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British Medical Stores and ors. Vs. L. Bhagirath Mal and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy;Constitution
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 243 of 1951
Judge
Reported in(1954)56PLR449
ActsDelhi and Ajmer Merwara Rent Control Act, 1947 - Sections 7 and 7A; Code of Civil Procedure (CPC) , 1908 - Order 41, Rules 27 and 33; General Clauses Act, 1897 - Sections 6; Constitution of India - Articles 13, 13(1), 14 and 226
AppellantBritish Medical Stores and ors.
RespondentL. Bhagirath Mal and ors.
Appellant Advocate R.L. Anand and; D.K. Mahajan, Advs. by Mahajan, Adv.
Respondent Advocate Bhagwat Dayal,; D.K. Kapur and; Jugal Kishore, Advs.
Cases ReferredConsolidated Edison Co. v. National Labour Relations Board
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....kapur, j.1. these (in civil revisions nos. 243, 267 to 273, 274 to 292, 293 to 295 and 296 to 298 of 1951) are several rules which have been obtained by the landlord against the various tenants and in civil revision no. 243 a rule is obtained by the tenants against the landlord, and they are all directed against appellate orders of district judge dulat dated the 15th jan 1951 varying the orders of the rent controller.2. the landlord bhagirath mal, owns four sets of buildings of chandni chowk. they are chemists' market which is also called medicine market, jai hind buildings, prem buildings and deepak mahal. civil revisions nos. 243 & 274 to 292 relate to chemists' market, civil revisions nos. 267 to 273 to jai hind buildings, nos. 293 to 295 to prem buildings and 296 to 298 to deepak.....
Judgment:

Kapur, J.

1. These (in Civil Revisions Nos. 243, 267 to 273, 274 to 292, 293 to 295 and 296 to 298 of 1951) are several rules which have been obtained by the landlord against the various tenants and in Civil Revision No. 243 a rule is obtained by the tenants against the landlord, and they are all directed against appellate orders of District Judge Dulat dated the 15th Jan 1951 varying the orders of the Rent Controller.

2. The landlord Bhagirath Mal, owns four sets of buildings of Chandni Chowk. They are Chemists' Market which is also called Medicine Market, Jai Hind Buildings, Prem Buildings and Deepak Mahal. Civil Revisions Nos. 243 & 274 to 292 relate to Chemists' Market, Civil Revisions Nos. 267 to 273 to Jai Hind Buildings, Nos. 293 to 295 to Prem Buildings and 296 to 298 to Deepak Mahal. All these buildings arc situate in what is called Bhagirath Colony. On the 30th of July 1948 nine tenants of nine shops in Chemists' Market dealing in radios or electrical goods made an applications to the Rent Controller for fixation of rent under Section 7A read with Schedule IV of the Delhi Rent Control Act.

The Rent Controller on the 12th August without indicating in the order that he was as a matter of fact satisfied as to the excessive nature of the rent fixed between the parties and without there being any indication that that was his objective view issued a notice to Bhagirath Mal saying that a summary enquiry will be held and directing him to attend at his office on the 16th August along with all relevant records, plans, account-books vouchers, etc., and notice was also given to the nine applicants. The notice was in regard to these nine tenants only. It appears that after several adjournments the parties appeared and on the 19th of November some proceedings were taken and statement of Kundan Lal on behalf of the landlord was recorded. On the 3rd December 1948 a notice was issued to the landlord that the Rent Controller would inspect the premises on the 6th December 1948, but the landlord informed him that he would not be in Delhi on that date.

On the I2th December 1948 the Rent Controller inspected the premises in the absence of the landlord and on the 10th of January 1949 he fixed the standard rent for eighteen shops at Rs. 335/-per mensem. He has noted in this order about the quality of the building. The value of the land was calculated at Rs. 275/- per square yard, but he allowed only one-third of the value as the building is only one-storeyed and not a three-storeyed one and he calculated the value of the plinth area at Rs. 9/8/- per square foot and the standard rent fixed including ten per cent, for repairs but excluding house tax and charges for consumption of water and electricity was Rs. 335/- p.m. On appeal being taken to the District Judge the monthly rent was increased from Rs. 335/-to Rs. 670/- allowing the full value of the land, Both parties are dissatisfied with this order and have come up to this Court in revision.

3. The Rent Controller has hot only fixed the rent of the shops for which application was made but has also fixed the rent of the shops occupied by other persons who never applied and there-fore could not be parties to the proceedings and also of the vacant shops, and with regard to these shops no notice seems to have been given. The objection taken by the landlord is that Section 7-A read with Schedule IV is discriminatory inasmuch as it provides a different tribunal and procedure for determining the standard rent with regard to premises the construction of which was not completed before the commencement of the Act which was on the 24th March 1947 and that the method provided by Schedule IV laid down no principles and were vague, indefinite and unreasonable, that the Rent Controller had no jurisdiction to decide whether the buildings were completed before or after March 1947 nor could he reduce the rent at which the premises were first Jet and that in this particular case he had made private enquiries and had invited no evidence from the contestants and the calculations which he made for fixing the rent were not shown to the parties for rebutting them if they thought it necessary, and therefore the order of the Controller was vitiated as it was contrary to the principles of natural justice.

4. I have first to decide as to which law will govern the present case, the law in force at the time of decision by the Controller or the law existing on the date the appeal was decided. At the time when the proceedings started or the Controller gave his decision the case was governed by Section 7A and Schedule IV of the Act. This section provides for the fixation of standard rent of premises in Delhi the construction of which was not completed before the commencement of this Act, The Delhi Rent Restriction Act came into force on the 24th of March 1947 and Section 7A was added by Section 5 of the amending Act L of 1947. Thus the premises the construction of which was completed after the commencement of this Act are governed by a special procedure given in Section 7-A which makes the provisions of Schedule IV applicable to the determination of standard rent of such buildings, the relevant portions of which are:

'1. ......

2. If the Rent Controller on a written complaint or otherwise has reason to believe that the rent of any newly constructed premises is excessive, he may, after making such inquiry as he thinks fit, proceed to fix the standard rent thereof.

3. The Rent Controller in fixing the standard rent shall state in writing his reasons therefore.

4. In fixing the standard rent, the Rent Controller shall take into consideration all the cirstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition, to rent.

*****

7. For the purposes of an inquiry under paras. 2, 5 and 6, the Rent Controller may

(a) require the landlord to produce any bookof account, document or other informationrelating to the newly constructed premises.

(b) enter and inspect such premises after duenotice, and

(c) authorise any officer subordinate to him toenter and inspect such premises after duenotice.'

Thus according to these provisions, if the Rent Controller has reason to believe that the rent of any premises is excessive whether an application has been made to him or not, he can proceed to fix the standard rent and in determining tills rent he is authorised to look into the accounts of the landlord relating to the newly constructed premises, enter or inspect the premises though after notice, and this is the material on which, it appears he has to determine the standard rent.

Both under the Act of 1947 before Section 7-A was inserted in the Act and after the coming into force of the new Act of 1952 no distinction was and is made as to the tribunals which will determine the standard rent of premises new or old or the procedure to be followed or the principles on which the standard rent is to be fixed. Thus for the period during which Section 7-A was in force a different procedure and different tribunals for determination were prescribed by the Act in regard to premises the constructions of which was completed before or after, the 24th of March 1947.

5. As I see the provisions of Schedule IV the Rent Controller could not take cognizance of this matter without giving a finding that he had reasonable grounds to believe that the rent was in fact excessive. Reference may be made to --'Nakkuda Ali v. Jayaratne', 54 Cal WN 883 (PC) (A), where the words in the Regulation were--'Where the Controller has reasonable grounds to believe..........' which were interpreted by Lord Radcliffe to mean 'as imposing a condition that there must in fact exist such reasonable grounds known to the Controller, before he can validly exercise the power of cancellation' (p. 889). The Privy Council disagreed with the interpretation of the House of Lords in -- 'Liversidge v. Anderson', (1942) AC 206 (B), where the words used were '......has reasonable cause to believe.'

No doubt the words used in the present statute are '......has reason to believe' but it appears to me that these words do not have a different meaning from that given by Lord Radcliffe in --'Kakkuda Ali's case(A)', to the words which I have given above. Thus there was in the absence of an objective determination no basis for a valid exercise of the power of the Rent Controller. find therefore in my opinion the subjective i.e. an honest opinion of the Rent Controller does not give to the Controller the jurisdiction to take cognizance of the matter and this view is in accord with the decision in -- 'Nakkuda Ali's case (A)'.

6. At the time when the learned District Judge decided the appeal the Constitution of India had come into force on the 26th January 1950. The question is whether the learned District Judge should have decided the appeals in accordance with the law which prevailed at the time he was deciding the appeal or in accordance with the law which was in existence at the time when the proceedings were started, i.e. on the 30th of July, 1948, or when the first Court decided the matter on the 11th of January 1949.

7. The landlord petitioner contends that the law in force at the time when the learned District Judge was giving his decision would be applicable to his case. In other words if there was any change in the law during the pendency of the appeal the learned District Judge should have decided in accordance with that changed law.

Reliance is first of all placed on -- 'Quitter v. Mapleson', (1882) 9 QBD 672 (C), where a landlord brought an action to recover the demised property under a proviso of re-entry for breach of a covenant to insure. Relief was claimed under a statute and a judgment was obtained by the plaintiff on the 4th July 1881, but a stay of proceedings was granted and the plaintiff did not get possession. On the 1st of January 1882 the Conveyancing and Law of Property Act came into operation which was before the appeal was heard, and it was held that assuming the judgment of the first Court to have been correct according to the law as it then stood, the Court of Appeal could grant to the tenant the relief to which he was entitled according to the law as it stood at the hearing of the appeal and the Court of Appeal was authorised not merely to make an order which ought to have been made by the first Court but to make such further or other orders as the case may require. At page 676 Jessel, M.R., said:

'It was, in my opinion, intended to give appeals the character of rehearings, and to authorise the Court of Appeal to make such order as ought to be made according to the state of things at the time.' Bowen, L.J., said at page 678: 'If the law has been altered pending an appeal, it seems to me to be pressing rules of procedure too far to say that the Court of Appeal cannot decide according to the existing state of the law.'

8. The next case referred to is -- 'Attorney-General v. Birmingham, Tame, and Rea District Drainage Board', 1912 AC 788 (D), where it was held that an appeal to the Court of Appeal is by way of rehearing, and the Court may make such order as the Judge of first instance could have made if the case has been heard by him at the date on which the appeal was heard. At page 801 Lord Gorell said: 'The Court also has power to take evidence ofmatters which have occurred after the date ofthe decision from which the appeal is broughtsee Order LVIII, Rule 4)

It seems clear, therefore, that the Court of Appeal is entitled and ought to rehear the case as at the time of rehearing, and if any authority were required for this proposition it is to be found in the case of '(1882) 9 QBD 672 (C)'.' I may here point out that Order LVIII Rule 4 of the Supreme Court Rules of England corresponds to Order 41, Rule 33 of the Code of Civil Procedure in India.

9. The rule accepted by the Federal Court of India is the same. In -- 'Lachmeshwar Prasad v. Keshwar Lal, AIR 1941 FC 5 (E), it was held that the Federal Court of India as a Court of Appeal was entitled to take into consideration legislative changes which had supervened since the decision under appeal was given. At page 6, Gwyer, C.J., said:

'With regard to the question whether the Courtis entitled to take into account legislativechanges since the decision under appeal wasgiven, I desire to point out that the rule adoptedby the Supreme Court of the United States isthe same as that, which, I think, commendsItself to all three members of this Court.'

And this rule was laid down in two cases. In --'Patterson v. State of Alabama', (1934) 294 US 600at p. 607 (F), Chief Justice Hughes said:

'We have frequently held that in exercise of our appellate jurisdiction we have power not only to correct error in the judgment under review but to make such disposition of the cases as justice requires. And in determining what justice does require, the Court is bound to consider any change, either in fact or in law, which has supervened since the judgment was entered.'

10. This view was reaffirmed by the Court in -- 'Minnesota v. National Tea Co.', (1939) 309 US 551 (G), Sulaiman J. at pp. 8, 9 approved of this view of the law, and Varadachariar J. at pp. 13, 14 was of the same opinion. In this case both Sulaiman J. and Varadachariar J. approved of the law laid down in '(1882) 9 QBD 672 (C)'.

11. No doubt in -- 'Ponnamma v. Arumogam', 1905 AC 383 (H), which was case from Ceylon Lord Davey delivering the Judgment of the Privy Council observed: 'Their Lordships have only to say whether that judgment (the judgment of the Supreme Court of Ceylon) was right when it was given.' But in a later case -- 'K. C. Mukherjee v. Mt. Ram Ratan Kuer', AIR 1936 PC 49 (I); --'Quilter v. Mapleson (C)', was referred to and it was observed by Lord Thankerton in the course of the argument that the duty of a Court is to administer the law of the land at the date when the Court is administering it, and their Lordships did not deal with the judgment of the Patna High Court on its merits, but dismissed the appeal on the strength of a provision contained in an enactment which was passed only during the pedency of the appeal before the Privy Council.

12. More recently this matter has been debated in some of the Indian Courts. In --'Syed Unnisa v. Rahimuthunissa', AIR 1953 Mad 445 (J), there was a change in the law of inheritance of Muhammadans while the first appeal was pending before a Subordinate Judge, but he refused to apply the change in law to the case and in second appeal the learned Single Judge of the Madras High Court held that the appeal should have been decided in accordance with the change in the law. Reliance was placed in this case on -- 'Shyamakant Lal v. Rambhajan Singh', AIR 1939 PC 74 (K), and on -- 'Lakshmi Ammal v Narayanaswami Naicker', AIR 1950 Mad 321 (L).

13. The Nagpur High Court in -- 'Ghhote Khan v Mohammad Obedullakhan', AIR 1953 Nag 361 (FB) (M), held by a majority of two to one that a Court can take into consideration subsequent events viz., passing of a new Act during the pendency of litigation and adjudicate on the rights of the parties in the light of that Act.

14. In Crawford on Statutory Construction (Interpretation) of Laws the effect of a repealed law has been discussed and it is there stated that

'a repeal will generally, therefore, divest all inchoate rights which have arisen under the repealed statute and destroy all accrued causes of action based thereon. As a result, such a repeal, without a saving clause, will destroy any proceedings, whether not yet begun, or whether pending at the time of the enactment of the repealing Act, and not already prosecuted to a final judgment so as to create a vested right.'

Reliance is there placed on -- 'Wall v. Chesapeak and Ohio Rly. Co.', 125 NE 20 (N), where the law was laid down in the following terms:

'There is no vested right in a public; law which is not in the nature of a private grant. However beneficial an act of the legislature may be to a particular person, or however injuriously its repeal may affect him, the legislature would clearly have the right to abrogate it.'

At another place the law has been stated as follows:

'Pending Judicial proceedings based upon a statute cannot proceed after its repeal. The rule holds true until the proceedings have reached a final judgment in the court of last resort, for that Court when it comes to announce its decision, conforms it to the law then existing and may therefore reverse a judgment which was correct when pronounced in the subordinate tribunal from whence the appeal was taken, if it appears that pending the appeal a statute which was necessary to support the judgment of the lower Court has been withdrawn by an absolute repeal.-- Crawford on Statutory Construction.'

15. There is an important distinction betweenrights dependent upon a statute and those whichare not. Such an action falls with the repeal ofthe Statute even after the action thereon hasbeen instituted in the absence of a saving clause.The following language from '125 NE 20 (N)',will give some idea of the effect of a repeal beforefinal judgment has been rendered:

'It is well settled that if a statute giving aspecial remedy is repealed without a savingclause in favour of pending suits, all suits must stop where the repeal finds them. If final relief has not been granted before the repeal went into effect, it cannot be after. If a case is appealed, and pending the appeal the law is changed, the appellate court must dispose of the case under the law in force when its decision was rendered.'

But a different attitude has been taken by the Court where a criminal statute was involved: see page 601 of Crawford on Statutory Construction. In my opinion, therefore, the law to be applied at the time of appeal is the law which is in existence at the time the Court is deciding the appeal and the appellate Judgment must conform, to the law then existing.

16. It may here be stated that although by the Constitution Article 367 the General Clauses Act has been made applicable but the general saving clause given in Section 6 of that Act is applicable to express repeals and not where statute is by implication repealed. Per Fazl Ali J. in --'Keshanvan Madliava Menon v. State of Bombay', AIR 1951 SC 128 at p. 132 (O).

17. The effect of the coming into force of the Constitution of India on pending proceedings was considered in two cases by the Supreme Court but neither of them was at the appellate Stage. In -- 'AIR 1951 SO 128 (O), the majority of the Judges held that Article 13(1) of the Constitution is not retrospective and it cannot be read as obliterating the entire operation of the inconsistent laws. Such laws therefore exist for all past transactions and for enforcing all rights and liabilities incurred before the Constitution.

18. In the second case -- 'Lachhmandas Kewalram Ahuja v. State of Bombay', AIR 1952 SC 235 (P); 'Menon's case (O)', was explained that it related to substantive rights acquired or liabilities incurred under the Indian Press (Emergency Powers) Act before the Constitution, but under what procedure those rights are to be explained was not decided in that case. Das J. said at p. 243 :

'Under what procedure the rights and liabilities would be enforced did not come up for consideration in that case, as the procedure adopted throughout was the same, namely the procedure prescribed by the Code of Criminal Procedure.'

The rule to be deduced from these two easesmay be stated in the words of Das J. himself.His Lordship said at p. 243 of AIR 1952 SC235 (P) :

'Although the substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable as held in 'AIR 1951 SC 128 (O), nobody can claim, after that date, that those rights or liabilities must be enforced under that particular procedure although it has since that date, come into conflict with the fundamental right of equal protection of laws guaranteed by Article 14.'

19. In the present case the substantive right to get standard rent fixed is not assailed but the attack is directed against the discrimination in regard to the tribunal appointed under Section 7-A and Schedule IV to determine the standard rent and the method of determining it and the procedure or want of procedure indicated by those provisions. Because the result of the operation of Section 7-A and Schedule IV is to reduce the rents from those fixed by contracts which necessarilywill affect the prices of the petitioners' properties, as the rent fixed will enure for the future also.

20. There is no doubt that Article 13(1) is not retrospective but is prospective and the transactions which are past and closed and rights which have already vested will remain unaffected. Therefore if the determination of the rents under Section 7-A and Schedule IV before the Constitution had not been appealed against or the appeal had been decided before the Constitution, it might not have been open to the petitioner to challenge the question of their constitutionality. But' in this case the appeal was decided after the Constitution when it is submitted the whole question would be reopened. At that time if by virtue of Article 14 this section had become unconstitutional because of discrimination would not, so it was contended, the petitioner be entitled to plead Article 13(1) in support of his claim particularly on the ground that it is the final order of the District Judge which is going to prejudicially affect his rights and this order was passed after the Constitution.

21. In 'AIR 1952 SC 235 at pp. 244-245 (P)', it was said that the Constitution does not invalidate that part of the proceedings 'which has already been gone through.' But if the appeal is a rehearing and the appeal Court is to decide in accordance with law in force at the time it is deciding it is submitted that the decision should be in accordance with that law which avoids discrimination and is in accord with the procedure prescribed by the Civil Procedure Code.

22. If the law as stated in Crawford on Statutory Interpretation is to be accepted the answer on the question of constitutionality of Section 7-A and Sen. IV should be in favour of the petitioner but would it not mean following the view of fazal Ali J. in 'AIR 1951 SC 128 (O), and would it not be out of accord with the majority view and particularly the view taken ha 'AIR 1952 SC 235 (P)', by the Court viz., the constitution does not invalidate that portion of the proceedings' 'which has already gone through.' Even though those were criminal matters which Crawford has distinguished, yet by declaring the procedure unconstitutional we shall be giving retrospectivity to the constitution which would be contrary to the law laid down by the Supreme Court.

23. Standard rent is defined in Section 2 (c) of the Act:

'2(c). In this Act, unless there is anything repugnant in the subject or context 'standard rent' in relation to any premises, means (i) standard rent of the premises as determined in accordance with the provisions of the Second Schedule, or (ii) where the standard rent has been fixed by the Court under Section 7, the rent as fixedby the Court, or (iii) where the standard rent has been fixed under Section 7-A, the rent so fixed.'

Therefore the very definition is different for premises old and new: old being those the construction of which was completed before and new are those of which it was completed after the 24th of March, 1947- Thus according to this definition itself the standard rent in the case of old premises is to be determined under Section 7 of the Act by regularly constituted Courts of law in accordance with the well recognised procedure of the Civil Procedure Code which is in accord with the judicial notions accepted by all civilised nations. But in the case of newly constructed premises a different tribunal is established and in my view no procedure is laid down as it will presently be seen.

24. The constitutionality of Section 7-A of the Act read with Schedule IV is assailed on the ground that it violates the principle of equality before the law and equal protection of law guaranteed by Article 14 of the Constitution. The petitioners firstly object to the classification of the premises into newly constructed premises and old premises. It is submitted that this does not pass the test of permissible classification as there is no nexus between the basis of classification and the object of the Act, the test laid down by Das J., In 'AIR 1952 SC 235 at pp. 243-244 (P)'. I cannot find any rational relation between the differentiation and the object sought to be achieved by the Act and none has been pointed out by the learned Advocate for the tentants respondents

25. I am of the opinion that if the provisions of Article 13(1) of the Constitution could be made applicable to the facts of this case there would be clear violation of the principle of equal protection of the law. But by applying this principle the Constitution will be having a retrospective effect which majority in Menon's case (O), and the Court in Ahuja's case (P), have held to be prospective. And therefore I would prefer not to give an opinion on this point and would not base my judgment on the violation of the equal protection of the law clause.

26. In the case of any newly constructed premises which fall under Section 7-A read with Schedule IV, the Rent Controller, who may be a layman as in this case, whether a written complaint is made to him or otherwise if he has reason to believe that the rent is excessive may, after making such enquiries as he thinks fit, proceed to fix the standard rent. All that the Schedule requires is that :

(i) he shall give reasons.

(ii) he shall take into consideration any sum paid or to be paid as premium or any sum in addition to the rent.

(iii) he may for purposes of the enquiry call upon the landlord to produce the books of account, document or other information relating to the newly constructed premises but what use he is to make of them is not stated.

(iv) he may enter or inspect, after notice, the premises or authorise his subordinate official to do so.

Though an enquiry and I shall deal with the meaning of this word later, seems to be contemplatedin Clause 7 of the Schedule under clauses its scope is left to the vagaries of the Rent Controller andhe can hold such enquiry as he thinks fit which may be none at all. In this case the notice issued to the petitioner itself said that it will be summary enquiry whatever it may mean. As I have said no procedure is prescribed and no standards are laid down. There is no provision for evidence by the parties nor whether ii is to be on oath. It appears that the Controller can make private enquiries as he has done in this case. No enquiry as it is understood by lawyers was held. The rents seem to have been fixed on data which the Controller collected as a result of his own observation.

Thus all recognised principles governing tribunals which exercise quasi-judicial powers in accordance with principles of natural justice or procedure subserving the orderly administration, or justice have been disregarded. And according to Schedule IV it is nothing but arbitrary power which the Controller exercises. There is no reasonable basis and none has been shown for fixing the rents of newly constructed premises differently or at a different figure than the rents which are being paid for similar premises in the same locality and which from a commercial point of view may be equally valuable. The power given to the Controller is without limit and the schedule vests in him an unfettered and unguided discretion in fixing the standard rent.

Under the pretence of regulating rents under this Schedule, the Rent Controller can fix the rent which may be so ridiculous as to reduce the value of the landlord's property to any unreasonable figure. To a case such as this the observations of Mr. Justice Mathews in the American, case -- 'Yick Wo V. Hopkins', (1885) 118 U. S. 356 at p. 373 (Q), where he said:

'When we remember that this action or non-action may proceed from enmity or prejudice, from partisan zeal or animosity, from favouritism and other improper influences and motives easy of concealment and difficult to be detected and exposed, it becomes unnecessary to suggest or comment upon the injustice capable of being wrought under cover of such a power, for that becomes apparent to every one who gives to the subject a moment's consideration. In fact an ordinance which clothes a single individual with such power hardly falls within the domain of law, and we are constrained to pronounce it inoperative and void.'become aptly applicable, although this observation must be read in terms of the 'due process clause.'

27. Another ground raised by the petitioner is that the decision of the Rent Controller is contrary to the principles of natural justice. I have already analysed the provisions of Schedule IV and they are so out of: accord with the principles of natural justice that a decision given under that schedule must, apart from any question of infringement of the Constitution, be held to be a violation of the maxim of the administration of justice in this country 'audi alteram partem' which according to the Supreme Court is 'legem terree'; see -- 'Bharat Bank Ltd. v. Employees of the Bharat Bank Ltd.', AIR 1950 SC 188 (R); -- 'Veerappa Pillai v. Raman & Raman Ltd., AIR 1952 SC 192 (S) and -- 'Parry & Co. v. Commercial Employees' Association, Madras', AIR 1952 SC 179 (TJ.

28. In the present case no evidence us to rent was called from the parties or recorded by the Controller nor was any opportunity afforded to the parties to adduce such or any evidence which they considered necessary to submit. The controller made private enquiries and his order shows that he has based his decision on the cost of the building which he himself calculated without allowing the petitioner an opportunity to show that such calculation was wrong or its basis erroneous. Of course there is no procedure prescribed by the Schedule and whatever procedure was followed does not subserve the orderly administration of justice. So that the determination is based on private enquiries, unchecked calculations and no evidence of the parties who were afforded no opportunity of proving their respective cases. And the matter falls within the observations of Mahajan J. in 'AIR 1950 SC 18S at p. 204 (R)' where his Lordship said:

'It seems to me therefore that the procedure adopted by the Tribunal was against all principles of natural justice and the award is thereby vitiated and should be set aside.'

29. I would like to add that the use of the. word 'enquiry' in Clause 7 of Schedule IV should) ordinarily connote an inquiry which approximates to a judicial inquiry where parties are called upon and are given an opportunity to lead evidence and they do lead evidence in support of their respective claims. Lord Esher, M. R., in -- 'Baroness Wenlock v. River Dee Co.', (1887) 19 Q B D 155 at p. 158 (U) observed:

'The reference under Section 56 is to be for inquiry and report. It does not appear to me that the word 'inquiry' only includes an inquiry which the referee is to make with his own eyes. The word 'inquiry' in my opinion signifies an inquiry in which he is to take evidence and hold a judicial inquiry in the usual way in which such inquiries are held. The word 'inquiry' is used because it is not meant to have the same result as a trial.'

The role of the Courts in regard to statutory Tribunals is to serve as a check on the Tribunal a check against excess of power and abusive exercise of power in derogation of private right. Broadly speaking judicial control is assured where amongst other things review can be had only on the following grounds :

1. ULTRA VIRES: to ensure that the determination by the tribunal was within the authority delegated on the agency.

2. NATURAL JUSTICE: that at least minimum standards of fairness, which in the United States is called 'the fundamentals of fair play' are observed: see -- 'Federal Communications Commission v. Pottsville Broadcasting Co.' (1939) 309 US 134 (V).

3. SUBSTANTIAL EVIDENCE: that the administrative determination has basis in evidence of rational probative force.

In the present case principles of natural justice have not been observed and no evidence called from either of the parties. There is no 'substantial evidence.' I do not mean to say that this Court exercising powers under Article 226 of the Constitution of India is concerned with the weight of the evidence. The judicial review goes no further than to ascertain whether there is evidence to support the findings, and the question of the weight of the evidence in determining issues of fact lies with the statutory authority: see -- 'St. Joseph Stock Yards Co. v. United States', (1935) 298 US 33 (W). And has been remarked the 'substantial evidence' rule becomes a test of the rationality of determination by the statutory tribunals, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion: see -- 'Consolidated Edison Co. v. National Labour Relations Board', (19381 305 US 197 (X).

30. If this test is applied to the facts of the present case the requisites have hopelessly been ignored. There was not even an attempt to call for evidence nor even a pretence of anything approaching a trial and the whole of these determination by the Bent Controller was based 011 his priate enquiries, visual examination and arithmetical calculations made 'ex parte' something similar to what Lord Esher, M. R. has stated, i.e., 'which a referee is to make with his own eyes is not sufficient for the purposes of inquiry.'

31. Even if the provisions of Section 7-A read with Schedule IV may be unconstitutional because of the coming into force of the Constitution it is not necessary to base the present judgment on that ground. There has been such a violation of the principles of natural justice and there is such contravention of the substantial evidence rule that the order of the Rent Controller must I be set aside on that ground.

32. Therefore I am of the opinion

(1) because of the want of any material for an objective view by the Controller as to the excessive nature of the agreed rent, the foundation for the valid exercise of jurisdiction was net laid. See '54 Cal WN 883 (PC) (A)'.

(2) that the appellate Court has to take into consideration all changes whether of law or of fact which have supervened since the original judgment was passed;

(3) as a result of the coming into force of the Constitution during the pendency of the appeal the provisions of Section 7A, read with Schedule IV are unconstitutional and have therefore become void;

(3) (a) but by applying Article 13(1) and Article 14 to this case the Constitution will become retroactive which is contrary to the Supreme Court judgments;

(4) that in regard to the vacant shops the Rent Controller could not make any determination of rent because none had by contract been

(5) in regard to persons who has not made any application and in regard to whom no noticewas given to the landlord the determination is contrary to the principles of natural justice; and

(6) the whole procedure is so out of accord with the principles of natural justice that the decision is vitiated and should be set aside; and

(7) the substantial evidence rule has been contravened.

33. I shall now take up the other questions which have been raised in regard, to the various sets of premises.

34. Medicine Market; The Controller has not only determined the rents for premises for which no application had been made to him, but he has also determined the rents of vacant shops, which determination under the new Act of 1952 will affect the rents for future also. In my opinion, it was not open to the Rent Controller to determine the rents of vacant premises because he cannot have any opinion about the excessive nature of rent when no rent is fixed.

35. The applicants for determination of rent were nine tenants and not 13 and in regard to the other nine there was no notice to the land lord and therefore any determination of the rent without notice to the landlord would be contrary to natural justice: see 'AIR 1950 SC 188 at p. 204 (R)' and other cases noted above.

36. It was next submitted that the return of 6 per cent. which has been ordered by the Rent Controller is unreasonable and the right of the Court to determine the reasonableness of the rights was sought to be supported by a passage from Willoughby on the Constitution of the United States p. 821 where the law has been stated in the following words :

'The Courts may also hold such an administratively determined rate to be so high as to be-unduly oppressive or extortionate to the public.'

This view of the law must be accepted in this country also.

37. In their application the petitioners have stated that the bank rates for advances are from Rs. 9/- to Rs. 12/- per cent. and that the rent at 6 per cent, is so low as to be unreasonable particularly when for improvements the schedule itself prescribes a ceiling of 7 1/2 per cent. The respondents have filed no affidavits to the contrary but rents of buildings do not necessarily correspond to the Bank rate. But in the absence of any evidence it is difficult to decide this question. If normal procedure of the Civil Procedure Code had been followed the result might have been different. This much however is clear that parties have been prejudiced and that may be an additional reason for setting aside tile Controller's' order.

38. It was then submitted that the application of Schedule IV and Section 7A of the Rent Restriction Act, does not exclude the applicability of Schedule II of the Act where increase in the case of commercial premises has been allowed by 50 per cent. No doubt these are commercial premises, and in my opinion applicability of Schedule II is not expressly excluded in regard to premises which fall under Section 7A, but this point does not seem to have been raised before the Controller or the District Judge and I do not think that it can be raised at this stage, and as we are holding the whole proceedings under Section 7A to be 'ultra vires', it is not necessary to go into this point.

39. I would therefore quash the order of the Rent Controller and leave the parties to have their rights determined in accordance. with law. No order as to costs. (His Lordship then considered the case with respect to 'Jai Hind Buildings', 'Prem Buildings', 'Deepak Mahal' and concluded:) In the result the petitions of Bhagi-rath Mal Petitioner in Civil Revisions Nos. 267 to 298 of 1951 are allowed and the rules made absolute and Civil Revision No. 243 of 1951 is dismissed and the rule discharged. The parties will bear their own costs throughout.

Khosla, J.

40. I agree.


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