Case: Raghunath Gopal Manjire &amp; Anr Vs. The Competent Authority &amp; Ors

In the year 1946 the Government of India drew up a Scheme for construction of houses for industrial workers an d to let them out to them at a subsidised rent. The then State of Bombay (now Maharashtra) passed Bombay Housing Board Act, 1948-hereinafter to be referred to as the Act, to, provide for measures to be taken to deal with and satisfy the need of housing accommodation. In accordance with section 3, the Maharashtra Housing Board, a Statutory corporate body was constituted. Chapter III of the Act provided for the making of the housing schemes by the Board in accordance with the provisions of the Act and subject to the control of the State Government. Elaborate machinery was provided for the framing and the implementation of the schemes. Section 66 empowered the State Government to make rules for carrying out the purposes of the Act . Subject to the overall control and power of the State Government as provided for in sub-section (2) of section 67, sub-section (1) thereof states:"The Board may from time to time, with the previous sanction of the State Government, make regulations consistent with this Act and with any rules made under this Act-      (a) for the management and use of buildings constructed under any housing scheme;      (b) the principles to be followed in allotment of tenements and premises;      (c) the remuneration and conditions of service of the Housing Commissioner and other officers and servants of the Board under section 13;(d) for regulating its procedure and the disposal of its business."The Board was also empowered to make bye-laws under section 68. We shall not be concerned in this case with the Bombay Housing Board Rules, 1949 framed by the State Government. But the relevant Regulations framed by the Board will have to be referred to.At the outset we may state the necessary facts in relation to the two appellants-Shri R. C. Manjire and Shri A. L. Raghavan Nair, appellants 1 and 2 respectively. Although the said two appellants had purported to file the writ petition and the writ appeal in the High Court on behalf of themselves and other industrial worker tenant, -, of the Board residing in Tilak Nagar, Chembur, Bombay, and they purported to follow up the matter by filing the special leave petition in a representative capacity the appeal was, however, argued, as it appears, due to non-compliance of some stay order passed by this Court by the other workers, as if it was an appeal by the said two appellants only.      Any way that will not be of any material consequence because our decision in this appeal, obviously, will govern the rights and liabilities of the other industrial workers similarly situated.The first appellant who was an industrial worker employed with Premier Automobiles Ltd., Kurla was allotted tenement No. 54/1916 as per the tenancy agreement dated the 19th January, 1959. executed in Form II appended to the Regulations. The subsidised rent fixed was Rs. 27/- per month plus the monthly service charges of Rs. 6/-. Similarly appellant no. 2 who was an industrial worker employed with India n Rare Earths Limited was allotted tenement no. 26/921 in Tilak Nagar at the same subsidised rent of Rs. 27/- per month plus the monthly service charges of Rs. 7.50. The allotment to him was also made sometime in the year 1959 on the basis of a similar agreement. Such allotments are said to have been made in respect of about 4, 000 tenants.A notice dated the 10th of October, 1972 was given to appellant no. 2 by the Board stating therein:"Tenements constructed under the Subsidised Industrial Housing Scheme are allotted to the Industrial Worker whose monthly income does not exceed Rs. 350/- on payment of subsidised rent only. Those who have crossed the wage limit of Rs. 350/- p.m. subsequently are not entitled to retain the tenements, nor are they entitled to get subsidy in rent. The question of eviction of workers who had crossed the prescribed wage limit of Rs. 350/- p.m. has been considered sympathetically and the Government have been pleased to order that such tenants who have exceeded wage limit of Rs.350/- should be allowed to retain the tenements by charging them graded increase w.e.f. 20.4.66 as; under:-      1) Wage group of workers between 40% of the interest charges Rs.1 /- to Rs. 425/- p.m. on the subsidy for construction of the house.      2)Wage group of workers between 80% do Rs. 426/- to Rs. 5001- p.m.      (3) Persons who are exceeding the limit of Rs. 5001shall be charged full economic rent.      (4) In partial modification of the above, the Government have been pleased to charge w.e.f. 26.11..59 50% of the interest charges on the subsidy for construction of the house from industrial worker tenants whose monthly/income is in the range of Rs.- to Rs.500/-.      (5) On enquiry from your employers M/s Indian Rare Earths )Ltd. it is learnt that your income exceeded Rs.- p.m. w.e.f. 1.11.67. You are as such allowed to avail the concession to pay the subsidised rent for 3 months from that date, and you are liable to be charged graded rent from 1.2.68.      In view of the above orders of the Government, you have been :assessed graded rent/economic rent as detailed below -1.Income between Rs.- to Rs. 4-25/- from = Rs. 48.00      1.2.68to 30-4.69 @ 40% i. e. Rs. 3.20 p.m.      2.Income between Rs. 425/- and 500 from Rs. = 32.00      1.5.69to 30.9.69 @ 80% i.e. Rs. 6.40 p.m.      3. Income between above Rs. 500/- from 1-10-69 to 30-6-72      (D iff, between as per standard E.C.      dt. 6-12-71 and eco. rent      23.11.71@, 50% 27.02= Rs. 891-66      Total Rs. 971.66      The total amount thus payable by you for the period from 1.2.68 to 30.6.72 works out to Rs. 971.6 6; you are requested to pay the above arrears within 10 days from the date of issue of this letter.      You are further advised to start paying rent from 1.7.72 onward at increased rate of Rs. 55.68 p.m. inclusive of ser- vice charges as your monthly income is in the range of Rs.- to 425, 426 to Rs. 5001- and above Rs. 500/- p.m. If you fail to pay the increased amount as intimated, it will be presumed that you are not accepting the, increase and are not interested to retain the tenement and further action as permissible will be pursued to effect the recovery of amount and to take vacant possession of the tenement from you."A similar notice dated the 30th January, 1973 was given to appellant no. 1 stating therein that in his case the income limit had exceeded prior to 20.4.66 and he was liable to be charged graded rent w.e.f. that date. Accordingly arrears of rent to the time of Rs. 2, 154, 91 were demanded from him for the period 20.4.66 to 31.12.72 and he was asked to pay on and from 1st of January, 73 an increased rate of rent of Rs. 56.26 per month inclusive of service charges.The appellants filed a writ petition in the High Court challenging the enhanced demand of rent from them both for the past and the future periods. Their writ petition was dismissed by a learned Single Judge of the High Court and their writ appeal failed before the Division. Bench in view of another Division Bench decision of the High Court given a few months earlier in an identical matter in the case of some other industrial workers. Hence this appeal in which the only question to be decided is about the demand for the arrears of enhanced rent.

Court's reasoning:
The High Court has taken the view that the Regulations are not statutory Regulations and have not the force as such. But this seems to be contrary to the decision of this Court in Sukhdev Singh &Ors. v. Bhagatram Sardar Singh Raghuvanshi and anr([1975] 3 S.C.R. 619.) For the decision of the point at issue, however, it will not make any difference. No Regulation clearly provides the effect of crossing the maximum limit of family income. As per Regulation 4 tenements in class (i) or in class (ii) can be let out at such subsidised rents as Government may by special orders fix or at the economic rent calculated in accordance with the formula decided b y Government from time to time. Different subsidised rents, reducing or enhancing the amount of subsidy can be fixed by the Government from time to time. But one thing is clear, even in absence of any specific Regulation in that regard, that o n the crossing of the maximum wage limit, the industrial worker shall not be entitled to continue in the tenement let out to him on the subsidised rent fixed on the basis of the income limit as per Regulation 7. Out of the consequences mentioned hereinafter, either one or the other may follow. He may cease to be a tenant unless and until the tenement is allotted to, him on the basis of the increased wage limit or he may be liable to pay the economic rent or full economic rent on the crossing of the wage limit. Even assuming that this result does not automatically follow, on the general principles of law in absence of a clear Regulation being there, the tenancy could be terminated by one months notice as per clause (17) of the agreement. The terms of the agreement and the undertaking are also ambiguous and not clear enough to entitle the Board to claim enhanced rent from an industrial worker on his crossing the particular wage limit. The term s are capable of an interpretation which may be favourable either to the Board or to the industrial worker. The High Court has interpreted them in favour of the former Although we are not prepared to say that the interpretation) put b y the High Court is necessarily wrong, because of the ambiguity of the, language, as we shall presently show, we do not propose to rest our JUDGMENT on such interpretation of the terms only. Clause (2) of the agreement is concerned with increase in the monthly rent and other charges as the Board may consider fit or expedient to impose "on account of any increase in such rates, taxes cesses or other service charges or an account of any additions and/or alterations to or any conveniences provided at the said premises or the building in which the same are situate." The said clause does not cover a case of increase of rent by reduction of subsidy on the ground of increase in the wage limit. Clause (18-A) provides that the tenancy shall cease as km as the tenant ceases to be an industrial worker. But then clause, (18-B)requires him to give certain information including a detailed information about his total monthly family income. The purpose of this requirement obviously is to find out whether a particular industrial worker has crossed the wage limit, if so, when Yet, as a follow up action, no clear clause is to be found in the agreement providing for reduction of subsidy and increase of rent on the crossing of a particular wage limit.Similarly the phraseology of the undertaking which we have extracted above is also too vague and ambiguous to enable us to say that that by itself can undoubtedly lead to the conclusion t hat the Board could enhance the rent on the crossing of the wage limit by an industrial worker. It is no doubt true that the undertaking mentions that the rent fixed was provisional and that the worker under took to pay the rent and service charges as may from time to time be levied and fixed by and on behalf of the Board. But in the sentence following the said words the use of the expression "date of allotment" created the difficulty in our straightaway accepting the interpretation put by the High Court as correct. It appears to us that the wordings in the undertaking are capable of the meaning that the subsidised rent originally fixed was a provisional one. It could be increased and enhanced by the Boa rd even from the date of allotment and the industrial worker would be liable to pay the same. But we remained curious to know as to why a clear provision was not made either in the Regulations or in the agreement and the undertaking to say, as obviously it could be done, as to what will be the consequences which would follow when an industrial worker crossed the maximum wage limitIt is manifest that the directions given by the State Government in their letter dated the 8th July, 1967 would be squarely covered by the provision of law aforesaid and the Board was obliged to comply with it. The direction was in no sense either contrary to the Regulations or to the terms of the agreement and the undertaking. On the other hand, it was for the purpose of removing the ambiguity which -, ad remained in them. It was quite fair and reasonable to reduce the subsidy and demand the enhanced or the economic rent, is the case may be, on the crossing of a particular wage limit. Appellant no. 1 had crossed that wage limit before the 20th of April, 1966. Demand of enhanced rent on and from that date was in no way contrary to the law, the Regulations and the terms of the agreement and the undertaking. It was within the power of the State Government to give the direction charging the enhanced rent from a back period as and when the maximum wage limit bad been crossed by a particular industrial worker, of course, giving him the concession of three months period.Mr. Sanghis contention that no demand for enhanced rent or economic rent in respect of a period prior to the giving to the notice could be mad e is not sound and hence not acceptable to us. It must be emphasised, as we have already indicated above, that the industrial, worker was not entitled to insist to continue in the tenancy on a particular subsidized confessional rate of rent which had been initially fixed on the basis of his being below the wage limit of Rs.- per month in relation to his family income.