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PETITIONER: M.L. MANCHANDA & ORS.

       Vs.

RESPONDENT: UNION TERRITORY OF CHANDIGARH & ORS.

DATE OF JUDGMENT17/03/1977

BENCH: SINGH, JASWANT BENCH: SINGH, JASWANT KRISHNAIYER, V.R.

CITATION:  1977 AIR 1353            1977 SCR  (3) 327  1977 SCC  (2) 640

ACT:             Punjab  Industrial Housing Rules, 1972, R.4(3),  whether         ultra vires the Punjab Industrial Housing Act, 1956--Whether         operates retrospectively.

HEADNOTE:             The appellants and respondents Nos. 3 to 37 herein, were         allottees  of houses in Chandigarh constructed by the  State         Government   for  low  paid  industrial  workers  under  the         Industrial Housing Scheme subsidised by the Central  Govern-         ment.   The Labour Inspector, Union  Territory,   Chandigarh         gave  them notices in terms of the proviso to, rule 4(3)  of         the  Punjab Industrial Housing Rules, 1956, as amended  vide         Notification  dated  November 7, 1972, to.  show  cause  why         their  allotments  should not be cancelled.  The  income  of         each  of them exceeded Rs. 350/- per mensem, which  disenti-         tled  them to retain their allotments.  The  appellants  and         the  said  respondents filed a joint petition  in  the  High         Court  for a writ to quash the amendment to rule 4,  and  to         restrain the Government from cancelling their allotments and         evicting them.  The writ petition was dismissed.  The appel-         lants contended firstly, that rule 4(3) was ultra vires  the         Punjab Industrial Housing Act, 1956 as it took out industri-         al  workers  with income exceeding Rs. 350/- p.m.  from  the         scope  of section 2(e) of the Act which  defines  industrial         workers; and secondly, that the authority competent to  make         rules u/s 24 of the Act cannot frame rules having retrospec-         tive  effect, and as the amended rule 4(3)  operates  retro-         spectively it is invalid         Dismissing the appeal by special leave, the Court,         HELD:             (1)  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         24 specifically empowers the State Government to make  rules         to provide inter alia for the manner of allotment of  accom-         modation  and  conditions relating to  its  occupation.  The         impugned  amendment which squarely falls within the  purview         of the aforesaid provisions of section 24, was validly made,         and was not ultra vires.  [331 G-H, 331 (a)-C]

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           (2)  Section 7 of the Act embodies a  deeming  provision         and  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         fulfil  any  of  the prescribed conditions  then  in  force,         including  the one relating to the limit of his income,  and         thereby becomes amenable to action under section 9(2) of the         Act.  [331(a)-A-B]             (3)  The  proviso to rule 4(3) 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 month’s notice in writing of the  can-         cellation.   The rule is not intended to operate  retrospec-         tively on industrial workers who had been allotted and  were         in occupation of industrial houses immediately before,         328         the  amendment of the Punjab Industrial Housing  (Chandigarh         First  Amendment) Rules, 1972.  [331(a) E-F]         The Court observed             The  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  legiti-         mately evolve the method which it did, to disentitle  indus-         trial workers whose monthly income was relatively large,  to         retain  the houses.  [331 (a) -C-D]

JUDGMENT:         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1744 of 1976.             (Appeal  by Special Leave from the Judgment  and   Order         dated 28.4.1975 of the Punjab & Haryana High Court in  Civil         Writ Petition No. 1819/75)         M.K. Ramamurthi and J. Ramamurthi, for the appellants.         Madan Mohan, for the respondents 4-8, 10-25, 27-30 & 32-36.         B.D. Sharma & R.N. Sachthey, for respondents 1-2.         The Judgment of the Court was delivered by             JASWANT SINGH, J.--This appeal by special leave which is         directed  against  the judgment and order  dated  April  28,         1975, of the High Court of Punjab and Haryana at Chandigarh,         dismissing  Civil  Writ Petition No. 1819 of 1975  filed  by         the  appellants  and  respondents 3 to 37  herein,  who  are         industrial  workers  employed in Factories  situate  in  the         industrial area in Chandigarh.             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 under:---                        "4.  Eligibility  for  allotment--(1)    Two-                       roomed  tenements shall be allotted to  indus-                       trial 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."                       329

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                         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 for allotment--(1) Two  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  tene-                       ments 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, applica-                       tions should first be invited from such  work-                       ers 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  allot-                       ment  to  workers,  whose  income  exceed  Rs.                       250.00 per mensem.  Where these tenements  are                       given to higher paid workers the normal subsi-                       dised  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 per mensem."             Vide Notification No. 7480-4H(8)-72/21542  dated  Novem-         ber 7, 1972, the Chief Commissioner, Union Territory, Chand-         igarh,  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  fol-         lowing, ,after sub rule (2) in Rule 4 of the Rules:--         330                           "(3)  An  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  Hous-

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                     ing   (Chandigarh  First  Amendment)    Rules,                       1972, his allotment shall be cancelled by  the                       Labour  Commissioner  after  giving  him   one                       month’S  notice in writing of  such  cancella-                       tion.                            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 that date."             The  appellants 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 covered 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  Arti-         cles  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 Rules and restraining respondents 1 and 2 from  pro-         ceeding 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  defini-         tion 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 and  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.         331             Appearing in support of the appeal, Mr. Ramamurthy  has-         reiterated before us that since the appellants and  respond-         ents 3 to 37 are admittedly industrial workers as defined in         clause  (e)  of section 2 of the Act, the  impugned  rule  4         which  is designed to cancel their allotment, on the  ground         that  their salary exceeded Rs. 350/- per mensem is  clearly         repugnant to that clause and as such utra vires and  invalid         as it takes out industrial workers with income exceeding Rs.         350/per  mensem  from the scope of the  definition.  He  has         further contended that since the authority competent to make         rules  under  section 24 of the Act cannot  frame  any  rule         having  a retrospective effect and the  impugned  rule--rule         4(3)  as amended operates retrospectively, the same  is  in-         valid.   He has lastly urged that the impugned  notification         is also invalid as if makes hostile and arbitrary  discrimi-

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       nation  against industrial workers whose income exceeds  Rs.         350/-  per  mensem, and thereby violates the  guarantee  en-         shrined in Article 14 of the Constitution.             We  shall deal seriatim with all the  three  contentions         raised  by Mr. Ramamurthy.  Before embarking on  that  task,         we  consider  it appropriate to scan the scheme of the  Act.         Section  3 of the Act clearly states that the Act  shall  be         applicable to houses constructed by the State Government for         the occupation of  industrial  workers under the  Industrial         Housing  Scheme subsidised by the Central  Government.   The         scheme, as  evident from the  affidavit of the  Home  Secre-         tary, Chandigarh Government, is meant for the benefit of the         low aid industrial workers and economically weaker  sections         of the community.  Section 9(1) of the Act provides that the         occupation  by any person of a house shall at all  times  be         subject to such conditions relating to its occupation as may         be  prescribed, or as may be intimated from time to time  by         the Labour Commissioner.  Section 7 of the Act sets out  the         circumstances  in which a person shall be treated to  be  in         unauthorised  occupation  of any house.  Clause (b)  of  the         section explicity states that a person shall be deemed to be         in unauthorised occupation  "Where being an allottee  he has         by  reason of cancellation of an allotment  under   sub-sec-         tion  (2) of  section 9 ceased to be entitled to occupy  the         house".  Sub-section  (2)  of section 9, which is  necessary         to  be  referred to at this stage and which because  of  the         non-obstante clause contained in its opening part  overrides         all  other laws for the time being in force, authorises  the         Labour Commissioner after giving notice to the allottee  and         considering  the explanation tendered by him to  cancel  the         allotment  under which a house is held or occupied  by  him.         Section 24 of the Act not only empowers the State Government         generally  to make rules to effectuate the purposes  of  the         Act  but also specifically confers on it the power  to  make         rules  to provide inter alia for the manner of allotment  of         accommodation and conditions relating to its occupation [see         section  24(2)(ii)] as also for the matters which are to  be         or  may be prescribed [see section 24(2)(x)].  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         331(a)         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  accommoda-         tion  by reason of cancellation of the allotment under  sub-         section (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 fulfil 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 occupa-         tion  becomes un-authorised on any one of the  grounds  laid         down  in section 7 of the Act.  We are,  therefore,   satis-         fied that the impugned amendment which squarely falls within         the purview of the aforesaid provisions of section 24 of the

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       Act  was validly made and the contention urged by Mr.  Rama-         murthy 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 immedi-         ately   before  the  amendment   of  the  Punjab  Industrial         Housing  (Chandigarh First Amendment) Rules, 1972.  It  une-         quivocally 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 month’s notice in  writing.   The         proviso therefore clearly shows that the allotment of an in-         dustrial 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         month’s  notice in writing of the cancellation.  The  second         contention  raised  by Mr. Ramamurthi  is  also,  therefore,         repelled.             The 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,         331(b)         1975 promulgated under clause (1) of Art. 359 of the Consti-         tution 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.             For  the foregoing reasons, we do not find any merit  in         this  appeal which is dismissed but in the circumstances  of         the  case  without any order as to costs.  Counsel  for  the         appellants  submits that he may be given time  for  vacating         the  premises.  We grant time till 31st August 1977  on  the         undertaking given by the counsel that vacant possession will         be given on or before that date.         M.R.                                  Appeal dismissed.         332