Case: M/S Punjab Tin Supply Co., Chandigarh Etc. Etc Vs. The Central Government &amp; Ors

For a proper appreciation of the rival contentions of the parties, it is necessary to refer briefly to the history of the relevant provisions of law. The area now known as the Union Territory of Chandigarh was a part of the State of Punjab as it existed prior to the coming into force of the Punjab Reorganization Act. 1966 (Act 31 of 1966). With effect from November 1, 1966 i.e. the appointed day under section 4 of the said Act the Union Territory of Chandigarh came into existence and thereupon the said area ceased to from part of the erst while State of Punjab. Section 87 of the Punjab Reorganization Act, 1966 conferred power on the Central Government to extend by notification with such restrictions or modifications as it thought fit any enactment which was in force in a State at the date of the notification to the Union Territory of Chandigarh. Whereas section 88 of that Act provided for the territorial extent of laws, section 89 dealt with the power to adapt laws, with the object of providing as far as possible for the continuity of laws in force in the several parts of the erstwhile State of Punjab in the successor States namely the States of Punjab and Haryana and the Union Territory of Chandigarh.The Act i.e. the East Punjab Urban Restriction Act, 1949 was a law which had been enacted before the commencement of the Constitution and continued to be in operation even after the commencement of the Constitution in the erstwhile State of Punjab by virtue of the provisions of the Constitution. But the Act had not been brought into force in the area constituting the Union Territory of Chandigarh by the State Government of the erstwhile State of Punjab. By the Notification No. 13/1/66-CHD dated November 1, 1966 issued by the Government of India, Ministry of Home Affairs, the President authorised the Administrator of the Union Territory of Chandigarh i.e. the Chief Commissioner thereof, in relation to the said territory to exercise and discharge with effect from November 1, 1966 the powers and functions of the State Government under any such law. On the basis of the above notification and other relevant provisions of law and notifications which had been issued from time to time to which a detailed reference is not necessary, the Chief Commissioner issued a notification bringing the Act into force in the Union Territory of Chandigarh with certain modifications with effect from November 4, 1972. The validity of the said notification was challenged before the High Court of Pun jab and Haryana. The High Court quashed the said notification by its judgment dated October 9, 1974 holding that the Act had not been effectively brought into force in the Union Territory of Chandigarh by virtue of that notification (vide Dr. Harkishan Singh v. Union of India &Ors).(1) It is not necessary to deal with the reasons given by the High Court in support of its judgment since the legal infirmities pointed out by the High Court were set right by the Parliament by the enactment of the East Punjab Urban Rent Restriction Act (Extension of Chandigarh) Act, 1974 (Act 54 of 1974) (hereinafter referred to as the Extension Act) the relevant part of which reads asThis Act may be called the East Punjab Urban Rent Restriction Act (Extension to Chandigarh) Act, 1974.2. In this Act, "The Act" means the East Punjab Urban Rent Restriction Act, 1949 as it extended to, and was in force, in certain areas in the pre-reorganisation State of Punjab (being areas which were administered by municipal committees, cantonment boards, town committees or notified area committees or area notified as urban areas for the purposes of that Act) immediately before the 1st day of November, 1966.3. Notwithstanding anything contained in any judgment, decree or order of any court, the Act shall subject to the modifications specified in the Schedule be in force in and be deemed to have been in force with effect from the 4th day of November, 1972 in the Union Territory of Chandigarh as if the provisions of the Act as so modified had been included in and formed part, of this section and as if this section had been in force at all material times.4. (1) Notwithstanding anything contained in any judgment, decrees or order of any court, anything done or any action taken (including any notification or direction issued or rents fixed or permission granted order made) or purported to have been done or taken under the Act shall be deemed to be as valid and effective as if the provisions of this Act had been in force at all material times when such thing was done or such action was taken.(2) Nothing in this Act shall render any person guilty of any offence for any contravention of the provisions of the Act which occurred before the commencement of this Act.THE SCHEDULE(See Section 3)Modifications in the Act1. Throughout the Act, for "State Government" substitute "Central Government".2. Section 1, for sub-sections (2) and (3), substitute "(2) It extends to all the urban areas in the Union Territory of Chandigarh".3. Section 2.-(i) after clause (d), insert-(dd) "Notification" means a notification published in the O fficial Gazettee".(ii) for clause (j), substitute-(j) "urban area" means the area comprised in Chandigarh as defined in Clause (d) of Section 2 of the Capital of Punjab (Development and Regulation) Act, 1952 and includes such other area comprised in the Union Territory of Chandigarh as the Central Government may, having regard to the density of the population and the nature and extent of the accommodation available therein and other relevant factors, declare by notification to be urban for the purposes of this Act."4. For Section 20, substitute-"20. (1) The Central Government may by notification make rules, for the purpose of carrying out all or any of the provisions of this Act.(2) Every rule made under this Section shall be laid as soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty day s which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect, only in such modified form or be of no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under thatin exercise of the powers conferred by section 3 of the Act the Chief Commissioner published a notification dated January 31, 1973 exempting the buildings referred to therein from the operation of the Act. It reads:-"No. 352-LD-73/602 dated January 31, 1973. In exercise of the powers conferred by section 3 of the East Punjab Urban Rent Restriction Act, 1949 (Punjab Act No. III of 1949), as applicable to the Union Territory of Chandigarh, the Chief Commissioner, Chandigarh, is pleased to direct that the provisions of the said Act shall not apply to buildings, constructed in the urban area of Chandigarh, for a period of five years with effect from the date the sewerage connection is granted in respect of such buildings by the competent authority under rule 112 of the Punjab Capital (Development and Regulation) Building Rules, 1952."This was followed by the issue of another notification dated September 24, 1973 which is as follows:-"No. 2294-LD-73/3474 -In partial modification of Chandigarh Administration, Home Department/Notification No. 532-LD-73/602 dated the 31st January, 1973, the Chief Commissioner, Chandigarh is pleased to direct that the period of five years exemption shall be computed as under:(a) Where sewerage connection can be given, from the date such connection is granted by the competent authority;(b) Where sewerage connection cannot be granted, as for instance, in the case of booths, from the date electric connection is first given by the competent authority.(c) In case not covered in categories (a) or (b) above from the date the building is actually occupied."Again on June 11, 1982 a further notification was issued as follows:"No. LD-82/10.11.- In partial modification of Chandigarh Administration, Home Department Notification No. 352-LD-73/602 dated the 31st January, 1973 read with Chandigarh Administration Home Department Notification No. 2294-LD-73/3474, dated the 24th September, 1973 and in exercise of the powers conferred by section 3 of the East Punjab Urban Rent Restriction Act, 1949 as applicable to the Union Territory of Chandigarh, the Chief Commissioner, Chandigarh is pleased to direct that the period of 5 years exemption shall be computed in the manner indicated below:(a) Where sewerage connection can be given, from the date such connection is granted by the competent authority;(b) Where sewerage connection cannot be granted, as for instance, in the case of booths, from the date electric connection is first given by t he competent authority;(c) Where sewerage connection has already been given and new building is constructed in addition to or over and above the existing building and has been separately let out, from the date new building is actually occupied;(d) In cases not covered in categories above, from the date the building is actually occupied."On September 24, 1974, the Chief Commissioner had issued earlier another notification which read thus:"No. 3205-LD-74/3614.In exercise of the powers conferred by section 3 of the East Punjab Urban Rent Restriction Act, 1949 as applicable to the Union Territory of Chandigarh, the Chief Commissioner, Chandigarh is pleased to direct that the provisions of Section 13 of the said Act shall not apply to buildings, exempted from the provisions of the Act for a period of five years vide Chandigarh Administration Notification No. 352-LD-73/602 dated the 31st January, 1973 in respect of decrees passed by Civil Courts in suits for ejectment of tenants in possession of these buildings instituted by the landlords against such tenants during the period of exemption whether such decrees were or are passed during the period of exemption or at any timeExtension Act merely brought into force with effect from November 4, 1972, the Act which was an Act in force in the former State of Punjab with the modifications set out in its Schedule in the Union Territory of Chandigarh and validated all actions taken, notifications issued and orders made or purported to have been taken issued or made under the Act . Having done that it withdrew from the scene. Thereafter the Act as modified by the Extension Act alone has to be looked into to consider its effect on the Union Territory of Chandigarh. As observed by this Court in Rajputana Mining Agencies Ltd. v. Union of India &Anr.(1) there is neither precedent nor warrant for the assumption that when one Act applies another Act to some territory, the latter Act must be taken to be incorporated in the former Act. It may be otherwise, if there were words to show that the earlier Act is to be deemed to be reenacted by the new Act. The Act in the instant case was only extended but not re-enacted. We should, therefore, proceed on the assumption that the Act itself with the amendments was in force with effect from November 4, 1972 in the Union Territory of Chandigarh. Every building that was in existence on that day and which was constructed thereafter came to be governed by the Act as amended by the Extension Act. It was on January 31, 1973 that the Chief Commissioner issued-the notification under section 3 of the Act exempting a certain class of buildings namely new buildings for a period of five years calculated from the relevant date applicable to them. Section 3 of the Act as amended by the Extension Act readsThe Central Government may direct that all or any of the provisions of this Act shall not apply to any particular building or rented land or any class of buildings or rentednotification dated January 31, 1973 and the other notifications modifying it are already set out above.

Court's reasoning:
In these cases the document which has got to be construed is a notification issued under section 3 of the Act by the Chief Commissioner who is only a delegate of the Legislature. It is to be noted that there is no dispute that as soon as the A ct came into force on November 4, 1972 all the buildings which had been constructed prior to that date came within the scope of the Act. The Act also applied to all the buildings which were constructed thereafter and before January 31, 1973 on which date the notification was issued. The point for consideration is whether on the issue of the notification on January 31, 1973 any such building to which the Act already applied was taken out of the operation of the Act. A reading of the notification does not clearly indicate that the Chief Commissioner intended to grant exemption in respect of any of the buildings constructed prior to January 31, 1973. While the words buildings constructed in the urban area of Chandigarh for a period of five years with effect from the date the sewerage connection is granted which are found in the notification refer to all the buildings to which sewerage connection is granted after the date of the notification, they do not necessarily mean and include buildings which had been given sewerage connection within five years prior to that date. There was also no compelling reason for giving exemption to buildings which had already been constructed as the object of issuing the notification as mentioned earlier was only to encourage construction of new buildings thereafter and not to take away the statutory protection already extended to the tenants of buildings which had come into existence prior to January 31, 1973. The landlords of these buildings have, however, relied upon the decision of this Court in Om Prakash Gupta v. Dig Vajendrapal Gupta(1) in support of their contention. In that case, the Court had to construe the provisions of sub- section (2) of section 2 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (U.P. Act 13 of 1972), the relevant part of which readas provided in sub-section (5) of section 12, sub-section (1-A) of sect ion 21, sub-section (2) of section 24, sections 24-A, 24-B, 24-C or sub-section (3) of section 29, nothing in this Act shall apply to a building during a period of ten years from the date on which its construction isxxx xxxExplanation 1.-For the purposes of this sub-section, - (a) the construction of a building shall be deemed to have been completed on the date on which the completion thereof is re ported to or otherwise recorded by the local authority having jurisdiction, and in the case of a building subject to assessment, the date on which the first assessment thereof comes into effect, and where the said dates are different, the earliest of the said dates, and in the absence of any such report, record or assessment, the date on which it is actually occupied (not including occupation merely for the purposes of supervising the construction or guarding the building under construction) for the firstthe above case, the Court held that the aforesaid provision had retrospective effect and applied to buildings constructed prior to the date on which the said Act came into force provided they satisfied the conditions mentionedabove provision appears as part of section 2 of the U.P. Act referred to above which exempted many existing and future buildings which satisfied the conditions refer red to in clauses (a) to (f) of sub-section (1), sub-section (2) and sub-section (3) thereof. The said exemption was given by the statute itself. It may be stated here that at the instance of one of the parties to the Special Leave Petition (Civil) No. 3573 of 1979 (Suresh Chand v. Gulam Chisti) which was disposed of by the same judgment, a review of the above judgment has been granted and by an order made on October 7, 1983 the case is directed to be reheard. Moreover on the construct ion of the above provision, there are two earlier decisions-one in Ratan Lal Shinghal v. Smt. Murti Devi(1) decided on August 21, 1979 in which it is held that the said provision has no retrospective effect but is only prospective in operation and another in Shri Ram Saroop Rai v. Smt. Lilavati(2) decided on May 7, 1980 in which a contrary view is taken. Section 2 of the said U.P. Act requires to be considered in the setting in which it appears. We are of the view that any decision on that provision has to be confined to that provision and cannot be extended to the present case by analogy.There is one other distinction which is sought to be made between an exemption granted by a notification which is issued by a delegate of the Legislature who is not given power by the Legislature to issue a notification having retrospective effect and an exemption granted by the Legislature itself on the basis of the observations made in Strawboard Manufacturing Co. Ltd. v. Gupta Mill Workers Union, Dr. Indramani Pyarelal Gupta v. W. R. Nathu &Ors. and Income-tax Officer, Alleppey v. M.C. Ponnooseis not necessary to deal with the above point any further since we are of the view that the notification impugned in these cases stands by itself and it is not to be construed in the background of the provisions of section 2 of the U.P. Act referred toa careful consideration of the question we feel that the benefit of the notification cannot be extended to buildings which were given the sewerage connection or electric connection or which were occupied, as the case may be, prior to January 31, 1973. Those buildings are governed by the provisions of the Act and any decrees passed in respect of them are governed by section 13 of the Act. The notification applies only to those buildings which are given sewerage connection or electric connection or which are occupied, as the case may be, on or after January 31, 1973.