-1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T Kamal Kishore Vs. State of Rajasthan (1) D.B.Civil Writ Petition No..5051/2007 Pritam Singh Vs. State of Rajasthan (2) D.B.Civil Writ Petition No.3356/2004 Jugal Kishore Vs. State of Rajasthan (3) D.B.Civil Writ Petition No.4733/2004 Pritam Singh Vs. State of Rajasthan (4) D.B.Civil Writ Petition No.5604/2004 Rajkumar Vs. State of Rajasthan (5) D.B.Civil Writ Petition No.5842/2004 Madan Singh Vs. State of Rajasthan (6) D.B.Civil Writ Petition No.664/2005 Kirayedaar Vyaparik Sewa Vs. State of Rajasthan Samti (7) D.B.Civil Writ Petition No.952/2005 Girdharilal Vs. State of Rajasthan (8) D.B.Civil Writ Petition No.2014/2005 International Electronics Vs. State of Rajasthan (9) D.B.Civil Writ Petition No.2484/2005 Dungar Singh Vs. State of Rajasthan (10) D.B.Civil Writ Petition No.2625/2005 Dr.Shyam Behari Gupta Vs. State of Rajasthan (11) D.B.Civil Writ Petition No.5706/2005 Dr.Shyam Behari Gupta Vs. State of Rajasthan (12) D.B.Civil Writ Petition No.5707/2005 Tara Chand Vs. State of Rajasthan (13) D.B.Civil Writ Petition No.231/2006 -2- Shankerlal Vs. State of Rajasthan (14) D.B.Civil Writ Petition No.1506/2006 Birbal Ram Vs. State of Rajasthan (15) D.B.Civil Writ Petition No.1875/2006 Jugal Kishore Vs. State of Rajasthan (16) D.B.Civil Writ Petition No.2159/2006 Kalu Ram Vs. State of Rajasthan (17) D.B.Civil Writ Petition No.581/2007 UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. Date of Judgment: Dec.07, 2007 P R E S E N T HON'BLE MR.JUSTICE P.B.MAJMUDAR HON'BLE MR.JUSTICE DEO NARAYAN THANVI Mr.M.C.Bhoot Mr.M.R.Singhvi Mr.S.L.Soni Mr.M.L.Panwar Mr.Arun Kalla Mr.C.S.Kotwani Mr.B.K.Vyas ) for the petitioners. Mr.N.M.Lodha, Additional Advocate General. Mr.M.S.Singhvi Mr.Vikas Balia Mr.Om Mehta Mr.R.K.Thanvi Mr.Manish Pitaliya Mr.Vinod Bhadu ) for the respondents. -3- Mr.J.P.Joshi Mr.Ashok Chhangani) for the interveners. REPORTABLE BY THE COURT: (PER THANVI J.) 1. Two ancient maxims viz; (1) Judicis est jus dicere non dare: The judge's duty is to declare law and not to make it and (2) Talis interpretatio semper fienda est, ut evitetur absurdum et inconveniens, et ne judicium sit illusorium: That interpretation must be chosen which avoids an absurdity or inconvenience and which does not make a decision of court illusory, are coupled with the controversy involved in the present seventeen writ petitions, whereby the Constitutional validity of the Rajasthan Rent Control Act, 2001, hereinafter referred-to as “the New Act” in toto and Section 32(3)(a) of this New Act and Section 6 of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950, later styled as “the Old Act”, have been challenged by declaring them as ultravires to the Constitution of India. Though different reliefs have been sought in these petitions but broadly, they are of three categories. 2. The relief sought in the first set of petitions is to declare the New Act as ultravires to the Constitution of India; in the -4- second set, relief prayed-for is to declare Section 32(3)(a) of the New Act as ultravires to the Constitution of India and the third set of petitions is about the relief as to declaring Section 6 of the Old Act as ultravires to the Constitution of India vis-a-vis to recall or refer for reconsideration to a larger bench, the judgment passed by this Court on 30.9.1999 in D.B.Civil Writ Petition No.1193/1997 “Khem Chand vs. State of Rajasthan reported in 1999(2) WLC (Raj) p.228, whereby Section 6 (2) of the Old Act has been declared as ultravires to the Constitution of India. 3. We have heard learned counsel for the parties at length including the learned Additional Advocate General and categorically scrutinized the case law cited. For the sake of convenience, first we take the contention of learned counsel for the petitioners challenging the validity of the entire New Act with regard to legislative competency and being ultravires to Article 14 of the Constitution of India. The controversy whether the relation of landlord and tenant pertaining to the house and building is to be included under the Entry XVIII of State List in Seventh Schedule of the Constitution of India or not by virtue of conflicting opinions of various High Courts, has been set at rest by later decision of the Supreme Court in Ashok Marketing Limited v. Punjab National Bank reported in AIR 1991 SC 885, -5- whereby the legislation relating to the relationship of landlord and tenant including the rent control will now fall under Entry VI of the Concurrent List in the Seventh Schedule of the Constitution of India and the State legislature is competent to enact the law on this subject under Clause (2) of Article 246 of the Constitution of India and being a subject of concurrent list, it has also received the assent of the President of India on 25.2.2003. Thus, the contention of the learned counsel for the petitioners that the Bill lacks legislative competence, is devoid of force. 4. Regarding the second contention of the learned counsel for the petitioners with regard to Constitutional validity of the New Act, it has been argued that the provisions of the New Act violate Article 14 of the Constitution of India, as it fails to provide equal protection of laws to the same category of tenants. In this regard, Mr.M.R.Singhvi, learned counsel has drawn our attention to various provisions of the Old Act and the New Act, especially with regard to applicability of the Act in a particular area or class, fixation of Rent, grounds for Eviction, Constitution of separate Rent Control Tribunals, Repeal & Saving Clauses, etc. The Old Act of 1950 has been repealed in the year 2001 after a lapse of more than 50 years and its objects and reasons were -6- broadly as follows: “STATEMENT OF OBJECTS AND REASONS The Rajasthan Premises (Control of Rent and Eviction) Act, 1950 (Act No.17 of 1950) has been in force for nearly five decades and during these years the situation prevailing with regard to the premises in the State has undergone a considerable change and as a result of changed scenario, the law relating to premises warrants change. This matter has been engaging attention of the State Government for the past several years and the matter was considered time and again from all angles. The existing law owing to feeling of insecurity among the landlords in getting the premises vacated, is impeding the growth of letable premises. Hence, adequate provision for timely vacation of premises as also determination of fair rent is the necessity of the hour. Certain inbuilt safeguards for tenants are also required to be retained and certain premises are required to be kept out of the scope of new law. It has, therefore, become necessary to replace the existing law relating to control of rent and eviction of premises.” 5. Chapter 2 of the New Act dealing with the revision of rent under Section 6 and Chapter VIII dealing with repeal & saving clause under Section 32 of the New Act corresponding to Section 6 of the Old Act, have much been debated in the second and third category of petitions and will be dealt with later on. Rest of the provisions of the Old Act have been either amended or modified or repealed in the light of the Objects & Reasons given under the new Bill as indicated above. How far the Court can declare it to be ultravires to the Constitution of India, being -7- violative of Article 14, is a subject of decisive controversy in the present petitions. 6. The Constitution of India is a paramount law which represents the will of the people and is a mechanism under which laws are framed. In interpreting the Constitution, the court has to see that it is a documentation of the founding face of a nation and the fundamental directions for its fulfillment, whereas in interpreting a Statute, its pith and substance has to be looked into & the duty of the Court is to find the legislative intent. The general principle of interpretation and construction of Statute is that a court presumes its constitutionality and prefers an interpretation in favour of competency of the legislature. It is only when two meanings are inferred, whereby one results into the view of the legislature in effective result and the other results into manifest absurdity or futility or palpable injustice or anomaly, the Court should adopt the second view. 7. As enumerated in the Statements of Objects & Reasons of the New Act, it appears that while making the statement in the court by the Advocate General with regard to amendment in the New Act when the Constitutional validity of Section 6(2) of the Old Act was challenged in D.B.Civil Writ Petition No.1193/1997 “Khem Chand vs. State of Rajasthan” reported in 1999(2) WLC -8- (Raj) 228, the legislature also thought it fit that innumerable changes have been made in the state of premises, its construction value, insecurity in the mind of the landlords in getting the premises vacated which are required by them for their livelihood vis-a-vis safety of the tenants against the exorbitant hike in rent and also keeping certain premises out of the purview of this Act and thereby repealed the Old Law within its competence. 8. If we go by various Chapters of the New Act, Chapter 1 deals with preliminary matters about definition etc. and there is nothing in these five Sections of this Chapter which need any interpretation because it is neither absurd nor anomalous except Chapter 2 & 3, which have not been applied to certain premises and tenants. Chapter 2 & 3 deals with revision of rents and tenancy respectively and Section 32(3)(a) will be discussed with Sections 6. The tenancy for a limited purpose under Sec.8 & grounds of eviction of tenants under Sec.9 of the New Act are somewhat modified and a new provision has been made for a limited period of tenancy, which was not there in the Old Act. Likewise, the grounds of eviction are almost similar except comparative hardship etc. Apart from striking out the defence under Sec.13(j) of the Old Act, the most important addition in the New Act is about non-applicability of these provisions of -9- Chapter 2 and 3 of the Old Act on the premises as indicated below by virtue of clauses (i), (ii) and sub-clauses (a), (b) & (c) of clause (iii) of Section 3 of the New Act, which reads as under: Section 3. Chapters II and III not to apply to certain premises and tenancies – Nothing contained in Chapters II and III of this Act shall apply,- (i) to the new premises built or completed after the commencement of this Act and let out through a registered deed in which date of completion of such premises is mentioned; (ii) to the premises existing at the commencement of this Act, if let out after such commencement for a period of five years or more through a registered deed and the tenancy is not terminable before expiry of its duration at the option of the landlord; (iii) to any premises let out for residential purposes before or after the commencement of this Act, the monthly rent whereof is - (a) rupees seven thousand or more, in the case of the premises situated in the Municipal area of Jaipur City; (b) rupees four thousand or more, in the case of premises let out at places situated in the Municipal areas comprising the Divisional Headquarters, Jodhpur, Ajmer, Kota, Udaipur and Bikaner; (c) rupees two thousand or more, in case of premises let out at places situated in other Municipal areas to which this Act extends for the time being.” 9. Rest of the sub-clauses of this Clause (iii) of Section 3 of the New Act were already existing in the Old Act. By excluding the premises built after commencement of this Act or premises -10- existing at the commencement of this Act and let out after such commencement for five years through registered deed and also premises let out for residential purposes for Rs.7000/- or more in municipal area of Jaipur City, Rs.4000/- or more at the Divisional Headquarters and Rs.2000/- or more in case of other municipal areas to which Act extends, the legislature has not transgressed its competence in making the law because it was a statutory right and not a vested right as it has been held in many judicial decisions, some of them are referred below. 10. In Melapur Club vs. State of Tamil Nadu reported in 2005 (12) SCC 752, it has been held that a benefit which has been granted under the Statute, cannot be a vested right and the same can be withdrawn by the legislature by enactment, both retrospectively and prospectively. 11. In Prabhakaran Nair vs. State of Tamil Nadu reported in AIR 1987 SC 2117, it has been held as under: “36.Tenants are in all cases not the weaker sections. There are those who are weak both among the landlords as well as the tenants. Litigations must come to end quickly. Such new Housing Policy must comprehend the present and anticipate the future. The idea of a National Rent Tribunal on an All India basis with quicker procedure should be examined. This had become an urgent imperative of today's revolution. A fast changing society cannot operate with unchanging law and preconceived judicial attitude.” -11- 12. In D.C.Bhatia vs. Union of India reported in 1995(1) SCC 104 while discussing the report of the National Urbanization and the objects of the Delhi Rent Control Act of 1958, the Hon'ble Supreme Court observed as under: “28. In order to strike a balance between the interests of the landlords and also the tenants and for giving a boost to house-building activity, the legislature in its wisdom has decided to restrict the protection of the Rent Act only to those premises for which rent is payable up to the sum of Rs.3500 per month and has decided not to extend this statutory protection to the premises constructed on or after the date of coming into operation of the Amending Act for a period of ten years. This is a matter of legislative policy. The legislature could have repealed the Rent Act altogether. It can also repeal it step by step. It has decided to confine the statutory protection to the existing tenancies whose monthly rent did not exceed Rs.3500. 29. In our view, it is for the legislature to decide what should be the cut-off point for the purpose of classification and the legislature of necessity must have a lot of latitude in this regard. It is well settled that the safeguard provided by Article 14 of the Constitution can only be invoked, if the classification is made on the grounds which are totally irrelevant to the object of the statute. But, if there is some nexus between the objects sought to be achieved and the classification, the legislature is presumed to have acted in proper may result in some hardship. But, a statutory discrimination cannot be set aside, if there are facts on the basis of which this statutory discrimination can be justified.” 13. The same view in D.C.Bhatia's case (supra) was also reiterated in Parripati Chandrasekharrao v. Alapati Jalaiah reported in AIR 1995 SC 1781 and Ambalal vs. Sara Bhai -12- reported in 2001(8) SCC 397.. 14. On the question of exclusion of premises from the operation of the Act, the Hon'ble Supreme Court has also recently held it to be a valid classification on the basis of economic criterion in Saraswat Cooperative Bank vs. State of Maharashtra reported in 2006(8) SCC p.520, wherein it has been held as under: “30.Although, earlier a view had been taken by this Court that prescribing such a standard or differentiating between categories of tenancies was violative of Article 14 of the Constitution, the subsequent view taken by this Court is that so long as the classification sought to be made was based on an intelligible differentia and had a nexus with the object sought to be achieved by the statute, the same would not offend the equality clause contained in Article 14 of the Constitution. 31. Resultingly, it is quite clear that it is within the legislative competence of the State to enact laws for the protection of certain sections of society on the basis of economic criteria and so long as it does not result in unreasonable classification, it is for the legislature to decide whom it should include or exclude from the application of such laws” 15. In the light of the aforesaid decisions and considering the Statement of Objects & Reasons of the Bill referred-to above, it transpires that the provisions of Chapters 1 to 4 dealing with the classification of tenants on economic criterion, restricting its protecting to particular premises, etc. is a policy decision based -13- on social justice and can never be termed as unjust, unreasonable or unfair so as to infringe Article 14 of the Constitution of India. Chapter 6 and 7 deals with the amenities and the miscellaneous provisions respectively, except non obstante clause under Section 32(3)(a) of repeal and saving, which will be discussed later on. Lastly, Chapter 5 is about the constitution of Tribunals whereby the jurisdiction has been taken away from the Civil Courts to that of Rent Control Tribunals. Part XIV A of the Constitution dealing with the Administrative & other Tribunals , prescribes under Clause (1) of Article 323B that appropriate legislature may, by law, provide for adjudication or trial by tribunals of any dispute, complaints or offences with respect to all or any of the matters specified in Clause (2) with respect to which such legislature has power to make laws. Sub clause (h) of Clause (2) of Article 323B has been inserted by the Constitution 75th Amendment Act of 1993, whereby the rent, its regulation, control and tenancy issues including the right, title & interest of landlord and tenants had been incorporated in it. Therefore, the validity of Chapter 5 of the New Act regarding constitution of the Rent Control Tribunals cannot be also termed as violative of Article 14 of the Constitution. 16. Fixing the criterion of applicability under the New Act for a specified rent rate and classifying tenants for residential & -14- commercial purposes on time demand, cannot be termed as violative of fundamental right, as the right conferred on the tenant under the rent Law is a protective or legal right under a statute which can be termed as a mere civil right and not a fundamental right and it is within the domain of the legislature to make such a classification of tenant and periodical revision of rent, economic criterion for applicability of the Act, constitution of the Tribunals to achieve the object for which enactment is made, etc. Thus, in no way, the provisions of the New Act can be termed as beyond the legislative competence and in violation of Article 14 of the Constitution. It is the wisdom of the legislature to make a policy based on the consideration of protecting the vested rights of the landlords on their lands and ensuring safeguards to the tenants against exorbitant rent rate. 17. Second & third set of present petitions relates to the validity of Section 32(3)(a) of the New Act and Section 6(1) & (3) to (5) of the Old Act vis-a-vis referring the decision of Khem Chand's case (supra) to the larger Bench in which Section 6(2) of the Old Act was declared ultravires, being violative of Article 14 of the Constitution of India. 18. It is contended by the learned counsel for the petitioners that by repealing the Old Act, a non obstante clause has been -15- inserted under the New Act vide Section 32(3)(a), whereby pending applications, suits or other proceedings have been saved, which shall be governed by the provisions of the Old Act as if the New Act has not come into force. By making so, a great anomaly and hardship has been caused to the tenants in the matter of fixation of standard rent. According to the learned counsel for the tenants, sub-sections (3) to (5) of Section 6 of the Old Act are subject to sub-section (2) of Section 6 and when sub-section (2) of Section 6 has been declared ultravires in Khem Chand's case (supra), an unfettered and arbitrary power has been given to the court under sub-section (3) of Section 6 of the Old Act to fix the standard rent for the similar premises in the same locality. Section 6(2) of the Old Act was a check on the remaining sub-sections of Section 6, but by striking down this provision, there is no check on the remaining provisions whereby the landlords started filing suits for enhancement of the rent throughout the Rajasthan demanding exorbitant high rates, as the provisions of the Section became unbriddled and tenants were compelled to vacate the premises. 19. The New Act was passed in 2001 but it came into force in April, 2003, therefore, between 31.3.1999 i.e. after striking down the Old Act in Khem Chand's case (supra) and till the applicability of the New Act on 1.4.2003, large number of suits -16- for increase of rent at exorbitant rate were filed and likewise the provisional rent under Section 7 of the Old Act was also fixed at abnormal high rates. Whereas in the New Act, the premises which were let out prior to 1.1.1950 have been treated to have been let out on that day and an annual increase of 5% has been provided which is revisable after every ten years. This is a just, reasonable & fair criteria & to put check on monopoly by landlords in increasing rent. 20.. Learned counsel has also cited certain examples as to how the rents were claimed in between this period and the Civil Courts passed the orders. Some of the examples are as follows: “(1) Raj kumar (Writ Petition No.5842/2004) Shop in question was taken on rent in Bhadwa Samvat Year 2043 at the rate of Rs.550/- pm. The landlord filed suit under Section 6 ofthe Old Act in May 2001 and claimed rent at thereate of Rs.8000/- per month. The Trial Court passed the decree for Rs.8000/-. As per Rent Act of 2001, rent in May 2001 will be Rs.1031/- (2) Pritam Singh (Writ Petitions No.3356/2004 and 5604/2004) House in question was taken on rent on 4th July, 1975 at the rate of Rs.555/- pm. The landlord filed a suit under Section 6 of the Old Act in July 2000 and claimed rent at the rate of Rs.30,000/- per month. As per Rent Act of 2001, rent in July 2000 will be Rs.1550/-. (3) Girdhari Lal (Writ Petition No.2014/2005) -17- Shop in question was taken on rent in 1984 at the rate of Rs.350/- per month. The landlord filed an eviction suit on 29.07.1994. The Trial Court determined interim rent at the rate of Rs.600/- per month under Section 13(3) on 19.05.1997. The landlord filed suit under Section 6 of the Old Act in September 2000 and claimed rent at Rs.8000/- pm. In this suit, the learned Trial Court determined provisional rent Rs.4000/- on 31.10.2004. As per Rent Act of 2001, rent in September 2000 will be Rs.605/-. (4) Jugal Kishore (Writ Petition No.4773/2004) Shop in question was taken on rent on 1.3.1987 at the rate of Rs.811/- per month with the stipulation that after five years, rent will be increased by 10%. The landlord filed suit under Section 6 of the Old Act in September, 1999 and claimed rent at the rate of Rs.12,000/- per month. As per Rent Act of 2001, rent in September, 1999 will be Rs.1304/-. (5) Jugal Kishore (Writ Petition No.2159/2006) Shop in question was taken on rent on 1.7.1994 at the rate of Rs.900/- per month with the stipulation that after three years, rent will be increased by 15%. The landlord filed suit under Section 6 of the Old Act in September, 1999 and claimed rent at the rate of Rs.12,000/- per month. As per Rent Act of 2001, rent in September, 1999 will be Rs.1125/-.” 21. It