REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8597 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 26925 OF 2011)

RAM KRISHAN GROVER AND OTHERS …..APPELLANT(S)

VERSUS

UNION OF INDIA AND OTHERS …..RESPONDENT(S)

W I T H

CIVIL APPEAL NO. 8598 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28107 OF 2011)

CIVIL APPEAL NO. 8599 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28371 OF 2011)

CIVIL APPEAL NO. 8600 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28593 OF 2011)

CIVIL APPEAL NO. 8601 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 31284 OF 2011)

CIVIL APPEAL NO. 8602 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2091 OF 2012)

CIVIL APPEAL NO. 8603 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 34304 OF 2012)

CIVIL APPEAL NO. 8604 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 17458 OF 2013)

A N D

CIVIL APPEAL NO. 8605 OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 35980 OF 2013)

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 1 of 46

J U D G M E N T

SANJIV KHANNA, J.

Leave granted.

2.The afore-captioned appeals are by tenants of different residential

and non-residential buildings in the Union Territory of Chandigarh

and urban areas in the State of Punjab, who have challenged the

constitutional validity of Section 13-B of the East Punjab Urban

Rent Restriction Act, 1949 (for short, the ‘Rent Act’) and its

extension to the Union Territory of Chandigarh by the Central

Government vide Notification dated 09.10.2009 in exercise of

powers under Section 87 of the Punjab Reorganisation Act, 1966

(for short, the ‘Reorganisation Act’).

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

“13-B. Right to recover immediate possession of

residential 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 India and the residential building

or scheduled building and/or non-residential building,

as the case may be, let out by him or her, is required

for his or her use, or for the use of any one ordinarily

living with and dependent on him or her, he or she,

may apply to the Controller for immediate possession

of such building or buildings, as the case may be:

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 2 of 46

Provided that a right to apply in respect of such a

building under this Section, shall be available only after

a period of five years from the date of becoming the

owner of such a building and shall be available only

once during the life time of such an owner.

(2) Where the owner referred to in sub-section (1), has

let out more than one residential building or scheduled

building and/or non-residential building, it shall be open

to him or her to make an application under that sub-

section in respect of only one residential 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 this Section, he or she shall not transfer it

through sale or any other means or let it out before the

expiry of a period of five years from the date of taking

possession of the said building, failing which, the

evicted tenant may apply to the Controller for an order

directing that he shall be restored the possession of the

said building and the Controller shall make an order

accordingly."

The expression ‘Non-Resident Indian’ has been defined in

clause (dd) to Section 2 of the Rent Act and reads:

“(dd) "Non-resident Indian" means a person of Indian

origin, who is either permanently or temporarily settled

outside India in either case –

(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 would indicate his intention to stay outside India

for an uncertain period;”

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 3 of 46

Section 13-B of the Rent Act gives a right to Non-Resident

Indians to recover immediate possession of residential/

scheduled/non-residential buildings situated in the Union Territory

of Chandigarh and urban areas in the State of Punjab on the

satisfaction of the conditions stated. We shall elaborate the

provisions subsequently and would first refer to the legislative

history and procedure adopted for enforcement of the challenged

provisions in the Union Territory of Chandigarh.

4. In 1956, the unified State of Punjab was created by merging the

erstwhile States of Pepsu and Punjab. In 1966, a new State of

Haryana was created and carved out of certain territories from the

State of Punjab. Certain hill areas of Punjab were merged in the

Union Territory of Himachal Pradesh. A new Union Territory of

Chandigarh was created and became the joint capital of Punjab

and Haryana. The Reorganisation Act, that is, the Punjab

Reorganisation Act, 1966 gave effect to the proposals vide

provisions relating to the delimitation of territories. Another

important aspect of the Reorganisation Act dealt with the

applicability of laws in territories that had undergone

reorganisation. This was effected by Part X of the Reorganisation

Act comprising of Sections 86 to 97. Sections 87, 88 and 89 of the

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 4 of 46

Reorganisation Act are relevant for the present decision and are

reproduced below:

“87. Power to extend enactments to Chandigarh – The

Central Government may, by notification in the Official

Gazette, extend with such restrictions or modifications as

it thinks fit, to the Union territory of Chandigarh any

enactment which is in force in a State at the date of the

notification.

88. Territorial extent of laws.—The provisions of Part II

shall not be deemed to have effected any change in the

territories to which any law in force immediately before

the appointed day extends or applies, and territorial

references in any such law to the State of Punjab shall,

until otherwise provided by a competent legislature or

other competent authority, be construed as meaning the

territories within the State immediately before the

appointed day.

89. Power to adapt laws.—For the purpose of facilitating

the application in relation to the State of Punjab or

Haryana or to the Union Territory of Himachal Pradesh or

Chandigarh of any law made before the appointed day,

the appropriate Government may, before the expiration of

two years from that day, by order, make such adaptations

and modifications of the law, whether by way of repeal or

amendment, as may be necessary or expedient, and

thereupon every such law shall have effect subject to the

adaptations and modifications so made until altered,

repealed or amended by a competent legislature or other

competent authority.”

We shall subsequently elucidate on the sections, with

specific reference to Section 87 of the Reorganisation Act.

5.Territories originally comprised in the former province of East

Punjab and later designated as the State of Punjab were

governed by the Rent Act, which applied to all “urban areas”

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 5 of 46

defined in Section 2(j) as any area administered by a municipal

committee, a cantonment board, a town committee or an area

notified by the State Government as an “urban area” for the

purposes of the Rent Act.

6.Central Government in exercise of power under Section 89 of 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 reference to the State of Punjab should be read

as a reference to the Union Territory of Chandigarh. The

expression “existing laws” was defined in para 2(1)(b) of the

Order. It is an accepted position that the Rent Act was not a part of

the “existing laws” as the area forming the Union Territory of

Chandigarh was not an “urban area” within the Rent Act.

7.The Central Government by Notification dated 13.10.1972 and

published in the Official Gazette on 04.11.1972 had declared the

area comprising of the Union Territory of Chandigarh to be an

“urban area” for the Rent Act. This Notification was struck down by

the Punjab and Haryana High Court in Harkishan Singh v. Union

of India

1

, on the short ground that no notification extending the

1 AIR 1975 Punj. & Har 160 (FB)

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 6 of 46

Rent Act to the Union Territory of Chandigarh as an “urban area”

under Section 2(j) of the Rent Act could have been issued post

reorganisation on 1.11.1966. The Rent Act was not operative in

Chandigarh in terms of Section 88 of the Reorganisation Act nor

any part would become operative by a notification under Section

87 without necessary adaptation. Thus, neither the Order nor the

Notification dated 13.10.1972 could have the effect of making the

Rent Act applicable to the Union Territory of Chandigarh.

8.The Parliament had thereupon to rectify the defect exercised its

power under Article 246(4) of the Constitution by enacting the East

Punjab Urban Rent Restriction (Extension to Chandigarh) Act,

1974 (for short, the ‘Extension Act’) to extend the Rent Act, subject

to modification specified in the Schedule, to the Union Territory of

Chandigarh. This enactment had stipulated that the Rent Act

would be deemed to be in force from 04.11.1972, that is the day

on which the earlier Notification that was quashed in Harkishan

Singh’s case (supra), was made effective. Thereby all

proceedings for eviction initiated in view of the Notification dated

04.11.1972 were regularised. The Extension Act was in principle

and substance a Parliamentary enactment to incorporate by

reference and to avoid repetition all the provisions of the Rent Act

to the Union Territory of Chandigarh.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 7 of 46

9.On 17.12.1976, when the Parliament was not in session, the

President had promulgated Ordinance 14 of 1976 by which the

Rent Act was amended by the introduction of an Explanation and

addition of 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 the form of summons to be issued under Section 13A

was added. This Ordinance was allowed to lapse and was not

enacted as law thereafter.

10.In 1982, the Parliament passed the East Punjab Rent Restriction

(Chandigarh Amendment) Act replacing the words “East Punjab”

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

were not incorporated.

11.In 1985, the provisions of the Rent Act as applicable to the State

of Punjab were amended by the Legislature of the State of Punjab

vide Punjab Act 2 of 1985 by inserting new Sections 13A, 18A and

18B, a new Second Schedule and amendments in Sections 13

and 19 substantially similar to those that had been effected by

Ordinance 14 of 1976. A new definition of “specified landlord” was

also added. These amendments came into force on 16.11.1985.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 8 of 46

12.Central Government thereafter issued Notification dated

15.12.1986 purportedly in exercise of the power under Section 87

of the Reorganisation Act extending the provisions of the Punjab

Act 2 of 1985, subject to the modifications mentioned therein, to

the Rent Act applicable to the Union Territory of Chandigarh, that

is, the Extension Act.

13.The extension whether permissible by means of a notification

issued under Section 87 of the Reorganisation Act was

challenged, but rejected by this Court in Ramesh Birch v. Union

of India

2

. We shall subsequently 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 enacted by the State Legislature of Punjab. Section 13-B

and other related sections in the Amendment Act were extended

to the Union Territory of Chandigarh by the Central Government

vide Notification dated 09.10.2009 in purported exercise of powers

under Section 87 of the Reorganisation Act.

15.To avoid prolixity, we do not propose to refer to the factual matrix

as after hearing arguments we had declined to interfere on facts

2 1989 Supp (1) SCC 430

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 9 of 46

and had heard arguments on legal issues that can be summarised

as under:

(i)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 Reorganisation

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.

(ii)The State Legislature of Punjab was incompetent to enact

the Amendment Act, for the subject matter and rights of Non-

Resident Indians fall under the field of ‘Citizenship,

Naturalization and Aliens’ under Entry 17 of List I;

‘Extradition’ under Entry 18 of List I and ‘Admission into, and

Emigration and Expulsion from India; Passports and Visas’

under Entry 19 of List I of the Seventh Schedule. The

subject matter of legislation is in direct conflict with and

repugnant to various Central enactments concerning the

rights of Non-Resident Indians including the Citizenship Act,

1955 and the Foreign Exchange Management Act, 1999,

etc.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 10 of 46

(iii)Section 13-B which gives a preferential right to claim

eviction to Non-Residents, including foreigners, is arbitrary,

unreasonable and discriminatory, and creates an artificial

classification for benefit of Non-Residents vis-à-vis Indian

Residents and thus, violates Article 14 of the Constitution.

For the sake of convenience and clarity, we shall deal with

each of the respective submissions and give our reasons

separately.

A.Whether Notification dated 09.10.2009 issued under Section

87 of the Reorganisation Act extending Section 13-B of the

Rent Act to Chandigarh by executive action is invalid?

16.In Ramesh Birch (supra), earlier Constitutional Bench judgment

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 of Kania, CJ., Fazl Ali, Patanjali Sastri, Mahajan,

Mukherjea, Das and Bose JJ. All the Judges except Kania, CJ.

and Mahajan, J. had upheld provisions of Section 7 of the Delhi

Laws Act, 1912, Section 2 of the Ajmer Merwara (Extension of

Laws) Act, 1947 and the first portion of Section 2 of Part C States

(Laws) Act. However, Bose and Mukherjea, JJ. had for reasons

3 AIR 1951 SC 332

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 11 of 46

stated by them formed the majority with Kania, CJ. and Mahajan,

J. in striking down second part of Section 2 of Part C States

(Laws) Act, 1950 by which the executive had been given the

power to make a provision in any enactment so extended for the

repeal or amendment of any corresponding law (other than a

Central Act) which was for the time being applicable to that Part C

State. This part of Section 2, it was observed, suffers from the vice

of excessive delegation and abdication of power by the

Legislature. On the touchstone of an earlier decision of the Privy

Council in R. v. Burah

4

, this Court in Ramesh Birch (supra) had

upheld constitutional validity of 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 of the Reorganisation Act and the

object and purpose sought to be achieved by Section 87 of the

Reorganisation Act. It was observed:

“23. But, these niceties apart, we think that Section 87 is

quite valid even on the “policy and guideline” theory if one

has proper regard to the context of the Act and the object

and purpose sought to be achieved by Section 87 of the

Act. The judicial decisions referred to above make it clear

that it is not necessary that the legislature should “dot all

the i's and cross all the t's” of its policy. It is sufficient if it

gives the broadest indication of a general policy of the

legislature. If we bear this in mind and have regard to the

history of this type of legislation, there will be no difficulty at

all. Section 87, like the provisions of Acts I, II and III, is a

provision necessitated by changes resulting in territories

coming under the legislative jurisdiction of the Centre.

4 (1878) 5 Ind App 178 (PC).

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 12 of 46

These are territories situated in the midst of contiguous

territories which have a proper legislature. They are small

territories falling under the legislative jurisdiction of

Parliament which has hardly sufficient time to look after the

details of all their legislative needs and requirements. To

require or expect Parliament to legislate for them will entail

a disproportionate pressure on its legislative schedule. It

will also mean the unnecessary utilisation of the time of a

large number of members of Parliament for, except the few

(less than ten) members returned to Parliament from the

Union territory, none else is likely to be interested in such

legislation. In such a situation, the most convenient course

of legislating for them is the adaptation, by extension, of

laws in force in other areas of the country. As Fazl Ali, J.

pointed out in the Delhi Laws Act case [AIR 1951 SC 332 :

1951 SCR 747] it is not a power to make laws that is

delegated but only a power to “transplant” laws already in

force after having undergone scrutiny by Parliament or one

of the State legislatures, and that too, without any material

change. There is no dispute before us — and it has been

unanimously held in all the decisions — that the power to

make modifications and restrictions in a clause of this type

is a very limited power, which permits only changes that

the different context requires and not changes in

substance. There is certainly no power of modification by

way of repeal or amendment as is available under Section

89.”

17.Ramesh Birch (supra) had held that once a policy of extension of

the Rent Act is clear and permissible, it would seem only natural

as a necessary corollary that the executive should be permitted to

extend future amendments in the Rent Act to the Union Territory of

Chandigarh. After extensively examining the different judgments

and the views expressed in Re Delhi Laws Act (supra), the

notification was upheld with the following findings:

“31. There is certainly a good deal of force in these

arguments but we think that they proceed on an incorrect

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 13 of 46

view of the effect of the notification impugned in the

present case. We might have been inclined to accept the

submissions of the learned Counsel had the effect of the

notification been to extend law which is in “actual conflict”

with any parliamentary enactment or which has the effect

of “throwing out” any existing law in the Union territory. To

borrow an expression used in an analogous context, we

would have considered the validity of the extension

doubtful had the extended provisions been repugnant to an

Act of Parliament in force in the Union territory. So long as

that is not the effect or result, we think, there is no reason

to construe the scope of Section 87 in the restricted

manner suggested by counsel. It is no doubt true that

Section 87 permits an extension because there is no law in

the Union territory in relation to a particular subject and

Parliament has not the requisite time to attend to the

matter because of its preoccupations. But this purpose

does not require for its validity that there should be no

existing law of Parliament at all on a subject. Again the

concept of “subject” for the purposes of this argument is

also an elastic one the precise scope of which cannot be

defined. The concept of vacuum is as much relevant to a

case where there is absence of a particular provision in an

existing law as to a case where there is no existing law at

all in the Union territory on a subject. For instance, if

Parliament had not enacted the 1974 Act but had only

enacted an extension of the Transfer of Property Act to

Chandigarh, could it have been said that a subsequent

notification cannot extend the provisions of the 1949 Act to

Chandigarh because the subject of leases is governed by

the Transfer of Property Act which has been already

extended and there is, therefore, no “vacuum” left which

could be filled in by such extension ? Again, suppose,

initially, a Rent Act is extended by Parliament which does

not contain a provision regarding one of the grounds on

which a landlord can seek eviction — say, one enabling

the owner to get back his house for reoccupation — and

then the Government thinks that another enactment

containing such a provision may also be extended, can it

not be plausibly said that the latter is a matter on which

there is no legislation enacted in the territory and that the

extension of the latter enactment only fills up a void or

vacancy ? Again, suppose the provisions of a general code

like, say, the Code of Civil Procedure are extended to the

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 14 of 46

Union territory, should we construe Section 87 so as to

preclude the extension of a later amendment to one of the

rules to one of the orders of the CPC merely on the ground

that it will have effect of varying or amending an existing

law? We think it would not be correct to thus unduly restrict

the scope of a provision like Section 87. The better way to

put the principle, we think, is to say that the extension of

an enactment which makes additions to the existing law

would also be permissible under Section 87 so long as it

does not, expressly or impliedly, repeal or conflict with, or

is not repugnant to, an already existing law. In this context,

reference can 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 law by a piece of delegated

legislation and to draw the line only at its attempt to repeal

the existing law, expressly or by necessary implication. In a

sense, no doubt, any addition, however small, does amend

or vary the existing law but so long as it does not really

detract from or conflict with it, there is no reason why it

should not stand alongside the existing law. In our view

Section 87 should be interpreted constructively so as to

permit its object being achieved rather than in a manner

that will detract from its efficacy or purpose. We may also

note, incidentally in legislative practice also, such

successive changes have been allowed to stand together.

Lachmi Narain v. Union of India [(1976) 2 SCC 953]

narrates how the Bengal Finance (Sales Tax) Act, 1941

extended to Delhi under Act III was subsequently amended

by Parliament Acts of 1956 and 1959 but was also sought

to be modified by various notifications from time to time.

These notifications were challenged on the ground that the

power to extend by notification could be exercised only

once and that the impugned notification did not merely

extend but also effected modifications of a substantial

nature in the Act sought to be extended. No contention

was, however, raised that after the intervention of

Parliament in 1956 and 1959 there could have been no

extension of the Bengal Act as it would have the effect of

adding to or varying the Parliamentary legislation

apparently because they could stand side by side with

each other. We, therefore, think that since the extension of

the 1985 Act only adds provisions in respect of aspects not

covered by the 1974 Act and in a manner not inconsistent

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 15 of 46

therewith, the impugned notification is quite valid and not

liable to be struck down.”

18.The distinction between conditional legislation and delegated

legislation was explained by this Court in Vasu Dev Singh v.

Union of India

5

in the following words:

“16. … The distinction between conditional legislation and

delegated legislation is clear and unambiguous. In a

conditional legislation the delegatee has to apply the law to

an area or to determine the time and manner of carrying it

into effect or at such time, as it decides or to understand

the rule of legislation, it would be a conditional legislation.

The legislature in such a case makes the law, which is

complete in all respects but the same is not brought into

operation immediately. The enforcement of the law would

depend upon the fulfilment of a condition and what is

delegated to the executive is the authority to determine by

exercising its own judgment as to whether such conditions

have been fulfilled and/or the time has come when such

legislation should be brought into force. The taking effect of

a legislation, therefore, is made dependent upon the

determination of such fact or condition by the executive

organ of the Government. Delegated legislation, however,

involves delegation of rule-making power of legislation and

authorises an executive authority to bring in force such an

area by reason thereof. The discretion conferred on the

executive by way of delegated legislation is much wider.

Such power to make rules or regulations, however, must

be exercised within the four corners of the Act. Delegated

legislation, thus, is a device which has been fashioned by

the legislature to be exercised in the manner laid down in

the legislation itself...

17. In Hamdard Dawakhana v. Union of India

6

this

Court stated:

“The distinction between conditional legislation and

delegated legislation is this that in the former the

delegate’s power is that of determining when a

5 (2006) 12 SCC 753

6 AIR 1960 SC 554

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 16 of 46

legislative declared rule of conduct shall become

effective; Hampton & Co. v. U.S. and the latter involves

delegation of rule-making power which constitutionally

may be exercised by the administrative agent. This

means that the legislature having laid down the broad

principles of its policy in the legislation can then leave

the details to be supplied by the administrative

authority. In other words by delegated legislation the

delegate completes the legislation by supplying details

within the limits prescribed by the statute and in the

case of conditional legislation the power of legislation is

exercised by the legislature conditionally leaving to the

discretion of an external authority the time and manner

of carrying its legislation into effect as also the

determination of the area to which it is to extend;””

In the present case, the extension of the Amendment Act to

the Union Territory of Chandigarh falls within the ambit of

conditional delegation and is valid and permissible.

19.In light of the aforesaid decisions and for the same reasons as

stated in Ramesh Birch (supra), we would reject the first

contention raised by the appellants. 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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 17 of 46

Non-Resident Indian landlords on the strength of Notification

dated 09.10.2009 who would be left remediless if contentions to

the contrary are accepted.

B.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?

20.The contention that the Amendment Act enacted by the State

Legislature of Punjab has overstepped the jurisdiction assigned to

it or has encroached upon a forbidden field is determinable by

finding out the true nature and character or pith and substance of

the Amendment Act which turns upon construction of the entries in

the legislative Lists under the Seventh Schedule of the

Constitution.

21.Relevant entries from the three Lists which are germane to the

determination of nature and character of the Amendment Act are:

List I

Entry 17 – Citizenship, naturalisation and aliens.

Entry 18 – Extradition.

Entry 19 – Admission into, and emigration and expulsion

from, India; passports and visas.

List II

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 18 of 46

Entry 18 – Land, that is to say, rights in or over land, land

tenures 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, contracts

of carriage, and other special forms of contracts, but not

including contracts relating to agricultural land.

Entry 13 – Civil procedure, including all matters included in

the Code of Civil Procedure at the commencement of this

Constitution, 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 and

heads of legislation. Accordingly, 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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 19 of 46

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,

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 applies to reconcile the conflict and to

give effect to each of them.

23.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.

24.In Vijay Kumar Sharma and Others v. State of Karnataka and

Others

7

, this Court referring to the “pith and substance” doctrine

7 (1990) 2 SCC 562

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 20 of 46

had held that a provision in a particular legislation in order to give

effect to its dominant purpose may incidentally encroach on the

same subject matter as covered by the provision of another

legislation. Such partial coverage of the same area in a different

context and to achieve a different purpose does not bring about

the repugnancy which is intended to be covered by Article 254(2).

Both the legislations must be substantially on the same subject

matter for repugnancy to arise and to attract Article 254. If the

subject matters covered by the legislations are different, then

merely because the two legislations refer to some allied or

cognate subjects, they do not cover the same field.

25.A Constitutional Bench judgment of this Court in Indu Bhushan

Bose v. Rama Sundari Debi and Another

8

had inter alia

examined Entry 3 in List I, Entry 18 in List II and Entries 6, 7 and

13 in List III to observe that the general power of legislating in

respect of relationship between landlord and tenant can be traced

either under Entry 18 of List II or Entries 6 and 7 of List III. The

expression ‘land tenures including the relation of landlord and

tenant’ appearing in Entry 18 of List II, it was observed, was used

only with reference to the relationship of landlord and tenant in

respect of vacant lands and does not cover tenancy of buildings or

house accommodation. Nevertheless, the Court did not give a

8 (1969) 2 SCC 289

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 21 of 46

finding in definite terms as the relationship of landlord and tenant

in question was in respect of a house accommodation situated in

a cantonment area and therefore was covered by Entry 3 of List I

which vests exclusive power to make laws for the cantonment

areas in the Parliament. Subsequent decision in Jaisingh Jairam

Tyagi and Others v. Mamanchand Ratilal Agarwal and Others

9

and a Constitution Bench judgment in V. Dhanapal Chettiar v.

Yesodai Ammal

10

substantially follow Indu Bhushan (supra) to

hold that the subject matter of housing and accommodation falls

within the purview of the Concurrent List.

26.In Accountant and Secretarial Services Pvt. Ltd. and Another

v. Union of India and Others

11

, this Court had examined the

question of repugnancy and interplay between the Central

enactment, viz. the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971 based on the pattern of the West Bengal

Public Land (Eviction of Unauthorised Occupants) Act, 1962 and

the West Bengal Premises Tenancy Act, 1956 and the question

which of these enactments would prevail. 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 the corresponding entries in

the Government of India Act, 1935 to hold that all the three

9 (1980) 3 SCC 162

10 (1979) 4 SCC 214

11 (1988) 4 SCC 324

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 22 of 46

legislations were passed in exercise of powers conferred with

respect to matters contained in the Concurrent List. In view of the

repugnancy and conflict between the Central enactment on one

hand and the State law on the other, in terms of Article 254, the

Central enactment shall prevail. Further, notwithstanding the

earlier precedents, the Court had examined the question of the

relevant entry applicable to the tenancy legislation and rejected

the contention that Entry 18 of List II should be interpreted as

encompassing within its ambit legislation on the relationship of

landlord and tenant in regard to housing and buildings. Setting out

several reasons it was observed that the power to legislate in

respect of tenanted premises would fall within the ambit and

scope of Entries 6, 7 and 13 of the Concurrent List and would not

be referable to Entry 18 of List II. The expression ‘land’ in Entry 18

of List II should be given as wide a construction as possible, but

has to be read with the relevant entries in other Lists to give

meaning and content to all of them. Inclusion of buildings and

housing in the Concurrent List is appropriate and to place

buildings and housing within the ambit of the expression ‘land’ in

Entry 18 of List II would denude other entries in Lists I and III

concerning transfer of property, devolution and succession of land

and buildings, etc. of their vigour and would render them otiose.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 23 of 46

27.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. We do not

subscribe to the view that the legislative lists under the Seventh

Schedule envisage and mandate separate legislation by the

Central Government for Non-Resident Indian landlords.

28.Keeping in view the aforesaid position, the Amendment Act

enacted by the State legislature was well within its competence.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 24 of 46

We would, however, note that in the context of the Union Territory

of Chandigarh 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 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.

C.Whether Section 13-B of the Rent Act is arbitrary and

unreasonable inasmuch as it does not afford any legal

remedy to the tenants?

29.Before we delve into this question, we would reproduce Section

19(2-B) of the Rent Act which reads as under:

“19. (2-B) The owner, who is a Non-Resident Indian

and who having evicted a tenant from a residential

building or a scheduled building and/or non-residential

building in pursuance of an order made under Section

13-B, does not occupy it for a continuous period of

three months from the date of such eviction, or lets out

the whole or any part of such building from which the

tenant was evicted to any person, other than the tenant

in contravention of the provisions of sub-section (3) of

Section 13-B, shall be punishable with imprisonment

for a term, which may extend to six months or with fine

which may be extended to one thousand rupees or

both.”

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 25 of 46

The provision incorporates statutory safeguards to check

and penalise deceitful and two-faced landlords and gives the right

of restitution to the defrauded tenant.

30.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.

Sub-sections (4), (5), (6) and (8) to Section 18-A of the Rent Act

are reproduced:

“18-A. (4) The tenant on whom the service of summons

has been declared to have been validly made under

sub-section (3), shall have no right to contest the

prayer for eviction from the residential building or

scheduled building and/or non-residential building, as

the case may be, unless he files an affidavit stating the

grounds on which he seeks to contest the application

for eviction and obtains leave from the Controller as

hereinafter provided, and in default of his appearance

in pursuance of the summons or his obtaining such

leave, the statement made by the specified landlord or,

as the case may be, the widow, widower, child,

grandchild or the widowed daughter-in-law of such

specified landlord or the owner, who is a non-resident

Indian in the application for eviction shall be deemed to

be admitted by the tenant and the applicant shall be

entitled to an order for eviction of the tenant.

(5) The Controller may give to the tenant leave to

contest the application if the affidavit filed by the tenant

discloses such facts as 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-resident

Indian, from obtaining an order for the recovery of

possession of the residential building or scheduled

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 26 of 46

building and/or non-residential building, as the case

may be, under Section 13-A or Section 13-B.

(6) Where leave is granted to the tenant to contest the

application, the Controller shall commence the hearing

on a date not later than one month from the date on

which leave is granted to the tenant to contest and

shall hear the application from day to day till the

hearing is concluded and application decided.

xx xx xx

(8) No appeal or second appeal shall lie against an

order for the recovery of possession of any residential

building or scheduled building and/or non-residential

building, as the case may be, made by the Controller in

accordance with the procedure specified in this section:

Provided that the High Court may, for the purpose of

satisfying itself that an order made by the Controller

under this section is in accordance with law, call for the

records of the case and pass such order in respect

thereto as it thinks fit.”

31.In Baldev Singh Bajwa v. Monish Saini

12

, this Court referring to

the provisions of Section 18-A of the Rent Act had observed:

“11. [...] These provisions indicate that in order to

obtain leave to contest the application of the landlord,

the tenant has to file an affidavit taking the grounds on

which he wants to contest that application. If the

affidavit filed by the tenant discloses such facts as

would disentitle the NRI landlord from obtaining an

order for the recovery of immediate possession, the

Controller would grant leave to the tenant to contest

the landlord’s application for eviction. Once the leave is

granted, the application is required to be disposed of

as per the procedure applicable to the Court of Small

Causes. The Controller is required to commence the

hearing within one month from the date on which the

leave is granted to the tenant to contest. The

12 (2005) 12 SCC 778

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 27 of 46

application shall be heard day to day till hearing is

concluded and application decided. The order to direct

recovery of possession of the suit accommodation

made by the Controller is not subject to appeal or

second appeal. However, the High Court may call for

the record of the case to satisfy itself that the order

passed by the Controller is in accordance with law and

may pass such order as it thinks fit.”

32.In Ravi Dutt Sharma v. Ratan Lal Bhargava

13

, this Court had

discussed the object of rent control legislation and also insertions

made to provide expeditious, effective and speedy remedy for a

class of landlords who require the premises for bona fide use, to

hold:

“7. […] The dominant object of the amending act [is] to

provide a speedy, expeditious and effective remedy for

a class of landlords contemplated by Sections 14(1)(e)

and 14-A and for avoiding unusual dilatory process

provided otherwise by the Rent Act. It is common

experience that suits for eviction under the Act take a

long time commencing with the Rent Controller and

ending up with the Supreme Court. In many cases

experience has indicated that by the time the eviction

decree became final several years elapsed and either

the landlord died or the necessity which provided the

cause of action disappeared and if there was further

delay in securing eviction and the family of the landlord

had by then expanded, in the absence of

accommodation the members of the family were

virtually thrown on the road. It was this mischief which

the Legislature intended to avoid by incorporating the

new procedure in Chapter III-A. The Legislature in its

wisdom thought that in cases where the landlords

required their own premises for bona fide and personal

necessity they should be treated as a separate class

along with the landlords covered by Section 14-A and

should be allowed to reap the fruits of decrees for

eviction within the quickest possible time. It cannot,

13 (1984) 2 SCC 75

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 28 of 46

therefore, be said that the classification of such

landlords would be an unreasonable one because such

a classification has got a clear nexus with the objects

of the amending Act and the purposes which it seeks to

subserve.”

33.Section 18-A 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. The observations of this Court

in Ravi Dutt Sharma (supra) are apposite. 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.

Repelling a similar challenge on the ground that 25-B of the Delhi

Rent Control Act, 1958 does not provide for an appeal or second

appeal against an order of eviction, in Kewal Singh v. Smt.

Lajwanti

14

it was observed:

“19. […] An appeal is purely a creature of the statute

and this right has not been given in order to cut out

unnecessary delay. Instead the highest Court of the

State has been given a wide power of revision where

the said Court can examine the case of the tenant and

the landlord and the validity of the order passed by the

Controller. The right of the tenant, therefore, is

sufficiently safeguarded by the proviso to sub-section

(8) of S. 25B of the Act referred to above. In order to

14 (1980) 1 SCC 290

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 29 of 46

give relief to the tenant against any apparent error of

law or fact where no revision has been filed in the High

Court the statute confers power of review on the

Controller.”

34.On the requirement of ‘bona fide need’ of Non-Resident Indian

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 almost all Rent Control Acts with

the underlying legislative intent which has been

considered and demonstrated innumerable times by

various High Courts as also by this Court, some of

which we would like to refer to. In Ram Dass v. Ishwar

Chander it is said that the bona fide need should be

genuine and honest, conceived in good faith. It was

also indicated that the landlord’s desire for possession,

however honest it might otherwise be, has inevitably a

subjective element in it, and that desire, to become a

“requirement” in law must have the objective element

of a “need”, which can be decided only by taking all the

relevant circumstances into consideration so that the

protection afforded to a tenant is not rendered illusory

or whittled down.

15. In Bega Begum v. Abdul Ahad Khan it was held by

this Court that the words “reasonable requirement”

undoubtedly postulate that there must be an element of

need as opposed to a mere desire or wish. The

distinction between desire and need should doubtless

be kept in mind but not so as to make even the

genuine need as nothing but a desire.

16. In Surjit Singh Kalra v. Union of India a three-Judge

Bench of this Court has held as under:

“20. The tenant of course is entitled to raise all

relevant contentions as against the claim of the

classified landlords. The fact that there is no

reference to the words bona fide requirement in

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 30 of 46

Sections 14-B to 14-D does not absolve the

landlord from proving that his requirement is

bona fide or the tenant from showing that it is not

bona fide. In fact every claim for eviction against

a tenant must be a bona fide one. There is also

enough indication in support of this construction

from the title of Section 25-B which states

‘special procedure for the disposal of

applications for eviction on the ground of bona

fide requirement’.”

17. In Shiv Sarup Gupta v. Dr. Mahesh Chand Gupta

this Court while dealing with the aspect of bona fide

requirement has said that the sense of felt need which

is an outcome of a sincere, honest desire, in

contradistinction with a mere pretence or pretext to

evict a tenant, refers to a state of mind prevailing with

the landlord. The only way of peeping into the mind of

the landlord is an exercise undertaken by the judge of

facts by placing himself in the armchair of the landlord

and then posing a question to himself — whether in the

given facts, substantiated by the landlord, 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 landlord of the suit accommodation is to be

established as a genuine need and not a pretext to get

the accommodation vacated. The provisions of

Sections 18-A(4) and (5) concede to the tenant’s right

to defend the proceedings initiated under Section 13-B

showing that the requirement of the landlord is not

genuine or bona fide. The legislative intent for setting

up of a special procedure for NRI landlords is obvious

from the legislative text which has been deliberately

designed making distinction between the ordinary

landlords and special category of landlords. The

Controller’s power to give leave to contest the

application filed under Section 13-B is restricted by the

condition that the affidavit filed by the tenant discloses

such fact as would disentitle the landlord from

obtaining an order for recovery of possession. It is

needless to say that in the summary proceedings the

tenant’s right to contest the application would be

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 31 of 46

restricted to the parameters of Section 13-B of the Act.

He cannot widen the scope of his defence by relying on

any other fact which does not fall within the parameters

of Section 13-B. The tenant’s defence is restricted and

cannot go beyond the scope of the provisions of the

Act applicable to the NRI landlord. Under Section 13-B

the landlord is entitled to eviction if he requires the suit

accommodation for his or her use or the use of the

dependant, who ordinarily lives with him or her. The

requirement would necessarily have to be genuine or

bona fide requirement and it cannot be said that

although the requirement is not genuine or bona fide,

he would be entitled to the ejectment of the tenant nor

can it be said that in no circumstances will the tenant

not be allowed to prove that the requirement of the

landlord is not genuine or bona fide. A tenant’s right to

defend the claim of the landlord under Section 13-B for

ejectment would arise if the tenant could be able to

show that the landlord in the proceedings is not an NRI

landlord; that he is not the owner thereof or that his

ownership is not for the required period of five years

before the institution of proceedings and that the

landlord’s requirement is not bona fide.”

35.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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 32 of 46

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 13-B. The reasoning in Baldev Singh

Bajwa (supra) exposits that 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.

36.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. This is clear from subsequent

elucidation by this Court in paragraphs 20 and 21 in Baldev

Singh Bajwa (supra). The true ratio, in our opinion, is reflected in

paragraph 25 which reads as under:

“25. On the interpretation given by us and on a plain

reading of the provisions, once in a lifetime possession

is given to an NRI to get one building vacated in a

summary manner. A non-resident Indian landlord is

required to prove that: (i) he is an NRI; (ii) that he has

returned to India permanently or for a temporary

period; (iii) requirement of the accommodation by him

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 33 of 46

or his dependant is genuine; and (iv) he is the owner of

the property for the last five years before the institution

of the proceedings for ejectment before the Controller.

The tenant’s affidavit asking for leave to contest the

NRI landlord’s application should confine itself to the

grounds which NRI landlord is required to prove, to get

ejectment under Section 13-B of the Act. The

Controller’s power to give leave to contest the

application filed under Section 13-B is circumscribed to

the grounds and inquiry on the aspects specified in

Section 13-B. The tenant would be entitled for leave to

contest only if he makes a strong case to challenge

those grounds. Inquiry would be confined to Section

13-B and no other aspect shall be considered by the

Controller.”

The requirement of a ‘strong case’ for obtaining leave to

defend means a good case that brings to fore reasonable and

well-grounded 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 paragraph

25 in Baldev Singh Bajwa (supra). The standard applied is

similar to parameters elucidated in Inderjeet Kaur v. Nirpal

Singh

15

, in which this Court had held that the leave to defend

should not be granted on mere asking but when the pleas and

contentions raise triable issues and the dispute on facts demands

that the matter be properly adjudicated after ascertaining the truth

of affidavits filed by the witnesses in their cross-examination. Each

15 (2001) 1 SCC 706

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 34 of 46

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 13-B can be held to be arbitrary and

unreasonable.

37.The expression ‘one building’ appearing in sub-clause (2) to

Section 13-B was examined by a three Judge Bench of this Court

in Swami Nath v. Nirmal Singh

16

by referring to the earlier

judgment of this Court in Baldev Singh Bajwa (supra), to

observe:

“13. Reliance was placed on the decision of this Court

in Baldev Singh Bajwa v. Monish Saini where the same

question had come up for consideration and it was

observed that on a plain reading of the provisions of

Section 13-B, it would be obvious that once in a lifetime

possession is given to an NRI to get one building

vacated in a summary manner. It was also submitted

that the ownership of the respondent landlord in

respect of only one building had not been disputed by

the petitioners and the only contention that was raised

on their behalf was that each separate tenancy in a

building would amount to a separate unit and after

exhausting the right of summary possession once, it

was no longer available to the NRI landlord to exercise

such an option for the second time to a particular

16 (2010) 9 SCC 452

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 35 of 46

building, which contention had been negated by the

courts below.

14. We have carefully considered the submissions

made on behalf of the respective parties and we are

unable to agree with the submissions made on behalf

of the petitioners. The interpretation sought to be given

to the proviso to Section 13-B(1) of the 1949 Act would

lead to an absurd situation which was not

contemplated by the legislature while introducing the

provisions of Section 13-B by way of amendment in

2001. The very object of the amendment would be

frustrated if the narrow and constricted meaning being

canvassed on behalf of the petitioners is to be

accepted.

15. The provisions of Section 13-B of the 1949 Act

have been correctly interpreted and dealt with in

Baldev Singh Bajwa case and in that view of the

matter, the special leave petitions must fail and are

dismissed. …”

The third contention is accordingly rejected.

D.Whether classifying Non-Resident Indian landlords as a

separate category renders Section 13-B invalid and ultra vires

Article 14 of the Constitution?

38.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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 36 of 46

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, this Court in Ram Krishna Dalmia v.

Justice S.R. Tendolkar

17

had postulated two conditions which

must be satisfied for a classification to withstand a challenge

under Article 14, namely: i) 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 (ii) the

differentia must have a rational relation or nexus to the object

sought to be achieved by the statute in question. In State of A.P.

and Others v. Nallamilli Rami Reddi and Others

18

, this Court

had further elucidated that a challenge on the ground of denial of

equal treatment will not sustain when the legislature intends to

classify persons under a well-defined class. 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

17 1959 SCR 279: AIR 1958 SC 538

18 (2001) 7 SCC 708

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 37 of 46

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 (See Pioneer

Urban Land & Infrastructure Limited and Another v. Union of

India and Others in Writ Petition (Civil) No. 43 of 2019 decided

on 09.08.2019).

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 38 of 46

39.The object and reasons for enacting Section 13-B in the Rent Act

vide the Amendment Act were explained in Baldev Singh Bajwa

(supra) in the following words:

“The State Government had been receiving

representations from various NRI individuals and

through their associations highlighting the plight of

Indian residents returning to India after long years

abroad. It was represented that the NRIs having spent

long years of their life abroad did not find conditions

congenial in their own country on their return either to

settle down or to take up any business. On account of

rigid legal provisions of the existing rent laws, the NRIs

were unable to recover possession of their own

residential building from the tenants. The Government

having considered the situation had decided that the

existing rent legislation viz. the East Punjab Urban

Rent Restriction Act, 1949 should be amended to

provide relief to NRIs to enable them to recover

possession of a residential or scheduled building

and/or one non-residential building for their own use.”

The effect of Section 13-B and other provisions of the Rent

Act was explained as:

“10. The amendment introduced in the Act created a

special class of NRI landlords and reposed special

rights in them to recover immediate possession from

the tenants occupying their premises, provided such

premises were required by them. Section 13-B intends

to provide immediate possession of the

accommodation to the NRI landlord which is in

possession of the tenant if the landlord requires the

same for his or her use or for the use of anyone

ordinarily living with him/her and is dependent on him

or her. Sub-section (1) of Section 13-B postulates that

the NRI landlord should be the owner of the building

from which he has asked ejectment of the tenant. He

should require the same for his or her use or for the

use of anyone ordinarily living with him/her and is

dependent on him or her. He should be the owner of

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 39 of 46

that building for five years before he applied to the

Controller for possession of such building. The right

under Section 13-B of immediate possession could be

availed of only once during the lifetime of such an

owner/NRI landlord. Sub-section (2) of Section 13-B

gives a choice to the NRI landlord to select one among

several other residential buildings or scheduled

buildings and/or non-residential buildings for the

purpose of eviction of the tenant from that premises.

Residential building is defined in Section 2(g) to mean

a building which is not a non-residential building.

Scheduled building is defined in Section 2(h) of the Act

which means a residential building being used by a

person engaged in one or more of the professions,

namely, lawyers, architects, dentists, engineers,

veterinary surgeons, medical practitioners including

practitioners of indigenous systems of medicine and

who occupies the same partly for his business and

partly for his residence. Sub-section (3) of Section 13-B

puts a restriction on the landlord to deal with building of

which he has taken possession by virtue of the order

passed under Section 13-B of the Act of 1949. Under

this section the owner who recovers the possession of

the building by virtue of the order passed under Section

13-B shall neither transfer it either by sale or by any

other mode nor shall he let it out for the period of five

years from the date he took possession of the building.

In case there is a breach on the part of the owner who

took possession of the building, of any of the

conditions, the tenant who had been evicted would be

entitled to apply to the Controller for an order directing

that the tenant be restored back possession of that

building and on such a petition being moved, the

Controller would pass an appropriate order. Apart from

the restriction which is imposed by sub-section (3) of

Section 13-B on the landlord’s right to deal with the

building of which he took possession under the

provisions of Section 13-B, a further restriction has

been imposed on the landlord under Section 19(2-B) of

the Act of 1949. Section 19(2-B) contemplates that

when the order for possession is being passed in

favour of the owner-landlord under Section 13-B, he is

required to occupy the premises continuously for the

period of three months from the date of eviction of the

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 40 of 46

tenant. He is prohibited from letting out the whole or

any part of that building from which the tenant was

evicted to any other person except the tenant who had

been evicted by virtue of the order passed under

Section 13-B. In contravention of these restrictions, the

landlord is liable for a penal action and can be imposed

punishment of imprisonment for a term which may

extend to six months or with fine which may extend to

Rupees one thousand or with both.”

40.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 socio-economic

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, therefore, 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. In

several decisions, this Court has emphasised that there is a need

for balancing the two rival interests as has been observed in

Malpe Vishwanath Acharya and Others v. State of

Maharashtra and Another

19

, Joginder Pal v. Naval Kishore

Behal

20

, Satyawati Sharma (Dead) By LRs v. Union of India

19 (1998) 2 SCC 1

20 (2002) 5 SCC 397

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 41 of 46

and Another

21

and in the recent decision in Vinod Kumar v.

Ashok Kumar Gandhi in Civil Appeal No. 3793 of 2016 decided

on 05.08.2019.

41.In Kewal Singh (supra) this Court had rejected the challenge of

discrimination and arbitrariness predicated on Article 14 to the

summary procedure under Section 25-B of the Delhi Rent Control

Act, 1958 applicable in cases of personal necessity of landlords.

The contention that Section 25-B creates a special class of

landlords who are given favourable treatment for speedy eviction

of tenants was rejected as without any substance. The rent control

legislation should be just and fair to the landlords. Accordingly, it

was observed that it is always open to the legislature to check,

regulate and also confer rights upon the landlords to enable them

to seek eviction in certain circumstances. Referring to the ground

of personal necessity, it was observed:

“17. [...] Thus, such a landlord becomes a class by

himself. The statute thus puts personal necessity of the

landlord as a special class requiring special treatment

for quick eviction of the tenant and cuts out all delays

and plugs all the loopholes which may cause delay in

getting the relief by the landlord. It is obvious,

therefore, that the classification made by the legislature

is in public interest and is in complete consonance with

the objectives sought to be achieved. The landlords

having personal necessity have been brought together

as a separate class because of their special needs and

such a classification cannot be said to be unreasonable

21 (2008) 5 SCC 287

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 42 of 46

particularly when the legislature in its wisdom feels that

the landlords 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 the rent

control legislation are pertinent:

“7. […] Tenants cannot complain of any discrimination

because the Rent Act merely gave certain protection to

them in public interest and if the protection or a part of

it afforded by the Rent Act was withdrawn and the

common law right of the tenant under the Transfer of

Property Act was still preserved, no genuine grievance

could be made.”

Similar views were also expressed in Kewal Singh (supra)

in the following words:

“22. Thus, we do not see how can the tenant challenge

the validity of such a provision enacted by the

legislature from which the tenant itself derived such

rights.

23. In the instant case, the legislature has not taken

away the right of the tenant at all but has merely

simplified the procedure for eviction of the tenant in

cases falling within the ambit of Sections 14-A and

14(1)(e) of the Act as discussed in the judgment. In

these circumstances, therefore, any challenge by the

tenant to the constitutionality of the Act must

necessarily fail and hence Section 25-B is

constitutionally valid.”

43.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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 43 of 46

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 should be 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.

44.The right of Non-Resident Indians to initiate eviction under the

summary procedure provided in Section 18-A of the Rent Act 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 Non-

Resident 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

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 44 of 46

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.

45.Section 13-B cannot, therefore, 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.

46.Before reserving the judgment, we had heard counsel for the

appellants on merits and had expressed that we were not inclined

to interfere with the factual findings. Accordingly, we have not

dealt with the factual matrix in each case and have examined and

answered the legal issues raised. In view of the findings

upholding the constitutional validity of Section 13-B of the Rent Act

and its extension and applicability to the Union Territory of

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 45 of 46

Chandigarh, we would dismiss the afore-captioned appeals by the

tenants. There would be no order as to costs.

......................................CJI

(RANJAN GOGOI)

........................................J.

(L. NAGESWARA RAO)

......................................J.

(SANJIV KHANNA)

NEW DELHI;

NOVEMBER 14, 2019.

Civil Appeal arising out of

SLP (C) No. 26925 of 2011 & connected matters Page 46 of 46