B cannot be held to be arbitrary andunreasonable.G

s. 13-B – s. 13-B classifying non-Resident Indian landlordsas a separate category – Validity of Section 13-B – Held: Section13-B cannot be treated as an arbitrary classification that infringesand violates Article 14 – It cannot be held to be unconstitutionalbecause it grants a right to claim eviction for bona fide need byHsummary procedure to a certain group of landlords-Non-Resident Indians subject to and on the satisfaction of statutory conditionswhich incorporate a check on frivolous evictions – It rests withthe legislature to make laws and extend it to other similarly situatedpersons – Rent Act(s) invariably give similar rights by a controlledmechanism and alluded riders to various other classes/groups oflandlords, namely, government servants, members of armed forces,the retired or soon to retire employees of the Central and the StateGovernments, widows, etc – Constitution of India – Art.14.

s. 13-B – Restrictions and conditions imposed on landlordseeking eviction under – Purpose of – Held: In terms of Section13-B, the condition imposed upon the landlord is that he shouldhave been the owner of the premises for five years before theeviction petition is filed – Such landlord/owner is permitted to filean eviction petition only once during the lifetime and in respect ofone building – Landlord cannot sell or give the premises on leasefor a period of five years from the date of taking possession fromthe tenant – On breach of the same, the tenant has a right to seekrestoration of possession – In case the landlord does not occupythe premises for a continuous period of three months after gettingan eviction order or lets out the whole or any part of the premisesto a third person other than the tenant in contravention of theprovisions of s. 13 B(3), punishment is imposed-– Thus, theserestrictions and conditions are strong in-built checks to ensure thatthe need of the landlord should be genuine and bona fide and thetenant should not be subjected to frivolous and dubious evictionorder by relying on false assertions.

s.18-A and s.13-B – Right of Non-Resident Indians to initiateeviction under the summary procedure – Nature of – Held: Is notan unfettered and absolute right – It is subject to satisfaction ofvarious pre-requisites and imperatives that ensure and checkpotential abuse by resorting to a short-circuit procedure –Requirement should arise from a genuine need of the Non-ResidentIndian landlord or his dependent – Furthermore, thesepre-conditions and post possession restrictions stated thereinsuggest that s. 13-B serves a specific policy objective to ensurethe right of Non-Resident Indians to occupy their property in theUnion Territory of Chandigarh and the State of Punjab as the casemay be, after “returning” to their country – This right has to bebalanced with the right of the tenants to establish their case on AB

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Amerits by disproving the genuine requirement of the Non-ResidentIndians – Constitution of India – Art. 14.

Doctrines/Principles: Doctrine of Pith and substance –Meaning of – Held: Pith and substance doctrine states that if thelegislation is covered by an entry, that is, it is within the permittedBjurisdiction of the legislature, any incidental encroachment in therival field has to be disregarded – Only when wide constructionof an entry leads to heads-on-clash with another entry in the sameor different List, the principle of harmonious construction isapplied to reconcile the conflict and to give effect to each of them.

C

Conclusion

C

CConstitution of India: Art. 254 – Repugnancy – Whenattracted – Held: Repugnancy arises between a Central and a StateAct when there is a direct and irreconcilable conflict between thetwo enactments and in that case, the Central Legislation prevailsby virtue of Art. 254 – Such repugnancy or inconsistency is not toDbe readily inferred as the entries in the three Lists permit incidentalencroachment – Thus, every attempt must be made to placate theconflict and only when and in case of oppugnant clash, the courtshould proceed to strike down the legislation as trespassing beyondits legitimate and legal confines.

ELegislature: Function of – Held: Primary function of thelegislature is to make laws for all or different groups or classes ofpersons – Lawmakers as elected representatives are in a betterposition to know the needs, requirements and expectations ofcitizens – Thus, the legislature possesses the power to distinguishand classify persons or things subjected to such laws – Such aFclassification, however, must pass the muster of Art. 14 whichproscribe hostile and invidious discrimination – Art. 14 does notentirely prohibit classification by grouping certain persons withspecial peculiarities in a special category to meet certain specificends.GLegislation: Rent control legislation – Object of – Stated.

Dismissing the appeals, the Court

HELD: 1. The constitutional validity of Section 13-B of theRent Act and its extension and applicability to the UnionHTerritory of Chandigarh is upheld. [Para 46] [45-B]

Whether Notification dated 09.10.2009 issued underSection 87 of the Punjab Reorganisation Act, 1966 extendingSection 13-B of the East Punjab Urban Rent Restriction Act,1949 to Chandigarh by executive action is invalid?

2.1 The extension of the Amendment Act to the UnionTerritory of Chandigarh falls within the ambit of conditionaldelegation and is valid and permissible. [Para 18] [26-A]

2.2 It cannot be accepted that the Notification dated09.10.2009 which extends the Amendment Actto Chandigarhby an executive action in exercise of powers under Section 87of the Re-organisation Act amounts to and suffers from the viceof excessive delegation as it amends the rent legislation in forcein Chandigarh, that is, the Extension Act were enacted by theParliament in exercise of powers under Article 246(4)of theConstitution. Once a policy of extension of laws has been laiddown by the Parliament and is clear and permissible, it wouldonly seem as an inevitable fallout that the executive should bepermitted to extend future amendments to the existing laws.Therefore, the challenge predicated on the doctrine of excessivedelegation, separation of powers, doctrine of the law of agency,fails and must be rejected. Such challenge must also be rejectedin view of the large number of eviction suits filed by Non-Resident Indian landlords on the strength of Notification dated09.10.2009 who would be left remediless if contentions to thecontrary are accepted. [Paras 15, 19] [20-A-B; 26-B-C]

Ramesh Birch v. Union of India (1989 Supp) 1 SCC430 : [1989] 2 SCR 629 – relied on.

Re Delhi Laws Act 1912, Ajmer Merwara (Extensionof Laws) Act, 1947 and Part C States (Laws) Act, 1950AIR 1951 SC 332 : [1951] SCR 747 ; R v Burah(1878) 5 Ind App 178 (PC) ; Vasu Dev Singh v. Unionof India (2006) 12 SCC 753 : [2006] 8 Suppl. SCR535 – referred to.

Whether amendments made vide the Amendment Act withregard to the rights of Non-Resident Indians by the StateLegislature of Punjab were beyond its competence?

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A3.1 The entries in the three Lists: List I – Entry 17 & 18,List II – Entry 18, List III Entry 6, 7 & 13 are not mutuallyexclusive. Further, the entries are fields of legislation thatdemarcate the area and heads of legislation. Thus, they shouldreceive the widest construction unless their rigour and importneed to be castrated by competing entries and other parts ofBthe Constitution. Interpretation of each entry has to be fair andliberal so as to cover all incidental and subsidiary matters whichcan reasonably be said to have been comprehended in it. Theentries should not be interpreted in a narrow and pedantic sense.“Pith and substance” doctrine states that if the legislation isCcovered by an entry, that is, within the permitted jurisdiction ofthe legislature, any incidental encroachment in the rival field hasto be disregarded. Only when wide construction of an entry leadsto heads-on-clash with another entry in the same or differentList, the principle of harmonious construction applies toDreconcile the conflict and to give effect to each of them. [Para22] [27-D-F]

3.2 Repugnancy arises between a Central and a State Actwhen there is a direct and irreconcilable conflict between thetwo enactments. It is when there is an irreconcilable conflictEbetween the two legislations that the Central Legislationprevails by virtue of Article 254 of the Constitution. Suchrepugnancy or inconsistency is not to be readily inferred as theentries in the three Lists permit incidental encroachment.Consequently, every attempt must be made to placate theconflict and only when and in case of oppugnant clash, the CourtFshould proceed to strike down the legislation as trespassingbeyond its legitimate and legal confines. [Para 23] [27-F-H]

Vijay Kumar Sharma and Others v. State of Karnatakaand Others (1990) 2 SCC 562 : [1990] 1 SCR 614 ;Indu Bhushan Bose v. Rama Sundari Debi andGAnother (1969) 2 SCC 289 : [1970] 1 SCR 443 ;Jaisingh Jairam Tyagi and Others v. MamanchandRatilal Agarwal and Others (1980) 3 SCC 162 : [1980]3 SCR 224 ; V. Dhanapal Chettiar v. Yesodai Ammal(1979) 4 SCC 214 : [1980] 1 SCR 334 ; AccountantHand Secretarial Services Pvt. Ltd. and Another v. Union of India and Others (1988) 4 SCC 324 : [1988] 1Suppl. SCR 493 – referred to.

3.3 The Amendment Act on its true construction and byreference to the doctrine of “pith and substance” is relatableto the relationship of landlord and tenant for housing andaccommodation and falls under the Concurrent List. Thedominant intention or “pith and substance” of the legislation isto regulate the relationship between Non-Resident Indianlandlords and tenants for housing and accommodation. Merelybecause the Amendment Act to achieve its object touches uponthe subject matter in respect of Non-Resident Indian landlordsin the Rent Act, does not make the Amendment or the Rent Actultra vires the Constitution. The Rent Act as amended by theAmendment Act and the Central legislations relating tocitizenship, regulation of the right of non-residents to own andacquire immovable property, cover different subject matters andserve different objects and there is no repugnancy between theRent Act and any Central enactment like Citizenship Act,Foreign Exchange Regulation Act, etc. The view that thelegislative lists under the Seventh Schedule envisage andmandate separate legislation by the Central Government for Non-Resident Indian landlords cannot be accepted. [Para 27] [29-G-H; 30-A-B]

3.4 The Amendment Act enacted by the State legislaturewas well within its competence. In the context of the UnionTerritory of Chandigarh and as the subject matter falls withinthe Concurrent List, it would be immaterial to decide on thecompetence of the legislating body. The power to make laws inrespect of a Union Territory vests with the Parliament underArticle 246(4). In terms of Section 87 of the Reorganisation Act,the power to extend laws to the Union Territory of Chandigarhvests with the Central Government, that is the Parliament orthe Central Executive, as the case may be, and is permissible.[Para 28] [30-C-D]

Whether Section 13-B of the Rent Act is arbitrary andunreasonable inasmuch as it does not afford any legal remedyto the tenants?

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A4.1 Section 19 (2-B) incorporates statutory safeguards tocheck and penalise deceitful and two-faced landlords and givesthe right of restitution to the defrauded tenant. Section 18-A ofthe Rent Act prescribes a summary procedure for recovery ofpossession applicable to eviction petitions filed by Non-ResidentIndian landlords under Section 13-B of the Rent Act. Section 18-BA of the Rent Act requires the Controller to take up the matteron a day-to-day basis until the hearing on an application for leaveto defend is concluded. No litigant can possibly object to aprovision stipulating day-to-day hearing which ensures speedy,expeditious and effective decisions. Section 18-A also states thatCthe decision of the Controller is final as no appeal or secondappeal lies against the order of eviction except that the HighCourt could, to satisfy itself of the correctness of the decision,examine the matter by calling for the records of the case. [Paras29, 30, 33] [30-H; 31-A; 33-E-F]DRavi Dutt Sharma v. Ratan Lal Bhargava (1984) 2 SCC75 : [1984] 2 SCR 614 ; Kewal Singh v. Smt. Lajwanti(1980) 1 SCC 290 : [1980] 1 SCR 854 – referredto.

4.2 In terms of Section 13-B of the Rent Act, the landlordEshould have been the owner of the premises for five years beforethe eviction petition is filed. Such landlord/owner is permittedto file an eviction petition only once during the lifetime and inrespect of one building. Sub-section (3) to Section 13-B of the Rent Act imposes a restriction on sale or lease of the premisesFfor a period of five years from the date of taking possession fromthe tenant. On breach of the conditions/ restrictions mentionedin sub-section (3) to Section 13-B, the tenant has a right to seekrestoration of possession. Sub-section (2-B) to Section 19imposes a maximum punishment of six months imprisonment ora fine of one thousand rupees or both in case the landlord doesGnot occupy the premises for a continuous period of three monthsafter getting an eviction order or lets out the whole or any partof the premises to a third person other than the tenant incontravention of the provisions of sub-section (3) to Section 13-B. These restrictions and conditions are strong in-built checksHto ensure that the need of the landlord should be genuine and bona fide and the tenant should not be subjected to frivolousand dubious eviction order by relying on false assertions. [Para35] [36-D-G]

Baldev Singh Bajwa v. Monish Saini (2005) 12 SCC

778 : [2005] 4 Suppl. SCR 26 – relied on.

4.3 The presumption raised with regard to the genuineneed of the landlord as pleaded in the petition should not be readas an axiom or self-evident truth, which entitles the landlord andmandates the Court to pass a decree of eviction. Therequirement of a ‘strong case’ for obtaining leave to defendmeans a good case that brings to fore reasonable and well-grounded basis on which the tenant seeks leave to contest theeviction proceedings. It does not mean setting up andestablishing at that stage a case beyond any scintilla of doubtand debate. The grounds and pleas raised should reflect clearand strong defence and relate to the grounds mentioned inBaldev Singh Bajwa’s case. Each case has to be decided on itsmerits and not on the basis of any pre-conceived suppositionsand presumptions. By providing for a simplified procedure ofeviction by the Non-Resident Indians, Section 13-B does notdilute the rights of tenants. It gives a chance to the tenants onmerits to establish their case and when justified and necessaryto take the matter to trial. By no means, therefore, Section 13-B can be held to be arbitrary and unreasonable. [Para 36] [36-H; 37-E-G; 38-A]

Baldev Singh Bajwa v. Monish Saini (2005) 12 SCC778 : [2005] 4 Suppl. SCR 26 ; Inderjeet Kaur v.Nirpal Singh (2001) 1 SCC 706 : [2000] 5 Suppl. SCR707 – relied on.

Swami Nath v. Nirmal Singh (2010) 9 SCC 452 : [2010]10 SCR 1002 – referred to.

Whether classifying Non-Resident Indian landlords as aseparate category renders Section 13-B invalid and ultra viresArticle 14 of the Constitution ?

5.1 Legislature’s primary function is to make laws for allor different groups or classes of persons. The lawmakers aselected representatives are in a better position than any other A

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10SUPREME COURT REPORTS

Abody which is removed from local and other circumstances, toknow the needs, requirements and expectations of citizens. It,therefore, seems only logical that the legislature possesses thepower to distinguish and classify persons or things subjected tosuch laws. Such a classification, however, must pass the musterof Article 14 which proscribes hostile and invidiousBdiscrimination. Recognising that Article 14 does not entirelyprohibit classification by grouping certain persons with specialpeculiarities in a special category to meet certain specific ends.Two conditions which must be satisfied for a classification towithstand a challenge under Article 14, the classification shouldCbe founded on intelligible differentia which distinguishes personsor things that are grouped together from others left out of thegroup; and the differentia must have a rational relation or nexusto the object sought to be achieved by the statute in question.A classification need not be scientifically perfect or logicallycomplete and would be justified unless it is palpably arbitrary.DThe test to judge the validity of any classification has to bepractical and pragmatic by looking beyond the classification tothe purpose of the law, that is, the purpose or object of thelegislation and the circumstances which had prevailed when thelaw was passed and which had necessitated passing of that law.ENot only this, there is a presumption as to constitutional validityof an enactment predicated on the belief that the legislatureunderstands and correctly appreciates the need of its own peopleand is free to recognise degrees of harm and may confine itsrestriction to only those cases where the need is deemed to bethe clearest. The hardship that may result from the classificationFcannot be the basis for determining the validity of any statute.This requires distinguishing between under-inclusiveness andover-inclusiveness. The former classification does not confer thesame benefit or place the same burden on others who aresimilarly situated whereas over-inclusiveness includes not only Gthose who are similarly situated with respect to the purpose butothers who are not so situated as well. The latter is frowned uponbut the former may pass the judicial test for the courts doexercise tolerance to under-inclusiveness unless it is clear thatthere is no fair reason for the law which would not require withequal force its extension to those whom it leaves untouched.H[Para 38] [39-B-G; 40-A-B]

Ram Krishna Dalmia v. Justice S.R. Tendolkar [1959]SCR 279 ; State of A.P. and Others v. Nallamilli RamiReddi and Others (2001) 7 SCC 708 : [2001] 2 Suppl.SCR 287 ; Pioneer Urban Land & InfrastructureLimited and Another v. Union of India and Others(2019) 8 SCC 416 – referred to.

5.2 Rent control legislation are quintessentially sociallegislation that were enacted in the 1940’s and 1950’s to protectand curb exploitation of tenants in view of the prevailing socio-economic conditions due to large scale immigration to towns andcities, increase in population, lack of housing facilities as landedproperty was owned by a few well-off and wealthy persons. Therent control legislation, thus, interfered with the generalfreedom of contract and right of the landlord to seek evictionunder the Transfer of Property Act. However, all such legislationsinvariably also provide for balancing the conflicting rights of thelandlords. There is a need for balancing the two rival interests.[Para 40] [42-D-E]

Malpe Vishwanath Acharya and Others v. State ofMaharashtra and Another (1998) 2 SCC 1 : [1997] 6Suppl. SCR 717 ; Joginder Pal v. Naval Kishore Behal(2002) 5 SCC 397 : [2002] 3 SCR 1078 ; SatyawatiSharma (Dead) By LRs v. Union of India and Another(2008) 5 SCC 287 ; Vinod Kumar v. Ashok KumarGandhi (2019) 10 SCALE 357 ; Kewal Singh v. Smt.Lajwanti (1980) 1 SCC 290: [1980] 1 SCR 854 ; RaviDutt Sharma v. Ratan Lal Bhargava (1984) 2 SCC 75:[1984] 2 SCR 614 – referred to.

5.3 Section 13-B of the Rent Act cannot be held to beunconstitutional because it grants a right to claim eviction forbona fide need by summary procedure to a certain group oflandlords, that is, Non-Resident Indians subject to and on thesatisfaction of statutory conditions which incorporate a check onfrivolous evictions. The plea that Section 13-B ought to bestruck down on the ground that similar rights can be extendedto other landlords is without substance and is rejected. It restswith the legislature to make laws and extend it to other similarly A

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Asituated persons. The Rent Act(s) invariably give similar rightsby a controlled mechanism and alluded riders to various otherclasses/groups of landlords, namely, government servants,members of armed forces, the retired or soon to retireemployees of the Central and the State Governments, widows,etc. [Para 43] [44-B-C]B

5.4 The right of Non-Resident Indians to initiate evictionunder the summary procedure provided in Section 18-A is notan unfettered and absolute right. It is subject to satisfaction ofvarious pre-requisites and imperatives that ensure and checkCpotential abuse by resorting to a short-circuit procedure. Therequirement should arise from a genuine need of the Non-Resident Indian landlord or his dependent. Such landlord shouldbe an owner for five years preceding the date of filing of theeviction petition. There is a cap on permitting the use of theprovision which is available only once in a lifetime and only inDrespect of one building. There are restrictions and constraintson the re-sale and re-letting and a further requirement to possessthe property for a continuous period of three months after thepossession is taken. These pre-conditions and post possessionrestrictions suggest that Section 13-B serves a specific policyEobjective to ensure the right of Non-Resident Indians to occupytheir property in the Union Territory of Chandigarh and the Stateof Punjab as the case may be, after “returning” to their country.This right has to be balanced with the right of the tenants toestablish their case on merits by disproving the genuineFrequirement of the Non-Resident Indians. [Para 44] [44-D-G]

5.5 Section 13-B cannot be treated as an arbitraryclassification that infringes and violates Article 14 of theConstitution. The challenge predicated on the basis ofunconstitutionality of the classification is rejected. [Para 45] [44-GH]

Harkishan Singh v. Union of India AIR 1975 Punj.& Har 160 (FB) – referred to.

Case Law Reference

HAIR 1975 P & H 160 (FB)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8597of 2019.

From the Judgment and Order dated 23.08.2011 of the HighCourt for the States of Punjab and Haryana at Chandigarh in Civil WritPetition No. 15378 of 2011.

H

AWithCivil Appeal Nos. 8598, 8599, 8600, 8601, 8602, 8603, 8604, 8605of 2019.

Sanjay Jain, ASG, Nidhesh Gupta, Narender Hooda, RakeshBKumar Khanna, Sr. Advs., Gopal Balwant Sathe, Siddharth Bhatnagar,Ms. Ruby Singh Ahuja, Nakul Gandhi, Navandeep Matta, Mrs. ManikKaranjawala (for M/s Karanjawala & Co.), A. Venayagam Balan, AnkitSwarup, Vipul Jindal, Rohit Kumar Singh, Shyamal Kumar, Tarun Gupta,Rishi Malhotra, Alok K. Agarwal, Vikas Jain, Amit Kumar, Ms. KaveetaWadia, Ms. Garima Prashad, Ms. Apoorv Rastogi, Ms. Vriti Gujral,CMs. Pallavi Singh, Ms. Japneet Kaur, Ankur S. Kulkarni, AnandSrivastava (for M/s. Lex Regis Law Offices), Subhasish Bhowmick,Ms. Nida Doon, Dr. Surender Singh Hooda, Rameshwar Prasad Goyal,Yogesh Malhotra, P. S. Sudheer, Rishi Maheshwari, Ms. Anne Mathew,

Ms. Shruti Jose, Udit Grover, Vibhuti Sushant Gupta, P.S. Khurana,DMohit Kumar Singh (for Ram Naresh Yadav), Ram Naresh Yadav,Ms. Manju Jetley, Sanjai Kumar Pathak, Ms. Shashi Pathak, ArvindKumar Tripathi, Rajat Bhardwaj, Bhal Singh Malik, Mrs. KamaldeepGulati, Dr. Vinod Kumar Tewari, Vikas Mahajan, Vinod Sharma,Aakash Varma, Anil Kumar, Ravinder Singh, Ms. Dimple Nagpal, (forEMs. Astha Sharma), Ms. Astha Sharma, Shree Pal Singh, Ms. UpasanaNath, Arvind Kumar Gupta, Tarunvir Singh Khehar, Sandeep Mishra,Vishal Tripathi (for Ashok K. Mahajan), Ashok K. Mahajan,Shubhranshu Padhi, Ajit Singh Pundir, Arijeet Singh, D. V. Singh,Bhupendra Kumar Bhardwaj, Ritesh Khatri, Anil Kumar Mishra,Anurag Singh, Dr. (Mrs.) Vipin Gupta, S. L. Aneja, Senthil Jagadeesan,FSudhir Bisla, Kamal Mohan Gupta, Pawan K. Bahl, Rakesh K. Sharma,Ashok Arora, Yadav Narender Singh, Anandan A., Jatinder KumarBhatia, Naresh Bakshi, Yash Pal Dhingra, Dinesh Verma, MunishBhardwaj, S.K.S. Bedi (for Subhasish Bhowmick), Deepak Goel, P. N.Puri, Satinder S. Gulati, Mrs. Kamaldeep Gulati, Anand Mishra,GAmrendra Kumar Singh, Anil Kumar Tandale, Shashank Tripathi,Ms. Rachana Srivastava, Ms. Binu Tamta, B.V. Balram Das,B. Krishna Prasad, Pankaj Pandey, Vishal Bhatnagar, Ashwani Kumar,Ms. Iti Sharma, Ms. Kumud Lata Das, Jay Kumar, Arvind Gupta,Himanshu Gupta, Ms. Uttara Babbar, Ashok Panigrahi, Anmol Tayal,HS. Vinay Ratnakar, Advs. for the appearing parties.

The Judgment of the Court was delivered by SANJIV KHANNA, J.

1. Leave granted.

2. The afore-captioned appeals are by tenants of differentresidential and non-residential buildings in the Union Territory ofChandigarh and urban areas in the State of Punjab, who have challengedthe constitutional validity of Section 13-B of the East Punjab Urban RentRestriction Act, 1949 (for short, the ‘Rent Act’) and its extension tothe Union Territory of Chandigarh by the Central Government videNotification dated 09.10.2009 in exercise of powers under Section 87of the Punjab Reorganisation Act, 1966 (for short, the ‘ReorganisationAct’).

3. Section 13-B of the Rent Act, reads as under:

“13-B. Right to recover immediate possession ofresidential building or scheduled building and/or non-residential building to accrue to Non-resident Indian.— (1)Where an owner is a Non-Resident Indian and returns to Indiaand the residential building or scheduled building and/or non-residential building, as the case may be, let out by him or her, isrequired for his or her use, or for the use of any one ordinarilyliving with and dependent on him or her, he or she, may apply tothe Controller for immediate possession of such building orbuildings, as the case may be:

Provided that a right to apply in respect of such a building underthis Section, shall be available only after a period of five yearsfrom the date of becoming the owner of such a building and shallbe available only once during the life time of such an owner.

(2) Where the owner referred to in sub-section (1), has let outmore than one residential building or scheduled building and/ornon-residential building, it shall be open to him or her to makean application under that sub-section in respect of only oneresidential building or one scheduled building and/or one non-residential building, each chosen by him or her.

(3) Where an owner recovers possession of a building under thisSection, he or she shall not transfer it through sale or any othermeans or let it out before the expiry of a period of five years BC

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16SUPREME COURT REPORTS

Afrom the date of taking possession of the said building, failingwhich, the evicted tenant may apply to the Controller for an orderdirecting that he shall be restored the possession of the saidbuilding and the Controller shall make an order accordingly.”

The expression ‘Non-Resident Indian’ has been defined in clauseB(dd) to Section 2 of the Rent Act and reads:

“(dd) “Non-resident Indian” means a person of Indian origin, whois either permanently or temporarily settled outside India in eithercase –

C(a) for or on taking up employment outside India; or (b) for carrying on a business or vocation outside India; or

(c) for any other purpose, in such circumstances, as wouldindicate his intention to stay outside India for anuncertain period;”

D

Section 13-B of the Rent Act gives a right to Non-ResidentIndians to recover immediate possession of residential/ scheduled/non-residential buildings situated in the Union Territory of Chandigarh andurban areas in the State of Punjab on the satisfaction of the conditionsstated. We shall elaborate the provisions subsequently and would firstErefer to the legislative history and procedure adopted for enforcementof the challenged provisions in the Union Territory of Chandigarh.

4. In 1956, the unified State of Punjab was created by mergingthe erstwhile States of Pepsu and Punjab. In 1966, a new State ofFHaryana was created and carved out of certain territories from theState of Punjab. Certain hill areas of Punjab were merged in the UnionTerritory of Himachal Pradesh. A new Union Territory of Chandigarhwas created and became the joint capital of Punjab and Haryana. TheReorganisation Act, that is, the Punjab Reorganisation Act, 1966 gaveeffect to the proposals vide provisions relating to the delimitation ofGterritories. Another important aspect of the Reorganisation Act dealtwith the applicability of laws in territories that had undergonereorganisation. This was effected by Part X of the Reorganisation Actcomprising of Sections 86 to 97. Sections 87, 88 and 89 of theReorganisation Act are relevant for the present decision and areHreproduced below:

“87. Power to extend enactments to Chandigarh – The CentralGovernment may, by notification in the Official Gazette, extendwith such restrictions or modifications as it thinks fit, to the Unionterritory of Chandigarh any enactment which is in force in a Stateat the date of the notification.

88. Territorial extent of laws.—The provisions of Part II shallnot be deemed to have effected any change in the territories towhich any law in force immediately before the appointed dayextends or applies, and territorial references in any such law tothe State of Punjab shall, until otherwise provided by a competentlegislature or other competent authority, be construed as meaningthe territories within the State immediately before the appointedday.

89. Power to adapt laws.—For the purpose of facilitating theapplication in relation to the State of Punjab or Haryana or tothe Union Territory of Himachal Pradesh or Chandigarh of anylaw made before the appointed day, the appropriate Governmentmay, before the expiration of two years from that day, by order,make such adaptations and modifications of the law, whether byway of repeal or amendment, as may be necessary or expedient,and thereupon every such law shall have effect subject to theadaptations and modifications so made until altered, repealed oramended by a competent legislature or other competentauthority.”

We shall subsequently elucidate on the sections, with specificreference to Section 87 of the Reorganisation Act.

5. Territories originally comprised in the former province of EastPunjab and later designated as the State of Punjab were governed bythe Rent Act, which applied to all “urban areas” defined in Section 2(j)as any area administered by a municipal committee, a cantonmentboard, a town committee or an area notified by the State Governmentas an “urban area” for the purposes of the Rent Act.

6. Central Government in exercise of power under Section 89of the Reorganisation Act had issued the Punjab Reorganisation(Chandigarh) (Adaptation of Laws on State and Concurrent Subjects)Order, 1968 with effect from 1.11.1966 whereby in all the “existing laws”in its application to the Union Territory of Chandigarh, any referenceto the State of Punjab should be read as a reference to the Union A

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ATerritory of Chandigarh. The expression “existing laws” was definedin para 2(1)(b) of the Order. It is an accepted position that the RentAct was not a part of the “existing laws” as the area forming the UnionTerritory of Chandigarh was not an “urban area” within the Rent Act.

7. The Central Government by Notification dated 13.10.1972 andBpublished in the Official Gazette on 04.11.1972 had declared the areacomprising of the Union Territory of Chandigarh to be an “urban area”for the Rent Act. This Notification was struck down by the Punjab andHaryana High Court in Harkishan Singh v. Union of India[1], on theshort ground that no notification extending the Rent Act to the UnionTerritory of Chandigarh as an “urban area” under Section 2(j) of theCRent Act could have been issued post reorganisation on 1.11.1966. TheRent Act was not operative in Chandigarh in terms of Section 88 ofthe Reorganisation Act nor any part would become operative by anotification under Section 87 without necessary adaptation. Thus, neitherthe Order nor the Notification dated 13.10.1972 could have the effectDof making the Rent Act applicable to the Union Territory of Chandigarh.

8. The Parliament had thereupon to rectify the defect exercisedits power under Article 246(4) of the Constitution by enacting the EastPunjab Urban Rent Restriction (Extension to Chandigarh) Act, 1974(for short, the ‘Extension Act’) to extend the Rent Act, subject tomodification specified in the Schedule, to the Union Territory ofEChandigarh. This enactment had stipulated that the Rent Act would bedeemed to be in force from 04.11.1972, that is the day on which theearlier Notification that was quashed in Harkishan Singh’s case(supra), was made effective. Thereby all proceedings for evictioninitiated in view of the Notification dated 04.11.1972 were regularised.FThe Extension Act was in principle and substance a Parliamentaryenactment to incorporate by reference and to avoid repetition all theprovisions of the Rent Act to the Union Territory of Chandigarh.

9. On 17.12.1976, when the Parliament was not in session, thePresident had promulgated Ordinance 14 of 1976 by which the RentGAct was amended by the introduction of an Explanation and additionof sub-section (4A) to Section 13 and sub-section (2A) to Section 19.New sections 13A, 18A and 18B were inserted and in Schedule II theform of summons to be issued under Section 13A was added. ThisOrdinance was allowed to lapse and was not enacted as law thereafter.

H1 AIR 1975 Punj. & Har 160 (FB)

10. In 1982, the Parliament passed the East Punjab RentRestriction (Chandigarh Amendment) Act replacing the words “EastPunjab” with the word “Punjab” and by substituting the definition of“non-residential building” in the Rent Act as applicable to Chandigarh.Lapsed amendments to the Rent Act vide Ordinance 14 of 1976 werenot incorporated.

11. In 1985, the provisions of the Rent Act as applicable to theState of Punjab were amended by the Legislature of the State of Punjabvide Punjab Act 2 of 1985 by inserting new Sections 13A, 18A and18B, a new Second Schedule and amendments in Sections 13 and 19substantially similar to those that had been effected by Ordinance 14of 1976. A new definition of “specified landlord” was also added. Theseamendments came into force on 16.11.1985.

12. Central Government thereafter issued Notification dated15.12.1986 purportedly in exercise of the power under Section 87 ofthe Reorganisation Act extending the provisions of the Punjab Act 2 of1985, subject to the modifications mentioned therein, to the Rent Actapplicable to the Union Territory of Chandigarh, that is, the ExtensionAct.

13. The extension whether permissible by means of a notificationissued under Section 87 of the Reorganisation Act was challenged, butrejected by this Court in Ramesh Birch v. Union of India[2]. We shallsubsequently refer to this judgment.

14. The provision under challenge before us, namely Section 13-B was inserted in the Rent Act vide East Punjab Urban Rent Restriction(Amendment) Act, 2001 (for short, the ‘Amendment Act’) as enactedby the State Legislature of Punjab. Section 13-B and other relatedsections in the Amendment Act were extended to the Union Territoryof Chandigarh by the Central Government vide Notification dated09.10.2009 in purported exercise of powers under Section 87 of theReorganisation Act.

15. To avoid prolixity, we do not propose to refer to the factualmatrix as after hearing arguments we had declined to interfere on factsand had heard arguments on legal issues that can be summarised asunder:

2 1989 Supp (1) SCC 430

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A(i) The Notification dated 09.10.2009 which extends theAmendment Act to Chandigarh by an executive actionin exercise of powers under Section 87 of theReorganisation Act amounts to and suffers from the viceof excessive delegation as it amends the rent legislationin force in Chandigarh, that is, the Extension Act wereBenacted by the Parliament in exercise of powers underArticle 246(4) of the Constitution.

(ii) The State Legislature of Punjab was incompetent toenact the Amendment Act, for the subject matter andrights of Non-Resident Indians fall under the field of‘Citizenship, Naturalization and Aliens’ under Entry17 of List I; ‘Extradition’ under Entry 18 of List I and‘Admission into, and Emigration and Expulsion fromIndia; Passports and Visas’ under Entry 19 of List Iof the Seventh Schedule. The subject matter oflegislation is in direct conflict with and repugnant tovarious Central enactments concerning the rights ofNon-Resident Indians including the Citizenship Act, 1955and the Foreign Exchange Management Act, 1999, etc.

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(iii) Section 13-B which gives a preferential right to claimeviction to Non-Residents, including foreigners, isarbitrary, unreasonable and discriminatory, and createsan artificial classification for benefit of Non-Residentsvis-à-vis Indian Residents and thus, violates Article 14of the Constitution.

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FFor the sake of convenience and clarity, we shall deal with eachof the respective submissions and give our reasons separately.

A. Whether Notification dated 09.10.2009 issued underSection 87 of the Reorganisation Act extending Section13-B of the Rent Act to Chandigarh by executive actionis invalid?G

16. In Ramesh Birch (supra), earlier Constitutional Benchjudgment of this Court in Re Delhi Laws Act 1912, Ajmer Merwara(Extension of Laws) Act, 1947 and Part C States (Laws) Act, 1950[3]was examined and elucidated after considering seven different opinions H3 AIR 1951 SC 332

of Kania, CJ., Fazl Ali, Patanjali Sastri, Mahajan, Mukherjea, Das andBose JJ. All the Judges except Kania, CJ. and Mahajan, J. had upheldprovisions of Section 7 of the Delhi Laws Act, 1912, Section 2 of theAjmer Merwara (Extension of Laws) Act, 1947 and the first portionof Section 2 of Part C States (Laws) Act. However, Bose andMukherjea, JJ. had for reasons stated by them formed the majority withKania, CJ. and Mahajan, J. in striking down second part of Section 2of Part C States (Laws) Act, 1950 by which the executive had beengiven the power to make a provision in any enactment so extended forthe repeal or amendment of any corresponding law (other than a CentralAct) which was for the time being applicable to that Part C State. Thispart of Section 2, it was observed, suffers from the vice of excessivedelegation and abdication of power by the Legislature. On thetouchstone of an earlier decision of the Privy Council in R. v. Burah[4],this Court in Ramesh Birch (supra) had upheld constitutional validityof Section 87 of the Reorganisation Act, holding it to be valid on the‘policy and guideline’ theory if one has proper regard to the context ofthe Reorganisation Act and the object and purpose sought to beachieved by Section 87 of the Reorganisation Act. It was observed:

“23. But, these niceties apart, we think that Section 87 is quitevalid even on the “policy and guideline” theory if one has properregard to the context of the Act and the object and purposesought to be achieved by Section 87 of the Act. The judicialdecisions referred to above make it clear that it is not necessarythat the legislature should “dot all the i’s and cross all the t’s” ofits policy. It is sufficient if it gives the broadest indication of ageneral policy of the legislature. If we bear this in mind and haveregard to the history of this type of legislation, there will be nodifficulty at all. Section 87, like the provisions of Acts I, II andIII, is a provision necessitated by changes resulting in territoriescoming under the legislative jurisdiction of the Centre. These areterritories situated in the midst of contiguous territories whichhave a proper legislature. They are small territories falling underthe legislative jurisdiction of Parliament which has hardly sufficienttime to look after the details of all their legislative needs andrequirements. To require or expect Parliament to legislate forthem will entail a disproportionate pressure on its legislative AB

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schedule. It will also mean the unnecessary utilisation of the timeof a large number of members of Parliament for, except the few(less than ten) members returned to Parliament from the Unionterritory, none else is likely to be interested in such legislation.In such a situation, the most convenient course of legislating forthem is the adaptation, by extension, of laws in force in otherareas of the country. As Fazl Ali, J. pointed out in the Delhi LawsAct case [AIR 1951 SC 332 : 1951 SCR 747] it is not a powerto make laws that is delegated but only a power to “transplant”laws already in force after having undergone scrutiny byParliament or one of the State legislatures, and that too, withoutany material change. There is no dispute before us — and it hasbeen unanimously held in all the decisions — that the power tomake modifications and restrictions in a clause of this type is avery limited power, which permits only changes that the differentcontext requires and not changes in substance. There is certainlyno power of modification by way of repeal or amendment as isavailable under Section 89.”

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17. Ramesh Birch (supra) had held that once a policy ofextension of the Rent Act is clear and permissible, it would seem onlynatural as a necessary corollary that the executive should be permittedto extend future amendments in the Rent Act to the Union Territory ofEChandigarh. After extensively examining the different judgments andthe views expressed in Re Delhi Laws Act (supra), the notification wasupheld with the following findings:

“31. There is certainly a good deal of force in these argumentsbut we think that they proceed on an incorrect view of the effectof the notification impugned in the present case. We might havebeen inclined to accept the submissions of the learned Counselhad the effect of the notification been to extend law which is in“actual conflict” with any parliamentary enactment or which hasthe effect of “throwing out” any existing law in the Union territory.To borrow an expression used in an analogous context, we wouldhave considered the validity of the extension doubtful had theextended provisions been repugnant to an Act of Parliament inforce in the Union territory. So long as that is not the effect orresult, we think, there is no reason to construe the scope ofSection 87 in the restricted manner suggested by counsel. It isno doubt true that Section 87 permits an extension because there F

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is no law in the Union territory in relation to a particular subjectand Parliament has not the requisite time to attend to the matterbecause of its preoccupations. But this purpose does not requirefor its validity that there should be no existing law of Parliamentat all on a subject. Again the concept of “subject” for thepurposes of this argument is also an elastic one the precise scopeof which cannot be defined. The concept of vacuum is as muchrelevant to a case where there is absence of a particular provisionin an existing law as to a case where there is no existing law atall in the Union territory on a subject. For instance, if Parliamenthad not enacted the 1974 Act but had only enacted an extensionof the Transfer of Property Act to Chandigarh, could it have beensaid that a subsequent notification cannot extend the provisionsof the 1949 Act to Chandigarh because the subject of leases isgoverned by the Transfer of Property Act which has been alreadyextended and there is, therefore, no “vacuum” left which couldbe filled in by such extension ? Again, suppose, initially, a RentAct is extended by Parliament which does not contain a provisionregarding one of the grounds on which a landlord can seekeviction — say, one enabling the owner to get back his housefor reoccupation — and then the Government thinks that anotherenactment containing such a provision may also be extended, canit not be plausibly said that the latter is a matter on which thereis no legislation enacted in the territory and that the extension ofthe latter enactment only fills up a void or vacancy ? Again,suppose the provisions of a general code like, say, the Code ofCivil Procedure are extended to the Union territory, should weconstrue Section 87 so as to preclude the extension of a lateramendment to one of the rules to one of the orders of the CPCmerely on the ground that it will have effect of varying oramending an existing law? We think it would not be correct tothus unduly restrict the scope of a provision like Section 87. Thebetter way to put the principle, we think, is to say that theextension of an enactment which makes additions to the existinglaw would also be permissible under Section 87 so long as it doesnot, expressly or impliedly, repeal or conflict with, or is notrepugnant to, an already existing law. In this context, referencecan usefully be made to the observations in Hari Shankar Bagla[Harishankar Bagla v. State of M.P., (1955) 1 SCR 380] at p.391, which seem to countenance the “bypassing” of an existing AB

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Alaw by a piece of delegated legislation and to draw the line onlyat its attempt to repeal the existing law, expressly or by necessaryimplication. In a sense, no doubt, any addition, however small,does amend or vary the existing law but so long as it does notreally detract from or conflict with it, there is no reason why itshould not stand alongside the existing law. In our view SectionB87 should be interpreted constructively so as to permit its objectbeing achieved rather than in a manner that will detract from itsefficacy or purpose. We may also note, incidentally in legislativepractice also, such successive changes have been allowed to standtogether. Lachmi Narain v. Union of India [(1976) 2 SCC 953]Cnarrates how the Bengal Finance (Sales Tax) Act, 1941 extendedto Delhi under Act III was subsequently amended by ParliamentActs of 1956 and 1959 but was also sought to be modified byvarious notifications from time to time. These notifications werechallenged on the ground that the power to extend by notificationcould be exercised only once and that the impugned notificationDdid not merely extend but also effected modifications of asubstantial nature in the Act sought to be extended. No contentionwas, however, raised that after the intervention of Parliament in1956 and 1959 there could have been no extension of the BengalAct as it would have the effect of adding to or varying theEParliamentary legislation apparently because they could stand sideby side with each other. We, therefore, think that since theextension of the 1985 Act only adds provisions in respect ofaspects not covered by the 1974 Act and in a manner notinconsistent therewith, the impugned notification is quite valid andnot liable to be struck down.”

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18. The distinction between conditional legislation and delegatedlegislation was explained by this Court in Vasu Dev Singh v. Union ofIndia[5]in the following words:

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“16. … The distinction between conditional legislation anddelegated legislation is clear and unambiguous. In a conditionallegislation the delegatee has to apply the law to an area or todetermine the time and manner of carrying it into effect or atsuch time, as it decides or to understand the rule of legislation, it would be a conditional legislation. The legislature in such a casemakes the law, which is complete in all respects but the same isnot brought into operation immediately. The enforcement of thelaw would depend upon the fulfilment of a condition and what isdelegated to the executive is the authority to determine byexercising its own judgment as to whether such conditions havebeen fulfilled and/or the time has come when such legislationshould be brought into force. The taking effect of a legislation,therefore, is made dependent upon the determination of such factor condition by the executive organ of the Government.Delegated legislation, however, involves delegation of rule-makingpower of legislation and authorises an executive authority to bringin force such an area by reason thereof. The discretion conferredon the executive by way of delegated legislation is much wider.Such power to make rules or regulations, however, must beexercised within the four corners of the Act. Delegated legislation,thus, is a device which has been fashioned by the legislature tobe exercised in the manner laid down in the legislation itself...

17. In Hamdard Dawakhana v. Union of India[6] this Courtstated:

17. In Hamdard Dawakhana v. Union of India[6] this Courtstated:

“The distinction between conditional legislation and delegatedlegislation is this that in the former the delegate’s power is thatof determining when a legislative declared rule of conduct shallbecome effective; Hampton & Co. v. U.S. and the latter involvesdelegation of rule-making power which constitutionally may beexercised by the administrative agent. This means that thelegislature having laid down the broad principles of its policy inthe legislation can then leave the details to be supplied by theadministrative authority. In other words by delegated legislationthe delegate completes the legislation by supplying details withinthe limits prescribed by the statute and in the case of conditionallegislation the power of legislation is exercised by the legislatureconditionally leaving to the discretion of an external authority thetime and manner of carrying its legislation into effect as also thedetermination of the area to which it is to extend;””

6 AIR 1960 SC 554

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AIn the present case, the extension of the Amendment Act to theUnion Territory of Chandigarh falls within the ambit of conditionaldelegation and is valid and permissible.

19. In light of the aforesaid decisions and for the same reasonsas stated in Ramesh Birch (supra), we would reject the first contentionBraised by the appellants. Once a policy of extension of laws has beenlaid down by the Parliament and is clear and permissible, it would onlyseem as an inevitable fallout that the executive should be permitted toextend future amendments to the existing laws. Therefore, the challengepredicated on the doctrine of excessive delegation, separation of powers,doctrine of the law of agency, fails and must be rejected. Such challengeCmust also be rejected in view of the large number of eviction suits filedby Non-Resident Indian landlords on the strength of Notification dated09.10.2009 who would be left remediless if contentions to the contraryare accepted.

B. Whether amendments made vide the Amendment ActDwith regard to the rights of Non-Resident Indians bythe State Legislature of Punjab were beyond itscompetence?

20. The contention that the Amendment Act enacted by the StateLegislature of Punjab has overstepped the jurisdiction assigned to it orEhas encroached upon a forbidden field is determinable by finding outthe true nature and character or pith and substance of the AmendmentAct which turns upon construction of the entries in the legislative Listsunder the Seventh Schedule of the Constitution.

21. Relevant entries from the three Lists which are germane toFthe determination of nature and character of the Amendment Act are:

List I

Entry 17 – Citizenship, naturalisation and aliens.

Entry 18 – Extradition.

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Entry 19 – Admission into, and emigration and expulsion from,India; passports and visas.

List II

Entry 18 – Land, that is to say, rights in or over land, landHtenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land;land improvement and agricultural loans; and colonization.

List III

Entry 6 – Transfer of property other than agricultural land;registration of deeds and documents.

Entry 7 – Contracts including partnership, agency, contractsof carriage, and other special forms of contracts, but not includingcontracts relating to agricultural land.

Entry 13 – Civil procedure, including all matters included inthe Code of Civil Procedure at the commencement of thisConstitution, limitation and arbitration.

22. The entries in the three Lists are not mutually exclusive.Further, the entries are fields of legislation that demarcate the area andheads of legislation. Accordingly, they should receive the widestconstruction unless their rigour and import need to be castrated bycompeting entries and other parts of the Constitution. Interpretation ofeach entry has to be fair and liberal so as to cover all incidental andsubsidiary matters which can reasonably be said to have beencomprehended in it. The entries should not be interpreted in a narrowand pedantic sense. “Pith and substance” doctrine states that if thelegislation is covered by an entry, that is, it is within the permittedjurisdiction of the legislature, any incidental encroachment in the rivalfield has to be disregarded. Only when wide construction of an entryleads to heads-on-clash with another entry in the same or different List,the principle of harmonious construction applies to reconcile the conflictand to give effect to each of them.

23. Repugnancy arises between a Central and a State Act whenthere is a direct and irreconcilable conflict between the two enactments.It is when there is an irreconcilable conflict between the two legislationsthat the Central Legislation prevails by virtue of Article 254 of theConstitution. Such repugnancy or inconsistency is not to be readilyinferred as the entries in the three Lists permit incidental encroachment.Consequently, every attempt must be made to placate the conflict andonly when and in case of oppugnant clash, the Court should proceedto strike down the legislation as trespassing beyond its legitimate andlegal confines.

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A24. In Vijay Kumar Sharma and Others v. State of Karnatakaand Others[7], this Court referring to the “pith and substance” doctrinehad held that a provision in a particular legislation in order to give effectto its dominant purpose may incidentally encroach on the same subjectmatter as covered by the provision of another legislation. Such partialcoverage of the same area in a different context and to achieve aBdifferent purpose does not bring about the repugnancy which is intendedto be covered by Article 254(2). Both the legislations must besubstantially on the same subject matter for repugnancy to arise andto attract Article 254. If the subject matters covered by the legislationsare different, then merely because the two legislations refer to some Callied or cognate subjects, they do not cover the same field.

Callied or cognate subjects, they do not cover the same field.

25. A Constitutional Bench judgment of this Court in InduBhushan Bose v. Rama Sundari Debi and Another[8] had inter aliaexamined Entry 3 in List I, Entry 18 in List II and Entries 6, 7 and 13in List III to observe that the general power of legislating in respect ofDrelationship between landlord and tenant can be traced either underEntry 18 of List II or Entries 6 and 7 of List III. The expression ‘landtenures including the relation of landlord and tenant’ appearing inEntry 18 of List II, it was observed, was used only with reference tothe relationship of landlord and tenant in respect of vacant lands anddoes not cover tenancy of buildings or house accommodation.ENevertheless, the Court did not give a finding in definite terms as therelationship of landlord and tenant in question was in respect of a houseaccommodation situated in a cantonment area and therefore wascovered by Entry 3 of List I which vests exclusive power to make lawsfor the cantonment areas in the Parliament. Subsequent decision inJaisingh Jairam Tyagi and Others v. Mamanchand Ratilal AgarwalFand Others[9] and a Constitution Bench judgment in V. DhanapalChettiar v. Yesodai Ammal[10]substantially follow Indu Bhushan(supra) to hold that the subject matter of housing and accommodationfalls within the purview of the Concurrent List.

26. In Accountant and Secretarial Services Pvt. Ltd. andGAnother v. Union of India and Others[11], this Court had examined the 7 (1990) 2 SCC 562

8 (1969) 2 SCC 289

9 (1980) 3 SCC 162

question of repugnancy and interplay between the Central enactment,viz. the Public Premises (Eviction of Unauthorised Occupants) Act, 1971based on the pattern of the West Bengal Public Land (Eviction ofUnauthorised Occupants) Act, 1962 and the West Bengal PremisesTenancy Act, 1956 and the question which of these enactments wouldprevail. The Court had interpreted Entries 3, 32, 43 and 44 of List I,Entry 18 of List II and Entries 5, 6 and 7 of the List III and thecorresponding entries in the Government of India Act, 1935 to hold thatall the three legislations were passed in exercise of powers conferredwith respect to matters contained in the Concurrent List. In view ofthe repugnancy and conflict between the Central enactment on one handand the State law on the other, in terms of Article 254, the Centralenactment shall prevail. Further, notwithstanding the earlier precedents,the Court had examined the question of the relevant entry applicableto the tenancy legislation and rejected the contention that Entry 18 ofList II should be interpreted as encompassing within its ambit legislationon the relationship of landlord and tenant in regard to housing andbuildings. Setting out several reasons it was observed that the powerto legislate in respect of tenanted premises would fall within the ambitand scope of Entries 6, 7 and 13 of the Concurrent List and would notbe referable to Entry 18 of List II. The expression ‘land’ in Entry 18of List II should be given as wide a construction as possible, but has tobe read with the relevant entries in other Lists to give meaning andcontent to all of them. Inclusion of buildings and housing in theConcurrent List is appropriate and to place buildings and housing withinthe ambit of the expression ‘land’ in Entry 18 of List II would denudeother entries in Lists I and III concerning transfer of property, devolutionand succession of land and buildings, etc. of their vigour and wouldrender them otiose.

27. The Amendment Act on its true construction and by referenceto the doctrine of “pith and substance” is relatable to the relationshipof landlord and tenant for housing and accommodation and falls underthe Concurrent List. The dominant intention or “pith and substance”of the legislation is to regulate the relationship between Non-ResidentIndian landlords and tenants for housing and accommodation. Merelybecause the Amendment Act to achieve its object touches upon thesubject matter in respect of Non-Resident Indian landlords in the RentAct, does not make the Amendment or the Rent Act ultra vires theConstitution. The Rent Act as amended by the Amendment Act and AB

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Athe Central legislations relating to citizenship, regulation of the right ofnon-residents to own and acquire immovable property, cover differentsubject matters and serve different objects and there is no repugnancybetween the Rent Act and any Central enactment like Citizenship Act,Foreign Exchange Regulation Act, etc. We do not subscribe to the viewthat the legislative lists under the Seventh Schedule envisage andBmandate separate legislation by the Central Government for Non-Resident Indian landlords.

28. Keeping in view the aforesaid position, the Amendment Actenacted by the State legislature was well within its competence. Wewould, however, note that in the context of the Union Territory ofCChandigarh and as the subject matter falls within the Concurrent List,it will be immaterial to decide on the competence of the legislating body.The power to make laws in respect of a Union Territory vests withthe Parliament under Article 246(4). In terms of Section 87 of theReorganisation Act, the power to extend laws to the Union TerritoryDof Chandigarh vests with the Central Government, that is the Parliamentor the Central Executive, as the case may be, and is permissible.

C. Whether Section 13-B of the Rent Act is arbitrary andunreasonable inasmuch as it does not afford any legalremedy to the tenants?

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29. Before we delve into this question, we would reproduceSection 19(2-B) of the Rent Act which reads as under:

“19. (2-B) The owner, who is a Non-Resident Indian and whohaving evicted a tenant from a residential building or a scheduledFbuilding and/or non-residential building in pursuance of an ordermade under Section 13-B, does not occupy it for a continuousperiod of three months from the date of such eviction, or letsout the whole or any part of such building from which the tenantwas evicted to any person, other than the tenant in contraventionof the provisions of sub-section (3) of Section 13-B, shall beGpunishable with imprisonment for a term, which may extend tosix months or with fine which may be extended to one thousandrupees or both.”

The provision incorporates statutory safeguards to check andpenalise deceitful and two-faced landlords and gives the right ofHrestitution to the defrauded tenant.

30. Section 18-A of the Rent Act prescribes a summary procedurefor recovery of possession applicable to eviction petitions filed by Non-Resident Indian landlords under Section 13-B of the Rent Act. Sub-sections (4), (5), (6) and (8) to Section 18-A of the Rent Act arereproduced:

“18-A. (4) The tenant on whom the service of summons has beendeclared to have been validly made under sub-section (3), shallhave no right to contest the prayer for eviction from the residentialbuilding or scheduled building and/or non-residential building, asthe case may be, unless he files an affidavit stating the groundson which he seeks to contest the application for eviction andobtains leave from the Controller as hereinafter provided, and indefault of his appearance in pursuance of the summons or hisobtaining such leave, the statement made by the specified landlordor, as the case may be, the widow, widower, child, grandchild orthe widowed daughter-in-law of such specified landlord or theowner, who is a non-resident Indian in the application for evictionshall be deemed to be admitted by the tenant and the applicantshall be entitled to an order for eviction of the tenant.

(5) The Controller may give to the tenant leave to contest theapplication if the affidavit filed by the tenant discloses such factsas would disentitle the specified landlord or, as the case may be,the widow, widower, child, grandchild or widowed daughter-in-law of such specified landlord or the owner, who is a non-residentIndian, from obtaining an order for the recovery of possessionof the residential building or scheduled building and/or non-residential building, as the case may be, under Section 13-A orSection 13-B.

(6) Where leave is granted to the tenant to contest the application,the Controller shall commence the hearing on a date not laterthan one month from the date on which leave is granted to thetenant to contest and shall hear the application from day to daytill the hearing is concluded and application decided.

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Aby the Controller in accordance with the procedure specified inthis section:

Provided that the High Court may, for the purpose of satisfyingitself that an order made by the Controller under this section isin accordance with law, call for the records of the case and passBsuch order in respect thereto as it thinks fit.”

31. In Baldev Singh Bajwa v. Monish Saini[12], this Courtreferring to the provisions of Section 18-A of the Rent Act had observed:

“11. [...] These provisions indicate that in order to obtain leaveto contest the application of the landlord, the tenant has to fileCan affidavit taking the grounds on which he wants to contest thatapplication. If the affidavit filed by the tenant discloses such factsas would disentitle the NRI landlord from obtaining an order forthe recovery of immediate possession, the Controller would grantleave to the tenant to contest the landlord’s application forDeviction. Once the leave is granted, the application is required tobe disposed of as per the procedure applicable to the Court ofSmall Causes. The Controller is required to commence thehearing within one month from the date on which the leave isgranted to the tenant to contest. The application shall be heardday to day till hearing is concluded and application decided. TheEorder to direct recovery of possession of the suit accommodationmade by the Controller is not subject to appeal or second appeal.However, the High Court may call for the record of the case tosatisfy itself that the order passed by the Controller is inaccordance with law and may pass such order as it thinks fit.”

F32. In Ravi Dutt Sharma v. Ratan Lal Bhargava[13], this Courthad discussed the object of rent control legislation and also insertionsmade to provide expeditious, effective and speedy remedy for a classof landlords who require the premises for bona fide use, to hold:

“7. […] The dominant object of the amending act [is] to provideGa speedy, expeditious and effective remedy for a class oflandlords contemplated by Sections 14(1)(e) and 14-A and foravoiding unusual dilatory process provided otherwise by the RentAct. It is common experience that suits for eviction under the

Act take a long time commencing with the Rent Controller andending up with the Supreme Court. In many cases experiencehas indicated that by the time the eviction decree became finalseveral years elapsed and either the landlord died or the necessitywhich provided the cause of action disappeared and if there wasfurther delay in securing eviction and the family of the landlordhad by then expanded, in the absence of accommodation themembers of the family were virtually thrown on the road. It wasthis mischief which the Legislature intended to avoid byincorporating the new procedure in Chapter III-A. TheLegislature in its wisdom thought that in cases where the landlordsrequired their own premises for bona fide and personal necessitythey should be treated as a separate class along with thelandlords covered by Section 14-A and should be allowed to reapthe fruits of decrees for eviction within the quickest possible time.It cannot, therefore, be said that the classification of suchlandlords would be an unreasonable one because such aclassification has got a clear nexus with the objects of theamending Act and the purposes which it seeks to subserve.”

33. Section 18-A of the Rent Act requires the Controller to takeup the matter on a day-to-day basis until the hearing on an applicationfor leave to defend is concluded. No litigant can possibly object to aprovision stipulating day-to-day hearing which ensures speedy,expeditious and effective decisions. The observations of this Court inRavi Dutt Sharma (supra) are apposite. Section 18-A also states thatthe decision of the Controller is final as no appeal or second appeallies against the order of eviction except that the High Court could, tosatisfy itself of the correctness of the decision, examine the matter bycalling for the records of the case. Repelling a similar challenge on theground that 25-B of the Delhi Rent Control Act, 1958 does not providefor an appeal or second appeal against an order of eviction, in KewalSingh v. Smt. Lajwanti[14]it was observed:

“19. […] An appeal is purely a creature of the statute and thisright has not been given in order to cut out unnecessary delay.Instead the highest Court of the State has been given a widepower of revision where the said Court can examine the caseof the tenant and the landlord and the validity of the order passed AB

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by the Controller. The right of the tenant, therefore, is sufficientlysafeguarded by the proviso to sub-section (8) of S. 25B of theAct referred to above. In order to give relief to the tenant againstany apparent error of law or fact where no revision has beenfiled in the High Court the statute confers power of review onthe Controller.”

34. On the requirement of ‘bona fide need’ of Non-ResidentIndian landlords under Section 13-B in Baldev Singh Bajwa (supra),it was elucidated:

“14. The phrase “bona fide requirement” or “bona fide need” or“required reasonably in good faith” or “required”, occurs in almostall Rent Control Acts with the underlying legislative intent whichhas been considered and demonstrated innumerable times byvarious High Courts as also by this Court, some of which wewould like to refer to. In Ram Dass v. Ishwar Chander it issaid that the bona fide need should be genuine and honest,conceived in good faith. It was also indicated that the landlord’sdesire for possession, however honest it might otherwise be, hasinevitably a subjective element in it, and that desire, to becomea “requirement” in law must have the objective element of a“need”, which can be decided only by taking all the relevantcircumstances into consideration so that the protection affordedto a tenant is not rendered illusory or whittled down.

15. In Bega Begum v. Abdul Ahad Khan it was held by thisCourt that the words “reasonable requirement” undoubtedlypostulate that there must be an element of need as opposed to amere desire or wish. The distinction between desire and needshould doubtless be kept in mind but not so as to make even thegenuine need as nothing but a desire.

16. In Surjit Singh Kalra v. Union of India a three-JudgeBench of this Court has held as under:

“20. The tenant of course is entitled to raise all relevantcontentions as against the claim of the classified landlords. Thefact that there is no reference to the words bona fide requirementin Sections 14-B to 14-D does not absolve the landlord fromproving that his requirement is bona fide or the tenant fromshowing that it is not bona fide. In fact every claim for eviction against a tenant must be a bona fide one. There is also enoughindication in support of this construction from the title of Section25-B which states ‘special procedure for the disposal ofapplications for eviction on the ground of bona fiderequirement’.”

17. In Shiv Sarup Gupta v. Dr. Mahesh Chand Gupta thisCourt while dealing with the aspect of bona fide requirement hassaid that the sense of felt need which is an outcome of a sincere,honest desire, in contradistinction with a mere pretence or pretextto evict a tenant, refers to a state of mind prevailing with thelandlord. The only way of peeping into the mind of the landlordis an exercise undertaken by the judge of facts by placing himselfin the armchair of the landlord and then posing a question tohimself — whether in the given facts, substantiated by thelandlord, the need to occupy the premises can be said to be natural,real, sincere and honest.

18. From the aforesaid decisions the requirement of the landlordof the suit accommodation is to be established as a genuine needand not a pretext to get the accommodation vacated. Theprovisions of Sections 18-A(4) and (5) concede to the tenant’sright to defend the proceedings initiated under Section 13-Bshowing that the requirement of the landlord is not genuine orbona fide. The legislative intent for setting up of a specialprocedure for NRI landlords is obvious from the legislative textwhich has been deliberately designed making distinction betweenthe ordinary landlords and special category of landlords. TheController’s power to give leave to contest the application filedunder Section 13-B is restricted by the condition that the affidavitfiled by the tenant discloses such fact as would disentitle thelandlord from obtaining an order for recovery of possession. Itis needless to say that in the summary proceedings the tenant’sright to contest the application would be restricted to theparameters of Section 13-B of the Act. He cannot widen thescope of his defence by relying on any other fact which doesnot fall within the parameters of Section 13-B. The tenant’sdefence is restricted and cannot go beyond the scope of theprovisions of the Act applicable to the NRI landlord. UnderSection 13-B the landlord is entitled to eviction if he requires the A

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Asuit accommodation for his or her use or the use of the dependant,who ordinarily lives with him or her. The requirement wouldnecessarily have to be genuine or bona fide requirement and itcannot be said that although the requirement is not genuine orbona fide, he would be entitled to the ejectment of the tenantnor can it be said that in no circumstances will the tenant not beBallowed to prove that the requirement of the landlord is notgenuine or bona fide. A tenant’s right to defend the claim of thelandlord under Section 13-B for ejectment would arise if thetenant could be able to show that the landlord in the proceedingsis not an NRI landlord; that he is not the owner thereof or thatChis ownership is not for the required period of five years beforethe institution of proceedings and that the landlord’s requirementis not bona fide.”

35. In terms of Section 13-B of the Rent Act, the landlord shouldhave been the owner of the premises for five years before the evictionDpetition is filed. Such landlord/owner is permitted to file an evictionpetition only once during the lifetime and in respect of one building. Sub-section (3) to Section 13-B of the Rent Act imposes a restriction onsale or lease of the premises for a period of five years from the dateof taking possession from the tenant. On breach of the conditions/Erestrictions mentioned in sub-section (3) to Section 13-B, the tenant hasa right to seek restoration of possession. Sub-section (2-B) to Section19 imposes a maximum punishment of six months imprisonment or afine of one thousand rupees or both in case the landlord does not occupythe premises for a continuous period of three months after getting aneviction order or lets out the whole or any part of the premises to aFthird person other than the tenant in contravention of the provisions ofsub-section (3) to Section 13-B. The reasoning in Baldev Singh Bajwa(supra) exposits that these restrictions and conditions are strong in-builtchecks to ensure that the need of the landlord should be genuine andbona fide and the tenant should not be subjected to frivolous andGdubious eviction order by relying on false assertions.

36. The presumption raised with regard to the genuine need ofthe landlord as pleaded in the petition should not be read as an axiomor self-evident truth, which entitles the landlord and mandates the Courtto pass a decree of eviction. This is clear from subsequent elucidationHby this Court in paragraphs 20 and 21 in Baldev Singh Bajwa (supra).

The true ratio, in our opinion, is reflected in paragraph 25 which readsas under:

“25. On the interpretation given by us and on a plain reading ofthe provisions, once in a lifetime possession is given to an NRIto get one building vacated in a summary manner. A non-residentIndian landlord is required to prove that: (i) he is an NRI; (ii)that he has returned to India permanently or for a temporaryperiod; (iii) requirement of the accommodation by him or hisdependant is genuine; and (iv) he is the owner of the propertyfor the last five years before the institution of the proceedingsfor ejectment before the Controller. The tenant’s affidavit askingfor leave to contest the NRI landlord’s application should confineitself to the grounds which NRI landlord is required to prove, toget ejectment under Section 13-B of the Act. The Controller’spower to give leave to contest the application filed under Section13-B is circumscribed to the grounds and inquiry on the aspectsspecified in Section 13-B. The tenant would be entitled for leaveto contest only if he makes a strong case to challenge thosegrounds. Inquiry would be confined to Section 13-B and no otheraspect shall be considered by the Controller.”

The requirement of a ‘strong case’ for obtaining leave to defendmeans a good case that brings to fore reasonable and well-groundedbasis on which the tenant seeks leave to contest the evictionproceedings. It does not mean setting up and establishing at that stagea case beyond any scintilla of doubt and debate. The grounds and pleasraised should reflect clear and strong defence and relate to the groundsmentioned in paragraph 25 in Baldev Singh Bajwa (supra). Thestandard applied is similar to parameters elucidated in Inderjeet Kaur

v. Nirpal Singh[15], in which this Court had held that the leave to defendshould not be granted on mere asking but when the pleas and contentionsraise triable issues and the dispute on facts demands that the matterbe properly adjudicated after ascertaining the truth of affidavits filedby the witnesses in their cross-examination. Each case has to be decidedon its merits and not on the basis of any pre-conceived suppositionsand presumptions. By providing for a simplified procedure of evictionby the Non-Resident Indians, Section 13-B does not dilute the rights oftenants. It gives a chance to the tenants on merits to establish their 15 (2001) 1 SCC 706

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Acase and when justified and necessary to take the matter to trial. Byno means, therefore, Section 13-B can be held to be arbitrary andunreasonable.

37. The expression ‘one building’ appearing in sub-clause (2)to Section 13-B was examined by a three Judge Bench of this CourtBin Swami Nath v. Nirmal Singh[16] by referring to the earlier judgmentof this Court in Baldev Singh Bajwa (supra), to observe:

“13. Reliance was placed on the decision of this Court in BaldevSingh Bajwa v. Monish Saini where the same question hadcome up for consideration and it was observed that on a plainCreading of the provisions of Section 13-B, it would be obviousthat once in a lifetime possession is given to an NRI to get onebuilding vacated in a summary manner. It was also submitted thatthe ownership of the respondent landlord in respect of only onebuilding had not been disputed by the petitioners and the onlycontention that was raised on their behalf was that each separateDtenancy in a building would amount to a separate unit and afterexhausting the right of summary possession once, it was no longeravailable to the NRI landlord to exercise such an option for thesecond time to a particular building, which contention had beennegated by the courts below.

E14. We have carefully considered the submissions made on behalfof the respective parties and we are unable to agree with thesubmissions made on behalf of the petitioners. The interpretationsought to be given to the proviso to Section 13-B(1) of the 1949Act would lead to an absurd situation which was notcontemplated by the legislature while introducing the provisionsFof Section 13-B by way of amendment in 2001. The very objectof the amendment would be frustrated if the narrow andconstricted meaning being canvassed on behalf of the petitionersis to be accepted.

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15. The provisions of Section 13-B of the 1949 Act have beenGcorrectly interpreted and dealt with in Baldev Singh Bajwa caseand in that view of the matter, the special leave petitions mustfail and are dismissed. …”

The third contention is accordingly rejected.

H16 (2010) 9 SCC 452

D. Whether classifying Non-Resident Indian landlords asa separate category renders Section 13-B invalid andultra vires Article 14 of the Constitution?

38. Legislature’s primary function is to make laws for all ordifferent groups or classes of persons. The lawmakers as electedrepresentatives are in a better position than any other body which isremoved from local and other circumstances, to know the needs,requirements and expectations of citizens. It, therefore, seems onlylogical that the legislature possesses the power to distinguish and classifypersons or things subjected to such laws. Such a classification, however,must pass the muster of Article 14 which proscribes hostile and invidiousdiscrimination. Recognising that Article 14 does not entirely prohibitclassification by grouping certain persons with special peculiarities in aspecial category to meet certain specific ends, this Court in RamKrishna Dalmia v. Justice S.R. Tendolkar[17] had postulated twoconditions which must be satisfied for a classification to withstand achallenge under Article 14, namely: i) the classification should befounded on intelligible differentia which distinguishes persons or thingsthat are grouped together from others left out of the group; and (ii) thedifferentia must have a rational relation or nexus to the object soughtto be achieved by the statute in question. In State of A.P. and Othersv. Nallamilli Rami Reddi and Others[18], this Court had furtherelucidated that a challenge on the ground of denial of equal treatmentwill not sustain when the legislature intends to classify persons under awell-defined class. A classification need not be scientifically perfect orlogically complete and would be justified unless it is palpably arbitrary.The test to judge the validity of any classification has to be practicaland pragmatic by looking beyond the classification to the purpose ofthe law, that is, the purpose or object of the legislation and thecircumstances which had prevailed when the law was passed and whichhad necessitated passing of that law. Not only this, there is apresumption as to constitutional validity of an enactment predicated onthe belief that the legislature understands and correctly appreciates theneed of its own people and is free to recognise degrees of harm andmay confine its restriction to only those cases where the need is deemedto be the clearest. The hardship that may result from the classification 17 1959 SCR 279: AIR 1958 SC 538

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Acannot be the basis for determining the validity of any statute. Thisrequires distinguishing between under-inclusiveness and over-inclusiveness. The former classification does not confer the same benefitor place the same burden on others who are similarly situated whereasover-inclusiveness includes not only those who are similarly situated withrespect to the purpose but others who are not so situated as well. TheBlatter is frowned upon but the former may pass the judicial test for thecourts do exercise tolerance to under-inclusiveness unless it is clearthat there is no fair reason for the law which would not require withequal force its extension to those whom it leaves untouched (SeePioneer Urban Land & Infrastructure Limited and Another v.CUnion of India and Others in Writ Petition (Civil) No. 43 of 2019decided on 09.08.2019).

39. The object and reasons for enacting Section 13-B in the RentAct vide the Amendment Act were explained in Baldev Singh Bajwa(supra) in the following words:D“The State Government had been receiving representations fromvarious NRI individuals and through their associations highlightingthe plight of Indian residents returning to India after long yearsabroad. It was represented that the NRIs having spent long yearsof their life abroad did not find conditions congenial in their ownEcountry on their return either to settle down or to take up anybusiness. On account of rigid legal provisions of the existing rentlaws, the NRIs were unable to recover possession of their ownresidential building from the tenants. The Government havingconsidered the situation had decided that the existing rentlegislation viz. the East Punjab Urban Rent Restriction Act, 1949Fshould be amended to provide relief to NRIs to enable them torecover possession of a residential or scheduled building and/orone non-residential building for their own use.”

The effect of Section 13-B and other provisions of the Rent Actwas explained as:G

“10. The amendment introduced in the Act created a specialclass of NRI landlords and reposed special rights in them torecover immediate possession from the tenants occupying theirpremises, provided such premises were required by them. Section13-B intends to provide immediate possession of theHaccommodation to the NRI landlord which is in possession of

the tenant if the landlord requires the same for his or her use orfor the use of anyone ordinarily living with him/her and isdependent on him or her. Sub-section (1) of Section 13-Bpostulates that the NRI landlord should be the owner of thebuilding from which he has asked ejectment of the tenant. Heshould require the same for his or her use or for the use of anyoneordinarily living with him/her and is dependent on him or her. Heshould be the owner of that building for five years before heapplied to the Controller for possession of such building. The rightunder Section 13-B of immediate possession could be availed ofonly once during the lifetime of such an owner/NRI landlord.Sub-section (2) of Section 13-B gives a choice to the NRIlandlord to select one among several other residential buildingsor scheduled buildings and/or non-residential buildings for thepurpose of eviction of the tenant from that premises. Residentialbuilding is defined in Section 2(g) to mean a building which isnot a non-residential building. Scheduled building is defined inSection 2(h) of the Act which means a residential building beingused by a person engaged in one or more of the professions,namely, lawyers, architects, dentists, engineers, veterinarysurgeons, medical practitioners including practitioners ofindigenous systems of medicine and who occupies the same partlyfor his business and partly for his residence. Sub-section (3) ofSection 13-B puts a restriction on the landlord to deal withbuilding of which he has taken possession by virtue of the orderpassed under Section 13-B of the Act of 1949. Under this sectionthe owner who recovers the possession of the building by virtueof the order passed under Section 13-B shall neither transfer iteither by sale or by any other mode nor shall he let it out for theperiod of five years from the date he took possession of thebuilding. In case there is a breach on the part of the owner whotook possession of the building, of any of the conditions, the tenantwho had been evicted would be entitled to apply to the Controllerfor an order directing that the tenant be restored back possessionof that building and on such a petition being moved, the Controllerwould pass an appropriate order. Apart from the restriction whichis imposed by sub-section (3) of Section 13-B on the landlord’sright to deal with the building of which he took possession underthe provisions of Section 13-B, a further restriction has been ABCD

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Aimposed on the landlord under Section 19(2-B) of the Act of1949. Section 19(2-B) contemplates that when the order forpossession is being passed in favour of the owner-landlord underSection 13-B, he is required to occupy the premises continuouslyfor the period of three months from the date of eviction of thetenant. He is prohibited from letting out the whole or any part ofBthat building from which the tenant was evicted to any otherperson except the tenant who had been evicted by virtue of theorder passed under Section 13-B. In contravention of theserestrictions, the landlord is liable for a penal action and can beimposed punishment of imprisonment for a term which mayCextend to six months or with fine which may extend to Rupeesone thousand or with both.”

40. Rent control legislation are quintessentially social legislationthat were enacted in the 1940’s and 1950’s to protect and curbexploitation of tenants in view of the prevailing socio-economicDconditions due to large scale immigration to towns and cities, increasein population, lack of housing facilities as landed property was ownedby a few well-off and wealthy persons. The rent control legislation,therefore, interfered with the general freedom of contract and right ofthe landlord to seek eviction under the Transfer of Property Act.However, all such legislations invariably also provide for balancing theEconflicting rights of the landlords. In several decisions, this Court hasemphasised that there is a need for balancing the two rival interests ashas been observed in Malpe Vishwanath Acharya and Others v. Stateof Maharashtra and Another[19], Joginder Pal v. Naval KishoreBehal[20], Satyawati Sharma (Dead) By LRs v. Union of India andFAnother[21]and in the recent decision in Vinod Kumar v. Ashok KumarGandhi in Civil Appeal No. 3793 of 2016 decided on 05.08.2019.

41. In Kewal Singh (supra) this Court had rejected the challengeof discrimination and arbitrariness predicated on Article 14 to thesummary procedure under Section 25-B of the Delhi Rent Control Act,G1958 applicable in cases of personal necessity of landlords. Thecontention that Section 25-B creates a special class of landlords whoare given favourable treatment for speedy eviction of tenants was 19 (1998) 2 SCC 1

rejected as without any substance. The rent control legislation shouldbe just and fair to the landlords. Accordingly, it was observed that it isalways open to the legislature to check, regulate and also confer rightsupon the landlords to enable them to seek eviction in certaincircumstances. Referring to the ground of personal necessity, it wasobserved:

“17. [...] Thus, such a landlord becomes a class by himself. Thestatute thus puts personal necessity of the landlord as a specialclass requiring special treatment for quick eviction of the tenantand cuts out all delays and plugs all the loopholes which maycause delay in getting the relief by the landlord. It is obvious,therefore, that the classification made by the legislature is in publicinterest and is in complete consonance with the objectives soughtto be achieved. The landlords having personal necessity havebeen brought together as a separate class because of their specialneeds and such a classification cannot be said to be unreasonableparticularly when the legislature in its wisdom feels that thelandlords should get this relief as quickly as possible.”

42. The following observations in Ravi Dutt Sharma (supra)relating to the right given to the landlords for eviction in context of therent control legislation are pertinent:

“7. […] Tenants cannot complain of any discrimination becausethe Rent Act merely gave certain protection to them in publicinterest and if the protection or a part of it afforded by the RentAct was withdrawn and the common law right of the tenantunder the Transfer of Property Act was still preserved, no genuinegrievance could be made.”

Similar views were also expressed in Kewal Singh (supra) inthe following words:

“22. Thus, we do not see how can the tenant challenge thevalidity of such a provision enacted by the legislature from whichthe tenant itself derived such rights.

23. In the instant case, the legislature has not taken away theright of the tenant at all but has merely simplified the procedurefor eviction of the tenant in cases falling within the ambit ofSections 14-A and 14(1)(e) of the Act as discussed in thejudgment. In these circumstances, therefore, any challenge by A

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Athe tenant to the constitutionality of the Act must necessarily failand hence Section 25-B is constitutionally valid.”

43. Section 13-B of the Rent Act cannot be held to beunconstitutional because it grants a right to claim eviction for bona fideneed by summary procedure to a certain group of landlords, that is,BNon-Resident Indians subject to and on the satisfaction of statutoryconditions which incorporate a check on frivolous evictions. The pleathat Section 13-B ought to be struck down on the ground that similarrights can be extended to other landlords is without substance and shouldbe rejected. It rests with the legislature to make laws and extend it toother similarly situated persons. The rent act(s) invariably give similarCrights by a controlled mechanism and alluded riders to various otherclasses/groups of landlords, namely, government servants, members ofarmed forces, the retired or soon to retire employees of the Centraland the State Governments, widows, etc.

44. The right of Non-Resident Indians to initiate eviction underDthe summary procedure provided in Section 18-A of the Rent Act isnot an unfettered and absolute right. It is subject to satisfaction ofvarious pre-requisites and imperatives that ensure and check potentialabuse by resorting to a short-circuit procedure. The requirement shouldarise from a genuine need of the Non-Resident Indian landlord or hisEdependent. Such landlord should be an owner for five years precedingthe date of filing of the eviction petition. There is a cap on permittingthe use of the provision which is available only once in a lifetime andonly in respect of one building. There are restrictions and constraintson the re-sale and re-letting and a further requirement to possess theproperty for a continuous period of three months after the possessionFis taken. These pre-conditions and post possession restrictions suggestthat Section 13-B serves a specific policy objective to ensure the rightof Non-Resident Indians to occupy their property in the Union Territoryof Chandigarh and the State of Punjab as the case may be, after“returning” to their country. This right has to be balanced with the rightGof the tenants to establish their case on merits by disproving the genuinerequirement of the Non-Resident Indians.

45. Section 13-B cannot, therefore, be treated as an arbitraryclassification that infringes and violates Article 14 of the Constitution.The challenge predicated on the basis of unconstitutionality of theHclassification is rejected.

46. Before reserving the judgment, we had heard counsel for theappellants on merits and had expressed that we were not inclined tointerfere with the factual findings. Accordingly, we have not dealt withthe factual matrix in each case and have examined and answered thelegal issues raised. In view of the findings upholding the constitutionalvalidity of Section 13-B of the Rent Act and its extension andapplicability to the Union Territory of Chandigarh, we would dismissthe afore-captioned appeals by the tenants. There would be no orderas to costs.

Nidhi Jain

Appeals dismissed.

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