Appeal No 1744 of 1976
Appeal by Special Leave from the Judgment and Order dated 2841975 of the Punjab  Haryana High Court in Civil Writ Petition No 181975 MK Ramamurthi and J Ramamurthi for the appellants
Madan Mohan for the respondents 4 8 10 25 27 30  32 36
BD Sharma  RN Sachthey for respondents 1 2
The Judgment of the Court was delivered by JASWANT SINGH J
This appeal by special leave which is directed against the judgment and order dated April 28 1975 of the High Court of Punjab and Haryana at Chandigarh dismissing Civil Writ Petition No 1819 of 1975 filed by the appellants and respondents 3 to 37 herein who are industrial workers employed in Factories situate in the industrial area in Chandigarh
The facts leading to this appeal are In 1956 the Legislature of the then State of Punjab enacted what is called the Punjab Industrial Housing Act 1956 Punjab Act 16 of 1956 hereinafter referred to as the Act  to pro vide for allotment recovery of rent eviction and other ancillary matters in respect of houses constructed under the subsidised Industrial Housing Scheme for industrial workers in the State of Punjab
In exercise of the powers conferred on it under section 24 of the Act the State Government made rules called the Punjab Industrial Housing Rules 1956 hereinafter referred to as the Rules 
Rule 4 of the Rules as originally made ran as under 4
Eligibility for allotment 1 Two roomed tenements shall be allotted to indus trial workers whose income exceeds Rs 100 per mensem
2 One roomed tenements shall be allotted to workers with an income not exceeding Rs100 per mensem
 329 This rule was amended vide Notification No 4119 2HG 6C 29333 dated October 5 1960
The rule after its aforesaid amendment read as under 4
Eligibility for allotment 1 Two roomed tenements shah be allotted to industrial workers whose income does not exceed Rs 35000 per mensem
2 One roomedsmall two roomed tenements shall be allotted to workers with an income not exceeding Rs 25000 per mensem provided that where sufficient number of industrial workers with income exceeding Rs 25000 per mensem is not forthcoming for allotment the Labour Commissioner may with the approval of the State Government allot two roomed tene ments to industrial workers with an incOme not exceeding Rs 25000 per mensem
Notes In towns where only roomedsmall two roomed tenements have been built applica tions should first be invited from such work ers only whose monthly income does not exceed Rs 25000
It is only after the demand from these workers has been met that unallotted tenements should be made available for allot ment to workers whose income exceed Rs 25000 per mensem
Where these tenements are given to higher paid workers the normal subsi dised rent should be charged from them till such time as the regular two roomed tenements do not become available for them
When the two roomed tenements become available the higher paid workers must be removed from the smaller tenements failing which they should be charged the full economic rent
ii In cases where after allotment of one roomedsmall two roomed tenements a worker crosses the wage limit of Rs 25000 per mensem he may be allowed to continue in occupation of the house allotted to him on payment of subsidised rent till such time as the regular two roomed house does not become available in other respects the procedure as prescribed in note i should be followed
iii Two roomed tenements should in the first instance be offered from allotment to workers whose income is between Rs 25100 and Rs 35000 per mensem Vide Notification No 7480 4H8 7221542 dated Novem ber 7 1972 the Chief Commissioner Union Territory Chand igarh made in exercise of the powers conferred by section 24 of the Act what are called the Punjab Industrial Housing Chandigarh First Amendment Rules 1972 adding the fol lowing after sub rule 2 in Rule 4 of the Rules 330 3 An industrial worker shall become ineligible to retain the industrial house allotted to him from the date his income exceeds Rs 350 per mensem and his allotment of it shall stand cancelled with effect from that date
Provided that in case such an industrial worker has been allotted and is in occupation of an industrial house immediately before the commencement of the Punjab Industrial Hous ing Chandigarh First Amendment Rules 1972 his allotment shall be cancelled by the Labour Commissioner after giving him one month S notice in writing of such cancella tion
Chief Commissioner also ordained that the following shall be added in form C  of the Rules after condition 24  25 The allottee shall become ineligible to retain the industrial house allotted to him from the date his income exceeds rupees 350 per mensem and his allotment shall be deemed to have been cancelled from that date
 The appellants and the aforesaid respondents who were allottees of houses in Sector 30 Chandigarh constructed by the State Government for occupation of industrial workers under the Industrial Housing Scheme subsidised by the Central Government and declared under section 3 2 of the Act to be houses covered by the provisions of the Act were given notices
by the Labour Inspector Union Territory Chandigarh in terms of the proviso to sub rule 3 of rule 4 of the Rules as amended by the aforesaid Notification No 74804H8 7221542 dated November 7 1972 calling upon them to show cause as to why the allotment of houses made to them should not be cancelled as the income of each one of them exceeded Rs 350 per mensem which disentitled them to retain their respective allotments
The appellants and the aforesaid respondents thereupon filed a joint writ petition being writ petition No 1819 of 1975 under Arti cles 226 and 227 of the Constitution in the
High Court of Punjab and Haryana for issue of an appropriate writ order or direction quashing the said notices and notification No 7480 4H8 7221542 dated November 7 1972 amending Rule 4 of the Rules and restraining respondents 1 and 2 from pro ceeding with the cancellation of their respective allotments and evicting them from the houses
They contended that the aforesaid rule 4 as amended was ultra vires the Act in so far as it carved out an exception to the statutory defini tion of industrial worker  as contained in section 2e of the Act within the scope of which they admittedly fell
The High Court repelled their contention and dismissed their writ petition by its judgment dated April 28 1975
Ag grieved by this judgment and order the appellants and the said respondents made an application to the High Court for issue of a certificate of fitness under Article 133 of the Constitution which was refused by the High Court by its order dated May 9 1975
Thereupon they moved this Court for special leave under Article 136 of the Constitution which was granted
331 Appearing in support of the appeal Mr Ramamurthy has reiterated before us that since the appellants and respond ents 3 to 37 are admittedly industrial workers as defined in clause e of section 2 of the Act the impugned rule 4 which is designed to cancel their allotment on the ground that their salary exceeded Rs 350 per mensem is clearly repugnant to that clause and as such utra vires and invalid as it takes out industrial workers with income exceeding Rs 350per mensem from the scope of the definition
He has further contended that since the authority competent to make rules under section 24 of the Act cannot frame any rule having a retrospective effect and the impugned rule rule 43 as amended operates retrospectively the same is in valid
He has lastly urged that the impugned notification is also invalid as if makes hostile and arbitrary discrimi nation against industrial workers whose income exceeds Rs 350 per mensem and thereby violates the guarantee en shrined in Article 14 of the Constitution
We shall deal seriatim with all the three contentions raised by Mr Ramamurthy
Before embarking on that task we consider it appropriate to scan the scheme of the Act
Section 3 of the Act clearly states that the Act shall be applicable to houses constructed by the State Government for the occupation of industrial workers under the Industrial Housing Scheme subsidised by the Central Government
The scheme as evident from the affidavit of the Home Secre tary Chandigarh Government is meant for the benefit of the low aid industrial workers and economically weaker sections of the community
Section 91 of the Act provides that the occupation by any person of a house shall at all times be subject to such conditions relating to its occupation as may be prescribed or as may be intimated from time to time by the Labour Commissioner
Section 7 of the Act sets out the circumstances in which a person shall be treated to be in unauthorised occupation of any house
Clause b of the section explicity states that a person shall be deemed to be in unauthorised occupation Where being an allottee he has by reason of cancellation of an allotment under sub sec tion 2 of section 9 ceased to be entitled to occupy the house
Sub section 2 of section 9 which is necessary to be referred to at this stage and which because of the non obstante clause contained in its opening part overrides all other laws for the time being in force authorises the Labour Commissioner after giving notice to the allottee and considering the explanation tendered by him to cancel the allotment under which a house is held or occupied by him
Section 24 of the Act not only empowers the State Government generally to make rules to effectuate the purposes of the Act but also specifically confers on it the power to make rules to provide inter alia for the manner of allotment of accommodation and conditions relating to its occupation see section 242ii as also for the matters which are to be or may be prescribed see section 242x
A conspectus of the aforesaid provisions of the Act leaves no room for doubt that the allotment of accommodation to an industrial worker is not unconditional but is subject to conditions which can be changed unilaterally by the Government from time to time by altering the rules in exercise of the powers conferred on it 331a under section 24 of the Act
Section 7 of the Act which embodies a deeming provision gives a mandate to treat a person as an unauthorised occupant not only if he ceases to be an industrial worker under the Act but also if being an allottee he ceases tobe entitled to occupy the accommoda tion by reason of cancellation of the allotment under sub section 2 of section 9 of the Act
A combined reading of sections 7 and 9 of the Act goes to show that if at any time a person becomes an unauthorised occupant of the house by reason of his ceasing to be an industrial worker or by otherwise ceasing to fulfil any of the prescribed conditions then in force including the one relating to the limit of his income he becomes amenable to action under section 92 of the Act
The result is that even though the allottee may continue to be an industrial worker still the allotment under which he holds a house can be cancelled if his occupa tion becomes un authorised on any one of the grounds laid down in section 7 of the Act
We are therefore satis fied that the impugned amendment which squarely falls within the purview of the aforesaid provisions of section 24 of the Act was validly made and the contention urged by Mr Rama murthy that it is ultra vires is misconceived and untenable
We may state here in passing that the aforesaid scheme being meant for the benefit of the low paid industrial workers and the number of the houses constructed thereunder being very limited the Government could legitimately evolve the method which it did to disentitle industrial workers like the appellants whose monthly salaries appear to range between Rs 97471 and Rs 186127 and the aforesaid respondents whose monthly income is also relatively large to retain the houses in question
The contention of Mr Ramamurthi that the impugned rule is retroactive in operation is also devoid of merit
A careful study of the proviso to rule 43 of the Rules which appears to have been inserted to allay fears and remove misapprehensions would show that the rule is not intended to operate retrospectively on industrial workers who had been allotted and were in occupation of industrial houses immedi ately before the amendment of the Punjab Industrial Housing Chandigarh First Amendment Rules 1972
It une quivocally states that allotment of an industrial worker who is in occupation of an industrial house in pursuance thereof immediately before the amendment of the Punjab Industrial Housing Chandigarh First Amendment Rules 1972 shall not be cancelled without one month s notice in writing
The proviso therefore clearly shows that the allotment of an in dustrial worker whose income exceeds Rs 350 per mensem is to stand cancelled not from the date when his income started exceeding Rs 350 per mensem but on the expiry of one month s notice in writing of the cancellation
The second contention raised by Mr Ramamurthi is also therefore repelled
The third contention advanced by the learned counsel on behalf of the appellants not having been raised before the High Court cannot be permitted to be raised at this stage
The contention can also not be allowed to be raised in view of the Presidential Order dated June 27 331b 1975 promulgated under clause 1 of article 359 of the Consti tution suspending inter alia Article 14 of the Constitution for the period during which the proclamation of emergency made under clause I  of Article 352 of the Constitution on December 3 1971 and on June 25 1975 are both in force
For the foregoing reasons we do not find any merit in this appeal which is dismissed but in the circumstances of the case without any order as to costs
Counsel for the appellants submits that he may be given time for vacating the premises
We grant time till 31st August 1977 on the undertaking given by the counsel that vacant possession will be given on or before that date
MR Appeal dismissed


Summary:
The appellants and respondents Nos 3 to 37 herein were allottees of houses in Chandigarh constructed by the State Government for low paid industrial workers under the Industrial Housing Scheme subsidised by the Central Govern ment
The Labour Inspector Union Territory Chandigarh gave them notices in terms of the proviso to rule 43 of the Punjab Industrial Housing Rules 1956 as amended vide Notification dated November 7 1972 to
show cause why their allotments should not be cancelled
The income of each of them exceeded Rs 350 per mensem which disenti tled them to retain their allotments
The appellants and the said respondents filed a joint petition in the High Court for a writ to quash the amendment to rule 4 and to restrain the Government from cancelling their allotments and evicting them
The writ petition was dismissed
The appel lants contended firstly that rule 43 was ultra vires the Punjab Industrial Housing Act 1956 as it took out industri al workers with income exceeding Rs 350 pm from the scope of section 2e of the Act which defines industrial workers and secondly that the authority competent to make rules us 24 of the Act cannot frame rules having retrospec tive effect and as the amended rule 43 operates retro spectively it is invalid Dismissing the appeal by special leave the Court HELD 1 The allotment of accommodation to an industrial worker is not unconditional but is subject to conditions which can be changed unilaterally by the Government from time to time by altering the rules in exercise of the powers conferred on it under section 24 of the Act
Section 24 specifically empowers the State Government to make rules to provide inter alia for the manner of allotment of accom modation and conditions relating to its occupation
The impugned amendment which squarely falls within the purview of the aforesaid provisions of section 24 was validly made and was not ultra vires
331 G H 331 a C 2 Section 7 of the Act embodies a deeming provision and gives a mandate to treat a person as an unauthorised occupant not only if he ceases to be an industrial worker under the Act but also if being an allottee he ceases to fulfil any of the prescribed conditions then in force including the one relating to the limit of his income and thereby becomes amenable to action under section 92 of the Act
331a A B 3 The proviso to rule 43 clearly shows that the allotment of an industrial worker whose income exceeds Rs 350 per mensem is to stand cancelled not from the date when his income started exceeding Rs 350 per mensem but on the expiry of one month s notice in writing of the can cellation
The rule is not intended to operate retrospec tively on industrial workers who had been allotted and were in occupation of industrial houses immediately before 328 the amendment of the Punjab Industrial Housing Chandigarh First Amendment Rules 1972
331a E F The Court observed The scheme being meant for the benefit of the low paid industrial workers and the number of the houses constructed thereunder being very limited the Government could legiti mately evolve the method which it did to disentitle indus trial workers whose monthly income was relatively large to retain the houses
331 a C D