Case: M.L. Manchanda &amp; Ors Vs. Union Territory Of Chandigarh &amp; Ors

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 Rule 4 of the Rules as originally made ran as(1) Two-roomed tenements shall be allotted to industrial workers whose income exceeds Rs. 100 per mensem.(2) One-roomed tenements shall be allotted to workers with an income not exceeding Rs, 100 per mensem."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 forTwo roomed tenements shah be allotted to industrial workers whose income does not exceed Rs. 350.00 per mensem.(2) One roomed/small two roomed tenements shall be allotted to workers with an income not exceeding Rs. 250.00 per mensem; provided that where sufficient number of industrial workers with income exceeding Rs. 250.00 per mensem is not forthcoming for allotment, the Labour Commissioner may, with the approval of the State Government, allot two roomed tenements to industrial workers with an income not exceeding Rs. 250.00 per mensem.Notes: In towns, where only roomed/small two roomed tenements have been built, applications should first be invited from such workers only, whose monthly income does not exceed Rs. 250.00. It is only after the demand from these workers has been met that unallotted tenements should be made available for allotment to workers, whose income exceed Rs. 250.00 per mensem. Where these tenements are given to higher paid workers the normal subsidised 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 roomed/small two roomed tenements a worker crosses the wage limit of Rs. 250.00 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. 251.00 and Rs. 350. 00 perNotification No. 7480-4H(8)-72/21542 dated November 7, 1972, the Chief Commissioner, Union Territory, Chandigarh, 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 following, , after sub rule (2) in Rule 4 of theAn 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 Housing (Chandigarh First Amendment) Rules, 1972, his allotment shall be cancelled by the Labour Commissioner after giving him one months notice in writing of such cancellation.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 thatappellants 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 cove red 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 .. 74804H(8)-72/21542 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 Articles 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. 7480-4H(8)-72/21542 dated November 7, 1972 amending Rule 4 of the Rul es and restraining respondents 1 and 2 from proceeding 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 definition of "industrial worker as contained in section 2(e) of the Act within the scope of which they admittedly fell. The High Court repelled their contention a nd 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.

Court's reasoning:
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 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 to be entitled to occupy the accommodation by reason of cancellation of the allotment under subsection (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 fulfill 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 9(2) 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 occupation becomes un-authorised on any one of the grounds laid down in section 7 of the Act. We are, therefore, satisfied 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. Ramamurthy 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. 974.71 and Rs. 1861.27 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 4(3) 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 immediately before the amendment of the Punjab Industrial Housing (Chandigarh First Amendment) Rules, 1972. It unequivocally 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 months notice in writing. The proviso therefore 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 months notice in writing o f the cancellation. The second contention raised by Mr. Ramamurthi is also, therefore,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, 1975 promulgated under clause (1) of Art. 35 9 of the Constitution 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.