Ram Krishan Grover and Others vs Union of India and Others

s. 13-B – Amendments made vide the Amendment Act with regard to the rights of Non-Resident Indians by the State Legislature of Punjab – Legislative competence of the State – Held: Amendment Act enacted by the State legislature was well within its competence – Amendment Act on its true construction and by reference to the doctrine of “pith and substance” is relatable to the relationship of landlord and tenant for housing and accommodation and falls under the Concurrent List – Dominant intention or “pith and substance” of the legislation is to regulate the relationship between Non-Resident Indian landlords and tenants for housing and accommodation – Merely because the Amendment Act to achieve its object touches upon the subject matter in respect of Non-Resident Indian landlords in the Rent Act, does not make the Amendment or the Rent Act ultra vires the Constitution – In the context of the Union Territory of Chandigarh and as the subject matter falls within the Concurrent List, it would be immaterial to decide on the competence of the legislating body – Power to make laws in respect of a Union Territory vests with the Parliament under Art.246(4) – In terms of s. 87 of the Re-organisation Act, the power to extend laws to the Union Territory of Chandigarh vests with the Central Government, that is the Parliament or the Central Executive, as the case may be, and is permissible – Constitution of 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 NRI landlords, however, does not afford any legal remedy to the tenants – Reasonability of – Held: By providing for a simplified procedure of eviction by the Non-Resident Indians, s. 13-B does not dilute the rights of tenants – It gives a chance to the tenants on merits to establish their case and when justified and necessary to take the matter to trial – Thus, s. 13-B cannot be held to be arbitrary and unreasonable.

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

s. 13-B – Restrictions and conditions imposed on landlord seeking eviction under – Purpose of – Held: In terms of Section 13-B, the condition imposed upon the landlord is that he should have been the owner of the premises for five years before the eviction petition is filed – Such landlord/owner is permitted to file an eviction petition only once during the lifetime and in respect of one building – Landlord cannot sell or give the premises on lease for a period of five years from the date of taking possession from the tenant – On breach of the same, the tenant has a right to seek restoration of possession – In case the landlord does not occupy the premises for a continuous period of three months after getting an eviction order or lets out the whole or any part of the premises to a third person other than the tenant in contravention of the provisions of s. 13 B(3), punishment is imposed-– Thus, these restrictions and conditions are strong in-built checks to ensure that the need of the landlord should be genuine and bona fide and the tenant should not be subjected to frivolous and dubious eviction order by relying on false assertions.

s.18-A and s.13-B – Right of Non-Resident Indians to initiate eviction under the summary procedure – Nature of – Held: Is not an unfettered and absolute right – It is subject to satisfaction of various pre-requisites and imperatives that ensure and check potential abuse by resorting to a short-circuit procedure – Requirement should arise from a genuine need of the Non-Resident Indian landlord or his dependent – Furthermore, these pre-conditions and post possession restrictions stated therein suggest that s. 13-B serves a specific policy objective to ensure the right of Non-Resident Indians to occupy their property in the Union Territory of Chandigarh and the State of Punjab as the case may be, after “returning” to their country – This right has to be balanced with the right of the tenants to establish their case on merits by disproving the genuine requirement of the Non-Resident Indians – Constitution of India – Art. 14.

Doctrines/Principles: Doctrine of Pith and substance – Meaning of – Held: Pith and substance doctrine states that if the legislation is covered by an entry, that is, it is within the permitted jurisdiction of the legislature, any incidental encroachment in the rival field has to be disregarded – Only when wide construction of an entry leads to heads-on-clash with another entry in the same or different List, the principle of harmonious construction is applied to reconcile the conflict and to give effect to each of them. Constitution of India: Art. 254 – Repugnancy – When attracted – Held: Repugnancy arises between a Central and a State Act when there is a direct and irreconcilable conflict between the two enactments and in that case, the Central Legislation prevails by virtue of Art. 254 – Such repugnancy or inconsistency is not to be readily inferred as the entries in the three Lists permit incidental encroachment – Thus, every attempt must be made to placate the conflict and only when and in case of oppugnant clash, the court should proceed to strike down the legislation as trespassing beyond its legitimate and legal confines.

Legislature: Function of – Held: Primary function of the legislature is to make laws for all or different groups or classes of persons – Lawmakers as elected representatives are in a better position to know the needs, requirements and expectations of citizens – Thus, the legislature possesses the power to distinguish and classify persons or things subjected to such laws – Such a classification, however, must pass the muster of Art. 14 which proscribe hostile and invidious discrimination – Art. 14 does not entirely prohibit classification by grouping certain persons with special peculiarities in a special category to meet certain specific ends.

Legislation: Rent control legislation – Object of – Stated. Dismissing the appeals, the Court

HELD: 1. The constitutional validity of Section 13-B of the Rent Act and its extension and applicability to the Union Territory of Chandigarh is upheld. [Para 46] [45-B] Whether Notification dated 09.10.2009 issued under Section 87 of the Punjab Reorganisation Act, 1966 extending Section 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 Union Territory of Chandigarh falls within the ambit of conditional delegation and is valid and permissible. [Para 18] [26-A]

2.2 It cannot be accepted that the Notification dated 09.10.2009 which extends the Amendment Act to Chandigarh by an executive action in exercise of powers under Section 87 of the Re-organisation Act amounts to and suffers from the vice of excessive delegation as it amends the rent legislation in force in Chandigarh, that is, the Extension Act were enacted by the Parliament in exercise of powers under Article 246(4) of the Constitution. Once a policy of extension of laws has been laid down by the Parliament and is clear and permissible, it would only seem as an inevitable fallout that the executive should be permitted to extend future amendments to the existing laws. Therefore, the challenge predicated on the doctrine of excessive delegation, separation of powers, doctrine of the law of agency, fails and must be rejected. Such challenge must also be rejected in view of the large number of eviction suits filed by NonResident Indian landlords on the strength of Notification dated 09.10.2009 who would be left remediless if contentions to the contrary are accepted. [Paras 15, 19] [20-A-B; 26-B-C]

Ramesh Birch v. Union of India (1989 Supp) 1 SCC

430 : [1989] 2 SCR 629 – relied on.

Re Delhi Laws Act 1912, Ajmer Merwara (Extension of Laws) Act, 1947 and Part C States (Laws) Act, 1950 AIR 1951 SC 332 : [1951] SCR 747 ; R v Burah

(1878) 5 Ind App 178 (PC) ; Vasu Dev Singh v. Union of India (2006) 12 SCC 753 : [2006] 8 Suppl. SCR

535 – referred to.

Whether amendments made vide the Amendment Act with regard to the rights of Non-Resident Indians by the State Legislature of Punjab were beyond its competence?

3.1 The entries in the three Lists: List I – Entry 17 & 18, List II – Entry 18, List III Entry 6, 7 & 13 are not mutually exclusive. Further, the entries are fields of legislation that demarcate the area and heads of legislation. Thus, they should receive the widest construction unless their rigour and import need to be castrated by competing entries and other parts of the Constitution. Interpretation of each entry has to be fair and liberal so as to cover all incidental and subsidiary matters which can reasonably be said to have been comprehended in it. The entries should not be interpreted in a narrow and pedantic sense. “Pith and substance” doctrine states that if the legislation is covered by an entry, that is, within the permitted jurisdiction of the legislature, any incidental encroachment in the rival field has to be disregarded. Only when wide construction of an entry leads to heads-on-clash with another entry in the same or different List, the principle of harmonious construction applies to reconcile the conflict and to give effect to each of them. [Para 22] [27-D-F]

3.2 Repugnancy arises between a Central and a State Act when there is a direct and irreconcilable conflict between the two enactments. It is when there is an irreconcilable conflict between the two legislations that the Central Legislation prevails by virtue of Article 254 of the Constitution. Such repugnancy or inconsistency is not to be readily inferred as the entries in the three Lists permit incidental encroachment. Consequently, every attempt must be made to placate the conflict and only when and in case of oppugnant clash, the Court should proceed to strike down the legislation as trespassing beyond its legitimate and legal confines. [Para 23] [27-F-H] Vijay Kumar Sharma and Others v. State of Karnataka and Others (1990) 2 SCC 562 : [1990] 1 SCR 614 ; Indu Bhushan Bose v. Rama Sundari Debi and

Another (1969) 2 SCC 289 : [1970] 1 SCR 443 ; Jaisingh Jairam Tyagi and Others v. Mamanchand Ratilal 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 ; Accountant and Secretarial Services Pvt. Ltd. and Another v. Union of India and Others (1988) 4 SCC 324 : [1988] 1 Suppl. SCR 493 – referred to.

3.3 The Amendment Act on its true construction and by reference to the doctrine of “pith and substance” is relatable to the relationship of landlord and tenant for housing and accommodation and falls under the Concurrent List. The dominant intention or “pith and substance” of the legislation is to regulate the relationship between Non-Resident Indian landlords and tenants for housing and accommodation. Merely because the Amendment Act to achieve its object touches upon the subject matter in respect of Non-Resident Indian landlords in the Rent Act, does not make the Amendment or the Rent Act ultra vires the Constitution. The Rent Act as amended by the Amendment Act and the Central legislations relating to citizenship, regulation of the right of non-residents to own and acquire immovable property, cover different subject matters and serve different objects and there is no repugnancy between the Rent Act and any Central enactment like Citizenship Act, Foreign Exchange Regulation Act, etc. The view that the legislative lists under the Seventh Schedule envisage and mandate separate legislation by the Central Government for NonResident Indian landlords cannot be accepted. [Para 27] [29-GH; 30-A-B]

3.4 The Amendment Act enacted by the State legislature was well within its competence. In the context of the Union Territory of Chandigarh and as the subject matter falls within the Concurrent List, it would be immaterial to decide on the competence of the legislating body. The power to make laws in respect of a Union Territory vests with the Parliament under Article 246(4). In terms of Section 87 of the Reorganisation Act, the power to extend laws to the Union Territory of Chandigarh vests with the Central Government, that is the Parliament or the 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 and unreasonable inasmuch as it does not afford any legal remedy to the tenants?

4.1 Section 19 (2-B) incorporates statutory safeguards to check and penalise deceitful and two-faced landlords and gives the right of restitution to the defrauded tenant. Section 18-A of the Rent Act prescribes a summary procedure for recovery of possession applicable to eviction petitions filed by Non-Resident Indian landlords under Section 13-B of the Rent Act. Section 18A of the Rent Act requires the Controller to take up the matter on a day-to-day basis until the hearing on an application for leave to defend is concluded. No litigant can possibly object to a provision stipulating day-to-day hearing which ensures speedy, expeditious and effective decisions. Section 18-A also states that the decision of the Controller is final as no appeal or second appeal lies against the order of eviction except that the High Court could, to satisfy itself of the correctness of the decision, examine the matter by calling for the records of the case. [Paras 29, 30, 33] [30-H; 31-A; 33-E-F]

Ravi Dutt Sharma v. Ratan Lal Bhargava (1984) 2 SCC

75 : [1984] 2 SCR 614 ; Kewal Singh v. Smt. Lajwanti (1980) 1 SCC 290 : [1980] 1 SCR 854 – referred to.

4.2 In terms of Section 13-B of the Rent Act, the landlord should have been the owner of the premises for five years before the eviction petition is filed. Such landlord/owner is permitted to file an eviction petition 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 on sale or lease of the premises for a period of five years from the date of taking possession from the tenant. On breach of the conditions/ restrictions mentioned in sub-section (3) to Section 13-B, the tenant has a right to seek restoration of possession. Sub-section (2-B) to Section 19 imposes a maximum punishment of six months imprisonment or a fine of one thousand rupees or both in case the landlord does not occupy the premises for a continuous period of three months after getting an eviction order or lets out the whole or any part of the premises to a third person other than the tenant in contravention of the provisions of sub-section (3) to Section 13B. These restrictions and conditions are strong in-built checks to ensure that the need of the landlord should be genuine and bona fide and the tenant should not be subjected to frivolous and dubious eviction order by relying on false assertions. [Para 35] [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 genuine need of the landlord as pleaded in the petition should not be read as an axiom or self-evident truth, which entitles the landlord and mandates the Court to pass a decree of eviction. The requirement of a ‘strong case’ for obtaining leave to defend means a good case that brings to fore reasonable and wellgrounded basis on which the tenant seeks leave to contest the eviction proceedings. It does not mean setting up and establishing at that stage a case beyond any scintilla of doubt and debate. The grounds and pleas raised should reflect clear and strong defence and relate to the grounds mentioned in Baldev Singh Bajwa’s case. Each case has to be decided on its merits and not on the basis of any pre-conceived suppositions and presumptions. By providing for a simplified procedure of eviction by the Non-Resident Indians, Section 13-B does not dilute the rights of tenants. It gives a chance to the tenants on merits to establish their case and when justified and necessary to take the matter to trial. By no means, therefore, Section 13B can be held to be arbitrary and unreasonable. [Para 36] [36H; 37-E-G; 38-A] Baldev Singh Bajwa v. Monish Saini (2005) 12 SCC

778 : [2005] 4 Suppl. SCR 26 ; Inderjeet Kaur v. Nirpal Singh (2001) 1 SCC 706 : [2000] 5 Suppl. SCR

707 – relied on.

Swami Nath v. Nirmal Singh (2010) 9 SCC 452 : [2010]

10 SCR 1002 – referred to.

Whether classifying Non-Resident Indian landlords as a separate category renders Section 13-B invalid and ultra vires Article 14 of the Constitution ?

5.1 Legislature’s primary function is to make laws for all or different groups or classes of persons. The lawmakers as elected representatives are in a better position than any other body which is removed from local and other circumstances, to know the needs, requirements and expectations of citizens. It, therefore, seems only logical that the legislature possesses the power to distinguish and classify persons or things subjected to such laws. Such a classification, however, must pass the muster of Article 14 which proscribes hostile and invidious discrimination. Recognising that Article 14 does not entirely prohibit classification by grouping certain persons with special peculiarities in a special category to meet certain specific ends. Two conditions which must be satisfied for a classification to withstand a challenge under Article 14, the classification should be founded on intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and the differentia must have a rational relation or nexus to the object sought to be achieved by the statute in question. A classification need not be scientifically perfect or logically complete and would be justified unless it is palpably arbitrary. The test to judge the validity of any classification has to be practical and pragmatic by looking beyond the classification to the purpose of the law, that is, the purpose or object of the legislation and the circumstances which had prevailed when the law was passed and which had necessitated passing of that law. Not only this, there is a presumption as to constitutional validity of an enactment predicated on the belief that the legislature understands and correctly appreciates the need of its own people and is free to recognise degrees of harm and may confine its restriction to only those cases where the need is deemed to be the clearest. The hardship that may result from the classification cannot be the basis for determining the validity of any statute. This requires distinguishing between under-inclusiveness and over-inclusiveness. The former classification does not confer the same benefit or place the same burden on others who are similarly situated whereas over-inclusiveness includes not only those who are similarly situated with respect to the purpose but others who are not so situated as well. The latter is frowned upon but the former may pass the judicial test for the courts do exercise tolerance to under-inclusiveness unless it is clear that there is no fair reason for the law which would not require with equal force its extension to those whom it leaves untouched. [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 Rami Reddi and Others (2001) 7 SCC 708 : [2001] 2 Suppl. SCR 287 ; Pioneer Urban Land & Infrastructure Limited and Another v. Union of India and Others (2019) 8 SCC 416 – referred to.

5.2 Rent control legislation are quintessentially social legislation that were enacted in the 1940’s and 1950’s to protect and curb exploitation of tenants in view of the prevailing socioeconomic conditions due to large scale immigration to towns and cities, increase in population, lack of housing facilities as landed property was owned by a few well-off and wealthy persons. The rent control legislation, thus, interfered with the general freedom of contract and right of the landlord to seek eviction under the Transfer of Property Act. However, all such legislations invariably also provide for balancing the conflicting rights of the landlords. There is a need for balancing the two rival interests. [Para 40] [42-D-E]

Malpe Vishwanath Acharya and Others v. State of Maharashtra and Another (1998) 2 SCC 1 : [1997] 6 Suppl. SCR 717 ; Joginder Pal v. Naval Kishore Behal (2002) 5 SCC 397 : [2002] 3 SCR 1078 ; Satyawati Sharma (Dead) By LRs v. Union of India and Another (2008) 5 SCC 287 ; Vinod Kumar v. Ashok Kumar Gandhi (2019) 10 SCALE 357 ; Kewal Singh v. Smt. Lajwanti (1980) 1 SCC 290: [1980] 1 SCR 854 ; Ravi Dutt 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 be unconstitutional because it grants a right to claim eviction for bona fide need by summary procedure to a certain group of landlords, that is, Non-Resident Indians subject to and on the satisfaction of statutory conditions which incorporate a check on frivolous evictions. The plea that Section 13-B ought to be struck down on the ground that similar rights can be extended to other landlords is without substance and is rejected. It rests with the legislature to make laws and extend it to other similarly situated persons. The Rent Act(s) invariably give similar rights by a controlled mechanism and alluded riders to various other classes/groups of landlords, namely, government servants, members of armed forces, the retired or soon to retire employees of the Central and the State Governments, widows, etc. [Para 43] [44-B-C]

5.4 The right of Non-Resident Indians to initiate eviction under the summary procedure provided in Section 18-A is not an unfettered and absolute right. It is subject to satisfaction of various pre-requisites and imperatives that ensure and check potential abuse by resorting to a short-circuit procedure. The requirement should arise from a genuine need of the NonResident Indian landlord or his dependent. Such landlord should be an owner for five years preceding the date of filing of the eviction petition. There is a cap on permitting the use of the provision which is available only once in a lifetime and only in respect of one building. There are restrictions and constraints on the re-sale and re-letting and a further requirement to possess the property for a continuous period of three months after the possession is taken. These pre-conditions and post possession restrictions suggest that Section 13-B serves a specific policy objective to ensure the right of Non-Resident Indians to occupy their property in the Union Territory of Chandigarh and the State of Punjab as the case may be, after “returning” to their country. This right has to be balanced with the right of the tenants to establish their case on merits by disproving the genuine requirement of the Non-Resident Indians. [Para 44] [44-D-G]

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

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