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Gyan Prakash Gupta Vs. State of Mysore by Its Chief Secretary Vidhana Soudha Bangalore and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy;Constitution
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. Nos. 800 of 1964 and 971 and 972 of 1966
Judge
Reported inAIR1968Kant61; AIR1968Mys61; ILR1967KAR64
ActsMysore Rent Control Act, 1961 - Sections 3; Constitution of India - Articles 14 and 19(6)
AppellantGyan Prakash Gupta
RespondentState of Mysore by Its Chief Secretary Vidhana Soudha Bangalore and anr.
Excerpt:
- labour & services. dismissal from service: [subhash b. adi, j] dispensation of disciplinary enquiry - electricity (supply) act (54 of 1948) section 79 and karnataka electricity board employees (conduct, discipline, control & appeal) regulations, 1987, regulation 14 petitioner alleged to have been involved in theft - criminal complaint also lodged in this regard - however, based on same evidence criminal court held that charge of theft is not proved and also recovery is not proved by prosecution - disciplinary authority relying upon admission of criminal charge by petitioner before investigation officer and in charge sheet, passing order of dismissal held, not proper, particularly, when enquiry was dispensed with and petitioner had no opportunity before disciplinary authority. further,.....sadasivayya, j.(1) these writ petitions are directed against the validity of part vi of the mysore rent control act, 1961 (hereinafter referred to as the act). part vi pertains to hotels and lodging-houses. it provides for the fixation of fair rates for board, lodging and other services given in hotels or lodging-houses; there are also provisions regulating the eviction of lodgers. the petitioner in writ petition no. 800 of 1964 is the proprietor of a lodging cum-boarding-house in bangalore, doing business under the name and style of bombay ananda bhavan. the petitioner in w. p. no. 971 of 1966 is the proprietor of a hotel called shilton's hotel, which provides facilities for the lodging of 65 persons and for their boarding. the petitioner in w. p. no. 972 of 1966 is a partner of a hotel.....
Judgment:

Sadasivayya, J.

(1) These writ petitions are directed against the validity of Part VI of the Mysore Rent Control Act, 1961 (hereinafter referred to as the Act). Part VI pertains to hotels and lodging-houses. It provides for the fixation of fair rates for board, lodging and other services given in hotels or lodging-houses; there are also provisions regulating the eviction of lodgers. The petitioner in Writ Petition No. 800 of 1964 is the proprietor of a lodging cum-boarding-house in Bangalore, doing business under the name and style of Bombay Ananda Bhavan. The petitioner in W. P. No. 971 of 1966 is the Proprietor of a hotel called Shilton's hotel, which provides facilities for the lodging of 65 persons and for their boarding. The petitioner in W. P. No. 972 of 1966 is a partner of a hotel called Lobo's hotel which provides facilities for the lodging and boarding of 38 persons. In these three writ petitions, the petitioners pray for a declaration that the provisions of Part VI of the Act are void as offending the provisions of the Constitution; they also pray for an order restraining the respondent-State and its officers (appointed under the provisions of Part VI) from enforcing those provisions.

(2) Mr. Suryanarayanan, the learned Advocate who appeared for the petitioner in W. P. No. 800 of 1964 commenced his attack against the provisions of Part VI of the Act by pointing out that except for the definition in Section 3(b), there was no provision for the appointment of a competent authority. This, according to him, was a lacuna in the Act. The attack against the provisions of Part VI was based on four main grounds: The first ground was of a general nature and was to the effect that the provisions of this part are had because of arbitrary delegation of legislative power to the competent authority who is an executive officer. The second is that this part suffers from invalidity as infringing Article 14, in a two-fold manner, (a) because of there being a wide area of arbitrary power in the competence authority to discriminate inter se as between one hotel and another, and (b) because of restaurants being left out of the operation of this part. The third ground is that the restrictions imposed by this part on persons carrying on the business of running hotels and lodging houses are unreasonable and are not in interests of general public and that they fall outside Article 19(6) of the Constitution and are, therefore, illegal. Lastly, it is urged that certain sections in this part, namely, Sections 32, 37 and 39 are liable to be struck down as they enable the competent authority to exercise arbitrary and discriminatory power offensive to Article 14 of the Constitution.

Mr. M. Sundar Raj who appears for respondent 2, the All-Mysore Hotels Association (who are interveners), adopts the arguments of Mr. Suryanarayanan. Mr. Jayaram, the learned Advocate who appears for the petitioners in W. P. Nos. 971 and 972 of 1966, while adopting the arguments of Mr. Suryanarayan, has argued with particular reference to the effect of certain sections on the type of business carried on by the petitioners in W. Ps. Nos. 971 and 972 of 1966.

(3) Before proceeding to consider in detail, the main contentions of the learned Advocates for the petitioners, it would be convenient to dispose of the argument that there is a lacuna in the Act, because there is no independent provision for the appointment of the competent authority. The definition in Section 3(b) of the Act is as follows:-

'(b) 'Competent authority' means any officer authorised by the State Government by notification to perform the functions of the competent authority under Part VI of this Act;'. It will be noticed that it is implicit in this definition that the State Government has the power to authorise by notification, any officer to perform the functions of the competent authority under Part VI of the Act. A definition of this type renders it unnecessary for provision being independently made for the appointment of the competent authority. After all, it is merely a question of drafting. As already stated, when it is implicit in this definition that the State Government has power to authorise any officer by notification to perform the functions under Part VI, it is unnecessary to provide any independent section, specifically for the appointment of an officer, for that purpose. In these circumstances, we are unable to accept the argument that in this matter, there is a lacuna in the Act.

(4) Before commencing his attack on particular sections in Part VI, Mr. Suryanarayana stressed the fact that the occupation followed by the petitioners is of a normal kind and that this fact should be borne in mind in determining whether the restrictions imposed by the provisions of Part VI are reasonable ones for the purpose of clause (6) of Article 19 of the Constitution. It was stated that in the case of professions or occupations which were not of the ordinary kind but involved some risk to the safety and health of the public, even severe restrictions might be considered reasonable, which, when applied to harmless and normal occupations, might not be considered to be reasonable. It is against such a background, that he wanted his contentions to be considered as regards the restrictions imposed by the provisions in Part VI.

It was also sought to be contended, generally, that the restrictions imposed in Part VI are not in the interests of the general public. So far as this contention is concerned, it would be convenient to deal with it, at this stage alone. Hotels or lodging-houses are places where lodgings are provided to the members of the public, whether with or without board. The present conditions in urban areas are such that there is acute scarcity of lodging accommodation, there being a very great demand for the same. Consequently, the situations is such that it affords scope for unreasonable exploitation of the public by persons running hotels and lodging-houses and for that purpose imposes restrictions, it cannot be said that the imposition of such restrictions is not in the interests of the general public. The legislature is the appropriate authority to consider whether such regulation by law is necessary. It is seen from the preamble portion of the Act that the legislature has found it expedient, (amongst other things), to control rate of hotels and lodging houses. The provisions in Part VI have been enacted with a view to regulate matters pertaining to lodging in hotels and lodging-houses, the rates for services rendered therein, the eviction of lodgers and other incidental matters. Such regulation being necessary in the interests of the general public, it would be futile to contend that any restrictions imposed by the law to make effective such a regulation, are not in the interests of the general public. Therefore, this contention fails.

(5) Section 32 has been attacked on a number of grounds;--

(a) It is stated that sub-section (1) is not directed to any specified class or category of hotels or lodging-houses, but that power has been given to the competent authority to fix a fair rate in regard to any hotel or lodging-house, as that authority may choose; it is argued that there is conferment of arbitrary power in the matter of choice by the competent authority.

(b) That in sub-sections (1), (2) and (3) there is no guidance given or principles set out according to which fair rate can be fixed by the competent authority. It is contended that this is a matter which is left to the subjective satisfaction of the competent authority and that it is bad as the law does not give any guidance as to the exercise of the delegated power.

(c) It is similarly contended in regard to sub-section (4) that the law does not contain any guidance or principle according to which the competent authority can fix the number of lodgers to be accommodated in each room and that, therefore, the power given to the competent authority under this sub-section is bad. According to the proviso to this sub-section, the members of a lodgers family can be accommodated in his room, even though their number may be in excess of that fixed for that room under sub-section (4). Sub-section(3) of Section 39 provides penalty in the event of the manager of a hotel or the owner of a lodging house accommodating a number of lodgers in any room, in excess of the number fixed under sub-section (4) of Section 32. It is argued that the proviso to sub-section (4) of Section 32 and sub-section (3) of Section 39 read together constitute an unreasonable restriction, inasmuch as they expose the manager of a hotel or the owner of a lodging-house to prosecution even when he has been misled to provide accommodation to a number in excess of that fixed, on a false representation that they are all members of the lodger's family.

We will now proceed to deal with each one of the above contentions in regard to Section 32. So far as the attack falling under (a) above is concerned, it cannot be disputed that there may be a number of matters in which one hotel differs from another hotel, and one lodging-house differs from another lodging house. For example, differences may arise on account of the situation or on account of the services rendered. While one hotel may be charging reasonable rates for lodging and other services rendered, another hotel may not be doing so. The fixation of fair rate may be necessitated by the conditions prevailing in particular hotels and lodging-houses. Therefore, it may be very difficult to put all hotels and lodging-houses into water-tight categories. While there is necessity for the conferment of the power to fix fair rate, it may not be possible to categorise the particular hotel and lodging-houses in respect of which that power has to be exercised. Therefore, it is a matter which will have to be left to the discretion of the competent authority, to select the particular hotels or lodging-houses in which there exist conditions justifying the fixation of the fair rate. The competent authority being expected to use his power to serve the purposes of the Act, it cannot be said that there is any conferment of arbitrary power on the competent authority.

Arguments at considerable length were addressed in regard to the point referred to in (b) above. It was contended that the power given to the competent authority to fix fair rates was bad in law as there was no guidance given by the Legislature. We do not think that it is necessary to discuss this matter in very great detail, for the simple reason that this is a point which is covered by a decision of the Supreme Court and also by the decision of this Court. In : [1962]3SCR547 , Raghubar Dayal Jai prakash v. Union of India, the constitutional validity of the operative provisions of the Forward Contracts (Regulation) Act, 1952, had been challenged. An attack was made on the validity of vesting power in the Central Government to fix prices without specifying the basis therefor, amounted to vesting in the Government an arbitrary power offending Article 14. While repelling that attack, the Supreme Court, at para 29 on page 275 stated as follows:-

'...... The control......... is to be exercised for ensuring that the price fixed shall be reasonable having regard to the cost of production and the general level of prices prevailing of other like commodities which are the subject of legitimate and proper trade. In the very nature of things it is not possible for the Legislature to determine beforehand the price at which a commodity may be sold or at which contracts in relation thereto might be entered into. The price must be dependent upon factors varying from time to time and cannot, therefore, be always a proper subject of legislative determination. Any fixation of prices either by naming a figure or by reference to the market price ruling on a particular date, must be productive of hardship both by reason of being mechanical and therefore out of tune with the varying factors which might obtain from time to time, as also of being liable to manipulation by unscrupulous traders..... Nor is it any defect in the Act that it does not in so many terms lay down the principles for the fixation of the price. In view of what we have stated earlier, the only guidance which the Parliament could have given was to direct that the price fixed be reasonable taking into account the relevant factors we have enumerated earlier....'

These observations apply with equal force, to the power that has been given under section 32 of the Act, to the competent authority to fix fair rates. Following the above Supreme Court decision, an identical attack against Section 32 of the Act was rejected by this High Court in 1964 Mys LJ (supp) 205, Modern Hindu Hotel v. State of Mysore. Somnath Iyer, J., speaking for the Bench stated;

'I do not find it possible to say that when the Legislature authorised the competent authority to make a determination of the fair tariffs for the matters specified in S. 32, that competent authority was entrusted with unguided or arbitrary power without the specification of standards. It is clear from sub-section (1) of S. 32 that what the competent authority is directed to do by that sub-section is to fix a fair rate to be charged for board, lodging or other services. What is therefore clearly implicit in this sub-section is that the rate of the tariffs of which there should be a determination by the competent authority must be a fair rate and a fair tariff. That is not all that sub-section (1) says. it directs the competent authority to make the determination of the fair rate having regard to the 'circumstances of the case'.'(Underlining (here in ' ') is by us)

Continuing further, his Lordship stated as follows:--

'It is a well-known rule and that is the rule now authoritatively proclaimed by their Lordships of our Supreme Court, that it is not always necessary when power is delegated to an executive agency to make a determination for the implementation of the policy incorporated in the law made by the Legislature, that the Legislature itself should enumerate exhaustively and fully, the criteria on the basis of which that determination has to be made. So long as the relevant factors to be taken into consideration for the purpose of making that determination are well known, or are fairly clear or are implicit in the law made by the Legislature it is really not necessary for the Legislature to make any enumeration of all those standards which in a given case may be quite impossible and impracticable.'

Again, at page 212, after indicating some of the criteria or standards which should be employed for the ascertainment of fair rates, that learned Judge has stated as follows:--

'The true approach that should be made in a case like this would be not to look into the Act for the purpose of finding all those standards by the application of which the determination under S. 32 could be made, but to consider whether there is not a sufficient indication in the impugned legislation of the method and manner of the determination entrusted to the competent authority. In my opinion, the correct way of understanding S. 32 is to understand it as directing the competent authority to take into consideration all those factors and standards which are generally applicable to a determination of fair rates to be made under S. 32 and so long as those factors and standards are well known, that the Legislature did not set out all those factors and standards an enumeration of which can by no means of exhaustive, cannot assist the argument of the petitioners that the omission by the Legislature to make the enumeration renders S. 32 defective and invalid.' There has been an exhaustive discussion of this question in the earlier decision of this Court referred to above and we find ourselves in full agreement with the conclusion reached in that case. The legislative policy is clearly declared in the law. That requirement is that fair rate should be determined. The varying factors on the basis of which the fair rate has to be determined in respect of any hotel or lodging-house has to be ascertained by the judicial procedure required to be followed by the competent authority. it is after a consideration of the relevant materials emerging from the enquiry, that the competent authority determines the fair rates. There are provisions in the Act and in the Rules which ensure that the order of the competent authority should be in writing and that the reasons in support of that order should also have been briefly stated. An appeal is also provided, against the order of the competent authority. There is sufficient safeguard against the exercise of any arbitrary power by the competent authority. The contentions under (b) that there has been delegation of arbitrary power and that the law does not disclose any guidance as to the exercise of that power, fail.

As regards the contentions under (c), it must be pointed out that it is implicit in sub section (4) that the number of lodgers has to be fixed in relation to a particular room or specified accommodation. In order to fix the number of lodgers, the competent authority must necessarily take into consideration such relevant factors as the size of room, the furniture and other furnishings in the room, the arrangements for proper ventilation and such other matters. We are unable to agree with the contention that the power given to the competent authority in the matter of fixing the number of lodgers is an arbitrary power. We do not also find any force in the contention urged in regard to the proviso to sub-section (4). All that it says is that if the persons to be accommodated in any room (or any specified accommodation) are members of the lodger's family, then, they may be accommodated therein even though their number exceeds that fixed by the competent authority for that room. This is a permissive provision. The possibility of persons falsely representing themselves to be of persons falsely representing themselves to be the members of the family of the lodger and thereby misleading the manager of a hotel or the owner (of a lodging-house) into a contravention of sub-section (4), cannot affect its validity. The manager or the owner is expected to take reasonable care in order to assure himself that such persons are the members of the lodger's family. If he has been misled by false representations made to him, it will be for him to plead and establish the same before the Court, should a prosecution be launched under Section 39(3). But, these matters cannot in any way affect the validity of sub-section (4) or the proviso thereto. The attack under (c), also fails.

(6) Sections 36 and 37, together, were read out by the learned Advocate for the petitioners and it was contended that the provision in Section 37 that on obtaining a certificate from the competent authority, the manager of a hotel or the owner of a lodging-house shall be entitled to recover possession of the accommodation provided by him to a lodger, amounted to an unreasonable restriction. These two sections are as follows:--

'36. Restriction on ejectment of lodger.--No manager of a hotel or owner of a lodging house shall evict or refuse board or other service to a lodger so long as he pays, or is ready and willing to pay the fair rate and observes and performs other conditions of his agreement in so far as they are consistent with the provisions of this Act'.

37. When manager of hotel or owner of lodging house may recover possession-Not withstanding anything contained by this Act, a manager of hotel or owner of lodging house shall be entitled to recover possession of the accommodation provided by him to a lodger on obtaining a certificate from the competent authority certifying that--

(a) The lodger has been guilty of conduct which is a nuisance or an annoyance to any adjoining or

neighbouring lodger; or

(b) the accommodation is reasonably and bonafide required by the owner of the hotel or lodging-

house, as the case may be, either for his own occupation or for any other cause which may be deemed satisfactory by the competent authority; or

(c) the lodger is habitually irregular in making payment of the charges for board-lodging or other ser--

vices provided in the hotel or lodging-house; or

(d) the lodger has failed to vacate the accommodation on the termination of the period of the agree--

ment in respect thereof; or

(e) the lodger has done any act which is inconsistent with the purpose for which the accommodation

is provided to him or which is likely to affect adversely and substantially the owner's interest therein.'

Section 36 imposes a restriction on the ejectment of any lodger as long as he is willing to pay the fair rate and observes and performs the other conditions of his agreement in so far as they are consistent with the provisions of the Act. It is difficult to say how a provision like this can be viewed as unreasonable. The protection to the lodger, from eviction, is available to only as long as he pays the fair rate and he is prepared to observe and perform the conditions of his agreement. The learned counsel for the petitioners were not able to show that Section 36, by itself, imposed any unreasonable restriction on the management of a hotel or owner of a lodging house. But, their argument was to the effect that when the Sections 36 and 37 are read together, the result the result that follows is that the ejectment of a lodger may not be possible except under the conditions set out in Section 37. It was also urged that by this provision, the common law right of an innkeeper to recover summary possession from any annoying guest, is taken away. The language of Section 37 also does not necessarily lead to such a conclusion. If a certificate is obtained from the competent authority, under Section 37, then, the manager of a hotel or the owner of a lodging-house becomes entitled to recover possession of the accommodation provided by him to the lodger. But,that does not fall within the protection of Section 36, the manager of a hotel or the owner of a lodging-house is prohibited from recovering possession of the accommodation if he has a right to do so otherwise than under the Section 37. The obtaining of a certificate under Section 37. It is merely an effective safeguard against any attack to the effect that the manager of a hotel or owner of a lodging-house was not entitled to recover possession of the accommodation. In these circumstances, we do not find any strength in this contention also.

(7) Mr. Jayaram complained particularly against Section 39 (1) read together with the Explanation and contended that it operated as an unreasonable restriction. It would appear that the petitioners in W. P. Nos 971 and 972 of 1996 provide long-term accommodation, at concessional rates. It was sought to be made out by Mr. Jayaram, that the restriction imposed by the above said provisions would result in a denial of those concessions, to the long term boarders or lodgers. We must state that it has not been made clear as to why such a result should follow from the provisions of Section 39 (1) read together with the Explanation; nor has it been made out before us, as to how the conditions set out therein would operate as unreasonable restrictions. Those provisions read as follows:--

'39. Penalties:--(1) If any manager of a hotel or owner of a lodging-house either himself or through any person acting or purporting to act on his behalf or if any person acting or purporting to act on behalf of a manager of a hotel or owner of a lodging-house receives any fine, premium or other like sum or deposit or any consideration other than the fair rate, in respect of the grant or continuance of accommodation in the hotel or lodging-house, such manager, owner or person shall, on conviction, be punished with fine which may extend to one thousand rupees; provided that such fine shall not be less than twice the amount of the fine, premium or sum or deposit or the value of the consideration received by him. The magistrate shall out of the fine levied, direct payment to the lodger of an amount equal to the fine, premium or other like sum or deposit or to the value of the consideration received from him.

(2)..........

(3)..........

(4)..........

(5)..........

Explanation,--For the purposes of sub-section (1), receipt of charges in advance for more than one month shall be deemed to be a fine or premium or consideration.'

In order to combat the hardship caused to boarders and lodgers by requiring them to pay a fine or premium, it is enacted in Section 39(1) that no fine, premium or other like sum or deposit other than fair rate, should be received by the manager of a hotel or the owner of a lodging-house. With a view to make clear what is a fine or premium, the Explanation has been enacted. The resulting position is that the manager of a hotel or the owner of a lodging-house is prohibited from receiving charges in advance for more than one month, from any lodger. This cannot be said to be an unreasonable restriction at all. The claims of the manager of a hotel or the owner of a lodging-house in regard to the services to be rendered to a lodger, are sufficiently safeguarded by his being able to ask for advance charges for any period not exceeding a month; at the same time, the lodger is not put to any undue hardship. As long as charges in advance can be demanded for a period not exceeding a month, the interests of the manager of a hotel or owner of a lodging house are adequately safeguarded, even in relation to long-term lodgers. We do not find any substance in the grievance sought to be made out by Mr. Jayaram.

(8) The learned Advocates for the petitioners urged that the provisions of Part VI which provide for the determination of fair rate in respect of food and drink served in hotels and lodging-houses are discriminatory and offend Article 14 of the Constitution, inasmuch as no such control is provided in respect of articles of food and drink sold in restaurants and eating-houses. Before a contention like this can stand, it must be satisfactorily established that in all material respects, the restaurants and eating-houses stand in a situation similar to that in which the hotels and lodging-houses are placed. There is, at least one very material distinguishing feature between the two. The rates in hotels and lodging-houses are, generally, so arranged that the resident boarders or the lodgers will not have much option, in the matter of taking food in the hotel or lodging-house. The prices of food and drink in hotels and lodging-houses, generally, are related to the rates for accommodation provided to the resident boarder or lodger and form part of the terms and conditions of his lodging. But such is not the case in regard to food and drink sold in restaurants and eating-houses. The consumer will be at liberty either to purchase or not, the food sold in restaurants or eating-houses. As a matter incidental to the accommodation provided in hotels and lodging-houses, the determination of fair rates for food and drink provided in hotels and lodging-houses, may be necessary. But, in the case of restaurants and eating-houses where there is no question of lodging, it may not be necessary to regulate the prices of food and drink sold there.

As laid down by the Supreme Court, the Courts should prima facie lean in favour of constitutionality and should support the legislation if its is possible to do so on any reasonable ground, and it is for the party who attacks the validity of the legislation to place all materials before the Court which would go to show that the selection s arbitrary and unsupportable. Throwing out of vague hints that there may be other instances of similar nature is not enough for this purpose'. Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. State of Delhi, : AIR1962SC458 . In the present case, beyond making vague averments, the petitioners have placed no evidence to establish the plea of discrimination. Having regard to all these circumstances, we are satisfied that the attack on the ground of alleged discrimination, must fail.

It was incidentally stated that there were many cases in which the managers of hotels and owners of lodging-houses were carrying on the business of selling articles of food and drink quite independently of their business of running the hotels or lodging-houses. It was pointed out that in such cases, the said independent business may suffer adversely if the prices of articles of food and drink sold by them were to be fixed by the competent authority. This is a grievance for which no factual basis is to be found in the allegations of the petitioners. A perusal of Section 32 shows that the power given to the competent authority, is to fix a fair rate to be charged for board (partial or full), or other services provided in a hotel or lodging-house. The provisions in Section 32 do not purport to give power to the competent authority to fix a fair rate for articles of food and drunk, when the sale of such articles is in the course of a business that is completely distinct and quite independent of the business of running a hotel or lodging-house. Such a question can be conveniently left open for consideration in a case wherein a specific complaint is made against any such action actually taken by the competent authority.

(9) As pointed out by the learned High Court Government Pleader, it should also be remembered that Part VI is found in an enactment which is only of a temporary duration. In considering whether the restrictions imposed by Part VI are reasonable, this aspect should not be lost sight of. We are not satisfied that the restrictions imposed by Part VI fall outside the scope of clause (6) of Article 19 of the Constitution.

(10) For the reasons above stated, we find that there is no merit in these writ petitions. They fail and are dismissed with costs. Advocate's fee Rs. 150 in each writ petition.

(11) Petitions dismissed


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