Lalji alias Bhola vs Satpal Khanna

Gurdev Singh, J.—The East Punjab Urban, Rent Restriction Act (3 of 1919) (hereinafter referred to as the Act) came into force on its publication in the East Punjab Gazette on the 25th of March, 1949, subsection (2) of section 1 whereof provided:--

It extends to all urban areas in East Punjab, but nothing herein contained shall be deemed to affect the regulation of house accommodation in any cantonment area.

Relying upon the later part of this provision argument was raised in Rajeshwar Prashad v. Bansilal (1960) 62 P.L.R. 143, that this Act did not apply to cantonment areas. This contention was, however, repelled by the learned Judges of a division Bench accepting the view of the Bombay High Court in A.C. Patel Vs. Vishwanath Chada, , wherein it was held that regulation of house accommodation in any cantonment area came within the legislative competence of a State legislature under List II entry 18. Subsequently, however, a similar question came up for consideration before their Lordships of the Supreme Court in Indu Bhushan Bose v. Rama Sundari Debt and another 1969 (1) S.C.A. 671, and it was held that the expression "regulation of house accommodation in any cantonment area" came within entry 3 of the Union List I of the Seventh Schedule of the Constitution and thus the Parliament had exclusive power to make laws with regard to these matters, notwithstanding the fact that similar power may also be found in any Entry in List II or List III. In dealing with this matter Bhargava, J, delivering the judgment of the Court, observed as follows :

Article 246 of the Constitution confers exclusive power on Parliament to make laws with respect to any of the matters enumerated in List I, notwithstanding the concurrent power of Parliament and the State Legislature or the exclusive power of the State Legislature in Lists III and II respectively. The general power of legislating in respect of relationship between landlord and tenant exercisable by a State Legislature either under Entry 18 of List It of entries 6 and 7 of List III is subject to the overriding power of Parliament in respect of matters in List I, so that the effect of Entry 3 of List I is that, on the "subject of relationship between landlord and tenant in so far as it arises in respect of house accommodation situated in cantonment areas. Parliament alone can legislate and not the State Legislatures.......

In this view, we are unable to affirm the decision of the Bombay High Court in A.C. Patel''s case (supra) which is based on the interpretation that entry 2 in List I of the Seventh Schedule to the Government of India Act only permitted laws to be made for requisitioning of property, acquiring of property and allocation, of property only.

It was further ruled that the power to regulate the house accommodation by law must extend to all house accommodation in the cantonment area irrespective of its being owned by, or in the possession of, civilians, and the Entry 3 in List I of the Seventh Schedule gives power to the Central Government to pass legislation for the purpose of directing or controlling all house accommodation and cantonment areas and this power to direct or control included within it all aspects as to who is to make the constructions, under what conditions the constructions can be altered, who is to occupy the accommodation and for how long, on what terms it is to be occupied, when and under what circumstances the occupant is to cease to occupy it, and the manner in which the accommodation is to be utilised. It was emphasised that whenever any legislation is passed relating to control of rents, that legislation can be effective and can serve its purpose only if it also regulates eviction of tenants, and in this view of the matter such powar must necessarily be read in the expression "regulation of house accommodation."

In view of this authoritative pronouncement by their Lordships of the Supreme Court, it was held by Mehar Singh, C.J. in Narinder Nath v. Babu Ram 1969 R.C.J. 1032, that the earlier decision of this Court in Rajeshwar Prashad''s case, stood overruled, and the Act did not apply to any cantonment area.

As the matter then stood, it was obvious that under the Act no action under any State Rent Control legislation could be taken in respect of any premises situated within the cantonment areas. The Government of India, however, stepped into remedy the situation by issuing Ministry of Defence Notification No. S.R.O. 7, dated 21st November, 1969, extending the provisions of the Act to cantonment areas in the States of Punjab and Haryana, in exercise of its power u/s 3 of the Cantonments (Extension of Rant Control Laws) Act. 1957. Thereupon the tenants and landlords in the cantonment areas found themselves free to invoke the provisions of the East Punjab urban Rent Restriction Act, 1949. One of such cases related to fixation a standard rent of shop situated in Kalibari Sadar Bazar in the area of Ambala Cantonment, giving rise in Civil Revision 336 of 1971, Amrit Lal Bhatta v. Smt. Vidya Kumari, against the order of the Appellate Authority appointed under Act. When it came up before R.S. Narula J, the very jurisdiction of the Appellate Authority and Rent Controller to take any proceedings with regard to the premises situate in the cantonment area was challenged in these words;

That section 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957 (46 of 1957) under which Ministry of Defence Notification No. S.R.O. 7 dated 21st November, 1969, has been issued extending the provisions of East Punjab Act No. 3 of 1949 to the Cantonments in the States of Haryana and Punjab is ultra vires the provisions of Articles 246 of the Constitution of India read with entry No. 3 in the Union List as given in Seventh Schedule of the Constitution of India and that being so the impugned order of ejectment passed by the Appellate Authority is null and void and without jurisdiction.

In view of the importance of the question raised, his Lordship directed that the petition for revision be heard by a Division Bench The same objection to the jurisdiction of the Rent Control authorities having been taken in Civil Revision 387, 388, 578, 770 and 771 of 1971, which as well relate to the premises situate in Ambala Cantonment, they have also been placed before us to deal with the question of law that has thus arisen.

In view of the pronouncement of their Lordships of the Supreme Court in Indu Bhushan Base''s case that the Parliament has the exclusive authority under Entry 3 List 1 to legislate on control of rents and regarding eviction of tenants in respect of cantonment areas, it cannot be disputed that the Parliament can make law of the type of the East Punjab Urban Rent Restriction Act, 1949, in respect of cantonment areas. Instead of enacting such a legislation it has however, sought to achieve its purpose, inter alia, of controlling rents and evictions in respect of cantonment areas by issuing the impugned notification dated 21st November, 1969, in exercise of its powers u/s 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957 which section reads thus:

The Central Government may by notification in the Official Gazette, extend to any cantonment with such restrictions and modifications as it thinks fit, any enactment relating to the control rent and regulation of house accommodation which is in force on the date of the notification in the State in which the cantonment is situated.

Provided that nothing contained in any enactment so extended shall apply to--

(a) any premises within the cantonment belonging to Government;

(b) any tenancy or other like relationship created by a grant from the Government in respect of premises within the cantonment taken on lease or requisitioned by the Government; or

(c) any house within the cantonment which is, or may be, appropriated by the Central Government on lease under the Cantonments, (House Accommodation) Act, 1923 (6 of 1923).

This notification extending the East Punjab Urban Rent Restriction Act, 1949, to cantonment areas in the States of Haryana and Punjab was assailed before the learned Single Judge solely on the plea that section 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957, under which it was issued, was ultra tires the provisions of Articles 246 read with Entry 3 is List 1 of Seventh Schedule of the Constitution.

The challenge to the vires of section 3 of Act NO 46 of 1957 is based upon the dictum of their Lordships of the Supreme Court in Indu Bhusan Bose''s case that Parliament has the exclusive authority under Entry 3 in List I of the Seventh Schedule read with Art. 246 of the Constitution to legislate on control of rent, including provision for eviction of tenants so fur as cantonment areas are concerned. It is argued that by conferring authority on the Central Government u/s 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957, to extend any enactment relating to control of rent and regulating house accommodation which is in force in the State in which the cantonment area is situated, the Parliament had virtually abdicated its function under Entry 3 in List I of the Seventh Schedule in favour of the State Legislature which it could not do in view of Article 246 of the Constitution, the matter being within its exclusive jurisdiction. On careful and earnest consideration we, however, rind that this is not the correct interpretation of the relevant provision. The Parliament has nowhere authorised any State Legislature to legislate for any cantonment area. As cantonment areas are scattered all over India with varying local conditions, instead of making a legislation to cover those areas what the Parliament has, by enacting Act No. 46 of 1957, however, done is to empower the Central Government to extend to any cantonment area with such restrictions and modifications as it thinks fit, any enactment relating to the control of rent and regulation of house accommodation which is in force in the State in which the cantonment area is situate, subject to certain exceptions. This is the path and substance of section 3 of this Act.

The argument raised on behalf of the petitioners before us in challenging the vires of this provision is not that under Article 246 and Entry 3 in List 1 of the Seventh Schedule of the Constitution the Parliament has no power to make laws with regard to eviction of tenants and control of rent relating to premises situate in cantonment areas, but that it could not delegate its function of making such laws to the State Governments by authorising the Central Government to extend a State Legislation on the subject to a particular cantonment as it is tantamount to abdication of its own legislative functions. As observed earlier, there is no delegation of authority to any State Legislature. Thus, the real questions that need consideration are :--

Whether the Parliament could delegate its function to the Central Government to apply a State Act which is already in force in that State to an area on a subject on which Parliament alone is competent to legislate ?

Whether the delegation contained in section 3 of the Central Act No. 46 of 1957 is excessive ?

The leading Indian decision on the subject of delegated legislation is in Delhi Laws Act 1912, etc. AIR 1951 S.C. 332 Fazl Ali J., after considering the various decisions of different courts, summed up his conclusions in these words :

(1) The legislature must normally discharge its primary legislative function itself and not through hers. (2) once it is established that it has sovereign powers within a certain sphere, it must follow as a corollary that it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law, and that it may utilize any outside agency to any extent if finds necessary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside agency, it must see that such agency acts as a subordinate authority and does not become a parallel legislature. (4) The doctrine of separation of powers and the judicial interpretation it has received in America ever since the American Constitution was framed, enables the American Courts to check undue and successive delegation but the Courts of this country are not committed to that doctrine and cannot apply it in the same way as it has been applied in America. Therefore, there are only two main checks in this country on the power of the legislature to delegate, these being its good sense and the principle that it should not cross the line beyond which delegation amounts to ''abdication and self-effacement''

While concluding his opinion the learned Judge dealing with the necessity of delegated legislation observed as follows:

Before I conclude. I wish to make a few general observations here on the subject of "delegated legislation" and its limits, using the expression once again in the popular sense. This form of legislation has become a present-day necessity, and it has come to stay it is both inevitable and indispensable. The legislature has now to make so many laws that it has no time to devote to all the legislative details, and some times the subject on which it has to legislate is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject Again, when complex schemes of reform are to be the subject of legislation, it is difficult to bring out a self contained and complete Act straightaway, since it is not possible to foresee all the contingencies and envisage all the local requirements for which provision is to be made Thus, some degree of flexibility becomes necessary, so as to permit constant adaptation to unknown future conditions without the necessity of having to amend the law again and again. The advantage of such a course is that it enables the delegate authority to consult interests likely to be affected by a particular law, make actual experiments when necessary, and utilize the results of its "investigations and experiments in the best way possible. There may also arise emergencies and urgent situations requiring prompt action and the entrustment of large powers to authorities who have to deal with the various situations as they arise"

Kanta, C.J., who did not share the majority opinion, however, also recognised the necessity of delegation, observing as follows :

A fair and close reading and analysis of all these decisions of the Privy Council, the judgments of the Supreme Courts of Canada and Australia without stretching and straining the words and expressions used therein lead me to the conclusions that while a legislature, as a part of its legislative functions, can confer powers to make rules and regulations for carrying the enactment into operation and effect, and while a legislature has power to lay down the policy and principles providing the rule of conduct and while it may further provide that on certain data or facts being found and ascertained by an executive authority, the operation of the Act can be extended to certain areas or may be brought into force ON such determination which is described as conditional legislation the power to delegate legislative functions generally is not warranted under the Constitution of India at any stage.

Patanjali Sastri, J. held that the Indian Legislature was competed to make laws delegating Legislative powers, both quantitatively and qualitatively, as it is for the British Parliament to do so provided it acts within the circumscribed limits. His Lordship then painted out the distinction between delegation of legislative authority and the creation of a new, legislative power. In the former, the delegating body does not efface itself but retains its legislative power intact and merely elects to exercise such power through an agency or instrumentality of its choice. In the letter, there is no delegation of power to subordinate units but a grant of power to an independent and co-ordinate body to make laws operative of there own force. For the first no express provision authorising delegation is required. In the absence of a constitutional inhibitation, delegat on of legislative power, however extensive, could be made so long as the delegating body retains its own legislative power intact. For the second, however, a positive enabling provision in the constitutional document is required.

It is thus evident that delegated legislation is recognised on all hands The difference, however, is with regard to the extent of delegation Kanta, C.J. characterised as unsound the contention that legislative power carries with it a general power to delegate legislative functions, so that the legislature may not define its policy at all and may Jay down no rule of conduct but that whole thing may be left either to the executive authority or administrative or other body. Fazl Ali, J. speaking for the majority, while agreeing that the Legislature cannot abdicate its legislative functions, held that while entrusting power to an outside agency, it most see that such agency acts as a subordinate authority and does not become a parallel Legislature At the Same time his Lordship observed that the Legislature is free to utilise any outside agency to any extent it finds necessary for doing things which it is unable to do itself or finds itself inconvenient to do.

Mukherjea, J. dealing with the extent of delegation said:

The legislature cannot part with its essential legislative: function which consists in declaring its policy and making it a binding rule of conduct A surrender of this essential function would amount to abdication of legislative powers in the eye of law. The policy may be particularised in as few or as many wards as the legislature thinks proper and it is enough if an intelligent guidance is given to the subordinate authority. The Court can interfere if no policy is discernible at all or the delegation is Of such an indefinite-character as to amount to abdication, but as the discretion vests with the legislature in determining whether there is necessity for delegation or not, the exercise of such discretion is not to be disturbed by the Court except in clear cases of abuse. These I consider to be the fundamental principles and in respect to the powers of the legislature the constitutional position in India approximates more to the American than to the English/pattern.

By majority their Lordships of the Supreme Court upheld the validity of section 7 of the Delhi Laws Act, 1912, and section 2 of Ajmer-Merwara (Extension of Laws) Act, 1947. The latter provision was to this effect :

The Central Government may, by notification in the official Gazette, extend to the Province of Ajmer-Merwara with such restrictions and modifications as it thinks fit any enactment which is in force in any other Province at the date of such notification.

The question of delegation again came up before their Lordships of the Supreme Court in Rajnarain Singh Vs. The Chairman, Patna Administration Committee, Patna and Another, Dealing with the extent of delegation it was ruled that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. While recognising that exactly what constitutes an essential feature cannot be enunciated in general terms, it was observed that certainly it did not include a change of policy.

In B. Shama Rao Vs. The Union Territory of Pondicherry, the Pondicherry General Sales Tax Act (10 of 1965), which extended the Madras General Sales Tax Act (1 of 1959), as it stood immediately before the date on which the Pondicherry Act would be brought into force in the territory of Pondicherry by a notification issued by the Government. Their Lordships held it void and still-born because the Pondicherry Legislature in enacting the Act in that manner had totally abdicated its legislative functions in the matter of sales tax legislation and surrendered it in favour of the Madras Legislature. In dealing with this matter, Shelat, J. observed as follows:--

In the present case it is clear that the Pondicherry legislature not only adopted the Madras Act as it stood at the date when it passed the Principal Act but also enacted that if the Madras legislature were to amend its Act prior to the date when the Pondicherry Government would issue its notification it would be the amended Act which would apply. The legislature at that stage could not anticipate that the Madras Act would not be amended nor could it predicate amendment or amendments would be carried out or whether they would be of a sweeping character or whether they would be suitable in Pondicherry. There was in these circumstances a total surrender in the matter of sales tax legislation by the Pondicherry Assembly in favour of the Madras legislature and for that reason we must agree with Mr. Desai that the Act was void or as is often said still-born.

The situation in the cases before us is however, entirely different. Here the power given to the Central Government relates to the extension to the cantonment areas of a State legislation which is already on the statute book. Thus there is no question of surrender of its legislative power to the State legislature. The authority given to the Central Government the necessity of re-enacting an existing piece of legislation which the Central Government may itself consider it desirable to apply to the cantonment area situate within the State to which that particular State Act applies. It is true that under this provision the Central Government, while extending any State Act to a cantonment area, is authorised to do so with such restrictions and modifications as it thinks fit but that again does rot in ply abdication of the functions by the Legislature because only such modifications can be made as are necessary for making it applicable to the cantonment areas and to achieve the purpose for which it is intended. Such powers of making modifications and restrictions have been upheld in the various cases to which reference has already been made. All that is emphasised by the learned Judges is that the delegation should not amount to abdication and self-effacement. As has been observed in Harishankar Bagla and Another Vs. The State of Madhya Pradesh, the essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. Hence the Legislature cannot delegate its function of laying down the legislative policy or any function the exercise of which involves a change in such policy. When the Legislature delegates the authority to apply a certain type of legislation to a certain area the the policy is apparent in the provisions so made. This is particularly so in the case before us. The impugned provision, section 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957 specifically provides that the legislation which the Central Government is authorised to extend is that which has already been enacted by the Legislature of the State in which the particular cantonment area is situate and relates to control of rent and regulation of house accommodation. This clearly implies that the object is to extend the benefit of an existing legislation to the cantonment area within that Slate.

The policy of the Legislature in enacting the Cantonments (Extension of Rent Control Laws) Act, 1957, is further clear from its other provisions as well as the statement of its Objects and Reasons. On reference to its Objects and Reasons we find that after pointing out that under Article 246 of the Constitution read with Entry 3 in the Union List power to make laws with respect to rent control in cantonment areas belongs exclusively to the Parliament which was not the case before the coming into force of the Constitution, it is stated :

A large number of eviction cases has beed tiled by the landlords by taking advantage of the non-existence of any rent control law in the cantonment area.

To protect the tenants from improper evictions, Central legislation is, therefore, necessary to provide for the application of the State Act of 1955 to Mhow with necessary modifications.

As a situation similar to that in Mhow Cantonment may arise in other cantonments also, it is proposed to confer power on the Central Government to extent the relevant rent control laws of any State to the cantonments situated in that State by notification in the Gazette of India.

It is thus abundantly clear that the authority delegated to the Central Government u/s 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957, is very much restricted. It does not at all amount to abdication of any legislative functions and clearly lays down the policy which is to guide the Central Government in extending a State legislation relating to control of rent and regulation of houses accommodation to various cantonments. Even the notification issued in exercise of this power extending the East Punjab Urban Rent Restriction Act, 949 to the cantonment areas in the States of Haryana and Punjab is fully in consonance with the policy that prompted the Parliament to enact the Cantonments (Extension of Rent Control Laws) Act, 1957. Thus the challenge to the constitutional validity of section 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957, fails. We thus find that the East Punjab Urban Rent Restriction Act, 1949, stands validly extended to the cantonment areas in the States of Haryana and Punjab, and the Rent Controller as well as the Appellate Authority appointed under the Act acted within their jurisdiction in applying the provisions of this Act to such areas.

Having answered the legal question that necessitated the reference to the Division Bench, we direct that all there cases be placed before the learned Single Judge for their disposal on merits.