1. This judgment will deal with two appeals, Regular Second Appeals Nos. 270 and 277 of 1951, in which the same points are involved. Both the appeals have arisen out of suits instituted by the respondent, the Municipal Committee of Moga, against Suraj Bhan, the appellant in Regular Second Appeal No. 270, and against Bhagwan Singh, who has apparently since died and is now represented by his widow and sons, who are the appellants in Regular Second Appeal No. 277, for the recovery of Rs. 760/- and Rs. 752/- respectively, on account of arrears of rent. In the case of Suraj Bhan shop No. 24 owned by the Municipal Committee was leased to him for the period 1st April 1947 to 31st March 1948 at Rs. 50/- per mensem by public auction held on the 26th of February 1947, and the same shop was leased to him for the period from 1st April 1948 to 31st March 1949 at Rs. 50/-per mensem by public auction held on the 18th of March 1948.
Out of the total amount due as rent for these two years, Suraj Bhan had only paid Rs. 320/-and therefore the suit was instituted for the balance of Rs. 760/-. Similarly in the case of Bhagwan Singh shop No. 55/B also owned by the Municipal Committee was leased to him for the same periods by public auctions held on the same dates at monthly rentals of Rs. 53/-and Rs. 60/- for the two years, and all he had paid was Rs. 604/- leaving a balance due ofRs. 752/- The defence in both the suits was also on similar liaes. In the case of Suraj Bhan, it was alleged, and it is not denied by the Municipal Committee, that later in the year 1947, white the first year's tenancy was in force, he applied to the Rent Controller at Moga for fixing the fair rent of the shop and by agreement between the parties the fair rent was fixed at Rs. 21/4/- per mensem. Also later in the year 1948, he again applied and this time the Rent Controller fixed the fair rent of the shop at Rs. 1-4/7/- per mensem.
In the case of Bhagwan Singh, it is not disputed that in 1947, when the Rent Controller was approached under the Punjab Urban Rent Restriction Act, he fixed the fair rent of the shop at Rs. 36/- per mensem, and again in 1948, when the Rent Controller was approached, he fixed the fair rent at Rs. 20/10/- per mensem. Both the defendants contended that the fixing of the fair rent by the Rent Controller in the circumstances amounted to anestoppel and debarred the Municipal Committee from claiming rent at the contracted rates for the two periods of tenancy, while, on the other hand, the case of the Municipal Committee was that by orders of the Punjab Government passed under Section 3 of the Punjab Urban Rent Restriction Act. shops owned by Municipal Committees were exempted from the general provisions of the Act, and therefore the fixation of the fair rent by the Rent Controller on all these occasions was wholly without jurisdiction and did not in any way debar the Municipal Committee from claiming rent at the contracted rates. -
In both the suits the trial Court found in favour of the defendants, with the result that a decree for only Rs. 26/8/- was passed against Suraj Bhan, and the suit against Bhagwan Singh was dismissed, altogether. Appeals were filed in both cases by the Municipal Committee and the learned Senior Subordinate Judge, upholding the case of the Committee in both the suits, passed decrees against both the defendants for the full amounts claimed. Suraj Bhan defendant'. and the legal representatives of Bhagwan Singh have accordingly come to this Court in second appeal.
2. The main question is clearly whether the shops in suit were subject to the general provisions of the Urban Rent Restriction Actduring the two yearly periods of tenancy of the defendants. The Act which was in force at the time of the first contract between the parties was the Punjab Urban Rent Restriction Act of 1941, which had originally been enacted for five years, but which was extended by a further year, and then was superseded as from the 15th of April 1947 by the Punjab Urban Rent Restriction Act (Act VI of 1947). In both the Acts, Section 3 provides that the Provincial Government may direct that all or any of the provisions of the Act shall not apply to any particular building or rented land or any class of buildings or rented lands. By an order dated the 21st of February 1947 it was ordered by the Governor of the Punjab under Section 3 of the Act of 1941 that the provisions of the Act should not apply to the following premises vesting in a local body administering the 'urban area' in which such premises are situated: (i) any building or part of a building let separately, for being used as a shop or stall;
(ii) any land let separately for the purpose of being used principally for business or trade.
I do not think there can be any doubt that under the provisions of the General Clauses Act this order remained in force even after the earlier Act was superseded by the Act of 1947, at any rate until the 26th of April 1948, when a fresh order was issued by the Governor under Section 3 of the Act of 1947 cancelling the order of the 21st of February 1947 except so far as it concerned the urban areas of Jullundur, Ambala and Ferozepore. After this order, however, it would appear at first sight that the shops belonging to the Moga Municipal Committee became as from the 26th April 1948 subject to the ordinary provisions of the Act, which include the fixing of fair rent by the Rent Controller in appropriate cases. Although, however, this may be the first impression derived from this order, it appears that it was not the intention of the Government that the order of the 26th April 1948 should operate fully until after the termination of existing contracts, and this was accordingly made clear in an executive instruction which was circulated on the 18th of November 1948, and which reads :
'Government are advised that contracts regarding the leases of property entered into between the local bodies and the contracting parties before the 26th April 1948, must be fulfilled and as such the rent of the houses and shops leased out by the local bodies before that date can be charged at old rates. The order of East Punjab Government dated 26th April 1948 cancelling the exemption granted by Government under Section 3 of the Punjab Urban Rent Restriction Act, 1947, to certain premises vesting in any local body administering the urban areas shall only apply to the transactions made after the 26th April 1948.'
It seems, however, that a number of Courts, possibly in other places besides Moga, had taken the view that the exemption was completely cancelled as from the 26th of April 1948, and accordingly the Government enacted Punjab Ordinance No. 1 of 1951 entitled 'The Local Bodies (Validation of Contracts) Ordinance, 1951' the relevant parts of which require to be set out 'in extenso'.
It reads :
'Whereas the premises vesting in any local body administering an urban area had been exempted from the provisions of the Punjab Urban Rent Restriction Act, 1947, for the time being in force; And whereas the exemption aforesaid was cancelled on the 26th April 1948, in respect of all Urban areas except the urban areas of Jullundur, Ambala and Ferozepore;
And whereas doubts have arisen with respect to the construction of contracts and agreements entered into between such local bodies and tenants prior to the 26th April 1948, and it is considered expedient, to validate such of those contracts and agreements which subsisted on the aforesaid date;
X X X X
1. (1) This Ordinance may be called the Local Bodies (Validation of Contracts) Ordinance, 1951.
(2) It shall come into force at once.
(3) It shall apply only to those contracts and agreements validly executed and entered into before the 26th April 1948, between a municipal committee, a town committee or a notified area committee and a tenant with respect to premises & lands vesting in such committee.
2. Validation of contracts and agreements: All contracts and agreements to which this Ordinance applies and which, but for the cancellation of exemption on the 26th April 1948, would have been enforceable & effective, shall, notwithstanding the said cancellation, the provisions of the Punjab Urban Rent Restriction Act, 1947, or the East Punjab Rent Restriction Act, 1949, be deemed to be and always to have been validly executed and entered into, for the period of their duration only between the parties thereto and their representatives in interest.'
3. Although the courts do not view with joy any retrospective legislation intended only to undo the effect of judicial decisions, I do not think there can be any doubt regarding the power of the povernment to enact an Ordinance of this kind and to make it clear thereby that the cancellation of the exemption by the order of the 26th April 1948, did not apply to contracts already entered into regarding exempted property between local bodies and tenants and in fact the validity of this Ordinance has been upheld in the case of a dispute between a tenant and the notified area committee of Dabwali by Khosla J. in -- 'Civil Miscellaneous No. 158 of 1951' decided on the 10th August, 1951.
Such being the case, it is clear that the proceedings between the parties in these two suits before the Rent Controller both in 1947, and even in 1948, after the general cancellation of the exemption, were without jurisdiction and the mere fact that in neither case did the Municipal Committee choose to contest the jurisdiction of the Rent Controller is not sufficient to validate the proceedings before him.
4. Some attempt was made by the learned counsel for the appellants to raise a fresh point, namely that the contracts of lease entered into by the defendants as a result of their purchasing the leases of the shops at auction were not valid contracts, as they were not in the proper form, but this is entirely a new point which has never been raised before in either of the Courts below, where the cases were contested throughout on the assumption that the leases thus purchased were valid contracts except by reason of the operation of the provisions of the Rent Restriction Act, and I do not consider that point of this kind can be permitted to be raised for the first time at this stage. The result is that I dismiss both the appeals, but in the circumstances order that the parties should bear their own costs in this Court.