REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.         8597     OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 26925 OF 2011)

RAM KRISHAN GROVER AND OTHERS ….. APPELLANT(S)

VERSUS

UNION OF INDIA AND OTHERS ….. RESPONDENT(S)

W I T H

CIVIL APPEAL NO.         8598     OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28107 OF 2011)

CIVIL APPEAL NO.         8599                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28371 OF 2011)

CIVIL APPEAL NO.         8600                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 28593 OF 2011)

CIVIL APPEAL NO.         8601                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 31284 OF 2011)

CIVIL APPEAL NO.         8602                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2091 OF 2012)

CIVIL APPEAL NO.         8603                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 34304 OF 2012)

CIVIL APPEAL NO.         8604                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 17458 OF 2013)

A N D

CIVIL APPEAL NO.         8605                OF 2019 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 35980 OF 2013)

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 1 of 46

J U D G M E N T

SANJIV KHANNA, J.

Leave granted.

2. The afore-captioned appeals are by tenants of different residential

and non-residential buildings in the Union Territory of Chandigarh

and urban areas in the State of Punjab, who have challenged the

constitutional validity of Section 13-B of the East Punjab Urban

Rent  Restriction  Act,  1949  (for  short,  the  ‘Rent  Act’)  and  its

extension  to  the  Union  Territory  of  Chandigarh  by  the  Central

Government  vide  Notification  dated  09.10.2009  in  exercise  of

powers under Section 87 of the Punjab Reorganisation Act, 1966

(for short, the ‘Reorganisation Act’).

3. Section 13-B of the Rent Act, reads as under:

“13-B. Right to recover immediate possession of residential  building  or  scheduled  building  and/or non-residential building to accrue to Non-resident Indian.—  (1)  Where  an  owner  is  a  Non-Resident Indian and returns to India and the residential building or  scheduled building and/or  non-residential  building, as the case may be, let out by him or her, is required for his or her use, or for the use of any one ordinarily living with and dependent  on him or  her,  he or  she, may apply to the Controller for immediate possession of such building or buildings, as the case may be:

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 2 of 46

Provided that a right to apply in respect of such a building under this Section, shall be available only after a period of five years from the date of becoming the owner of  such a building and shall  be available only once during the life time of such an owner.

(2) Where the owner referred to in sub-section (1), has let out more than one residential building or scheduled building and/or non-residential building, it shall be open to him or her to make an application under that sub- section in  respect  of  only  one residential  building  or one  scheduled  building  and/or  one  non-residential building, each chosen by him or her.

(3) Where an owner recovers possession of a building under  this  Section,  he  or  she  shall  not  transfer  it through sale or any other means or let it out before the expiry of a period of five years from the date of taking possession  of  the  said  building,  failing  which,  the evicted tenant may apply to the Controller for an order directing that he shall be restored the possession of the said building and the Controller  shall  make an order accordingly."

The expression ‘Non-Resident Indian’ has been defined in

clause (dd) to Section 2 of the Rent Act and reads:

“(dd) "Non-resident Indian" means a person of Indian origin, who is either permanently or temporarily settled outside India in either case –

(a) for or on taking up employment outside India; or

(b) for carrying on a business or vocation outside India; or

(c) for any other purpose, in such circumstances, as would indicate his intention to stay outside India for an uncertain period;”

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 3 of 46

Section 13-B of the Rent Act gives a right to Non-Resident

Indians  to  recover  immediate  possession  of  residential/

scheduled/non-residential buildings situated in the Union Territory

of  Chandigarh  and  urban areas  in  the  State  of  Punjab  on  the

satisfaction  of  the  conditions  stated.  We  shall  elaborate  the

provisions  subsequently  and  would  first  refer  to  the  legislative

history and procedure adopted for enforcement of the challenged

provisions in the Union Territory of Chandigarh.

4.  In 1956, the unified State of Punjab was created by merging the

erstwhile States of Pepsu and Punjab. In 1966, a new State of

Haryana was created and carved out of certain territories from the

State of Punjab. Certain hill areas of Punjab were merged in the

Union  Territory  of  Himachal  Pradesh.  A new Union  Territory  of

Chandigarh was created and became the joint capital of Punjab

and  Haryana.  The  Reorganisation  Act,  that  is,  the  Punjab

Reorganisation  Act,  1966  gave  effect  to  the  proposals  vide

provisions  relating  to  the  delimitation  of  territories.  Another

important  aspect  of  the  Reorganisation  Act  dealt  with  the

applicability  of  laws  in  territories  that  had  undergone

reorganisation. This was effected by Part X of the Reorganisation

Act comprising of Sections 86 to 97. Sections 87, 88 and 89 of the

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 4 of 46

Reorganisation Act are relevant for the present decision and are

reproduced below:

“87.  Power to extend enactments to Chandigarh – The Central  Government  may,  by  notification  in  the  Official Gazette, extend with such restrictions or modifications as it  thinks  fit,  to  the  Union  territory  of  Chandigarh  any enactment which is in force in a State at the date of the notification.

88. Territorial  extent of  laws.—The provisions of  Part  II shall not be deemed to have effected any change in the territories to which any law in force immediately before the  appointed  day  extends  or  applies,  and  territorial references in any such law to the State of Punjab shall, until  otherwise  provided  by  a  competent  legislature  or other competent authority, be construed as meaning the territories  within  the  State  immediately  before  the appointed day.

89. Power to adapt laws.—For the purpose of facilitating the  application  in  relation  to  the  State  of  Punjab  or Haryana or to the Union Territory of Himachal Pradesh or Chandigarh of any law made before the appointed day, the appropriate Government may, before the expiration of two years from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment,  as  may  be  necessary  or  expedient,  and thereupon every such law shall have effect subject to the adaptations  and  modifications  so  made  until  altered, repealed or amended by a competent legislature or other competent authority.”

We  shall  subsequently  elucidate  on  the  sections,  with

specific reference to Section 87 of the Reorganisation Act.  

5. Territories  originally  comprised  in  the  former  province  of  East

Punjab  and  later  designated  as  the  State  of  Punjab  were

governed  by  the  Rent  Act,  which  applied  to  all  “urban  areas”

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 5 of 46

defined in Section 2(j) as any area administered by a municipal

committee,  a  cantonment  board,  a  town committee or  an area

notified  by  the  State  Government  as  an  “urban  area”  for  the

purposes of the Rent Act.  

6. Central Government in exercise of power under Section 89 of the

Reorganisation  Act  had  issued  the  Punjab  Reorganisation

(Chandigarh)  (Adaptation  of  Laws  on  State  and  Concurrent

Subjects) Order, 1968 with effect from 1.11.1966 whereby in all

the  “existing  laws”  in  its  application  to  the  Union  Territory  of

Chandigarh, any reference to the State of Punjab should be read

as  a  reference  to  the  Union  Territory  of  Chandigarh.  The

expression  “existing  laws”  was  defined  in  para  2(1)(b)  of  the

Order. It is an accepted position that the Rent Act was not a part of

the  “existing  laws”  as  the  area  forming  the  Union  Territory  of

Chandigarh was not an “urban area” within the Rent Act.  

7. The  Central  Government  by  Notification  dated  13.10.1972  and

published in the Official Gazette on 04.11.1972 had declared the

area comprising of  the Union Territory  of  Chandigarh to  be an

“urban area” for the Rent Act. This Notification was struck down by

the Punjab and Haryana High Court in Harkishan Singh v. Union

of India1,  on the short ground that no notification extending the

1 AIR 1975 Punj. & Har 160 (FB) Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 6 of 46

Rent Act to the Union Territory of Chandigarh as an “urban area”

under Section 2(j) of the Rent Act could have been issued post

reorganisation on 1.11.1966. The Rent Act was not operative in

Chandigarh in terms of Section 88 of the Reorganisation Act nor

any part would become operative by a notification under Section

87 without necessary adaptation. Thus, neither the Order nor the

Notification dated 13.10.1972 could have the effect of making the

Rent Act applicable to the Union Territory of Chandigarh.

8. The Parliament had thereupon to rectify the defect exercised its

power under Article 246(4) of the Constitution by enacting the East

Punjab  Urban  Rent  Restriction  (Extension  to  Chandigarh)  Act,

1974 (for short, the ‘Extension Act’) to extend the Rent Act, subject

to modification specified in the Schedule, to the Union Territory of

Chandigarh.  This  enactment  had  stipulated  that  the  Rent  Act

would be deemed to be in force from 04.11.1972, that is the day

on which the earlier Notification that was quashed in  Harkishan

Singh’s case  (supra),  was  made  effective.  Thereby  all

proceedings for eviction initiated in view of the Notification dated

04.11.1972 were regularised. The Extension Act was in principle

and  substance  a  Parliamentary  enactment  to  incorporate  by

reference and to avoid repetition all the provisions of the Rent Act

to the Union Territory of Chandigarh.  Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 7 of 46

9. On  17.12.1976,  when  the  Parliament  was  not  in  session,  the

President had promulgated Ordinance 14 of 1976 by which the

Rent Act was amended by the introduction of an Explanation and

addition of sub-section (4A) to Section 13 and sub-section (2A) to

Section 19. New sections 13A, 18A and 18B were inserted and in

Schedule II the form of summons to be issued under Section 13A

was added. This Ordinance was allowed to lapse and was not

enacted as law thereafter.

10. In 1982, the Parliament passed the East Punjab Rent Restriction

(Chandigarh Amendment) Act replacing the words “East Punjab”

with the word “Punjab” and by substituting the definition of “non-

residential building” in the Rent Act as applicable to Chandigarh.

Lapsed amendments to the Rent Act vide Ordinance 14 of 1976

were not incorporated.

11. In 1985, the provisions of the Rent Act as applicable to the State

of Punjab were amended by the Legislature of the State of Punjab

vide Punjab Act 2 of 1985 by inserting new Sections 13A, 18A and

18B, a new Second Schedule and amendments in Sections 13

and 19 substantially similar  to those that  had been effected by

Ordinance 14 of 1976. A new definition of “specified landlord” was

also added. These amendments came into force on 16.11.1985. Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 8 of 46

12. Central  Government  thereafter  issued  Notification  dated

15.12.1986 purportedly in exercise of the power under Section 87

of the Reorganisation Act extending the provisions of the Punjab

Act 2 of 1985, subject to the modifications mentioned therein, to

the Rent Act applicable to the Union Territory of Chandigarh, that

is, the Extension Act.

13. The  extension  whether  permissible  by  means  of  a  notification

issued  under  Section  87  of  the  Reorganisation  Act  was

challenged, but rejected by this Court in Ramesh Birch v. Union

of India2. We shall subsequently refer to this judgment.

 14. The provision under  challenge before us,  namely  Section 13-B

was  inserted  in  the  Rent  Act  vide  East  Punjab  Urban  Rent

Restriction  (Amendment)  Act,  2001  (for  short,  the  ‘Amendment

Act’) as enacted by the State Legislature of Punjab. Section 13-B

and other related sections in the Amendment Act were extended

to the Union Territory of Chandigarh by the Central Government

vide Notification dated 09.10.2009 in purported exercise of powers

under Section 87 of the Reorganisation Act.

15. To avoid prolixity, we do not propose to refer to the factual matrix

as after hearing arguments we had declined to interfere on facts

2 1989 Supp (1) SCC 430 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 9 of 46

and had heard arguments on legal issues that can be summarised

as under:  

(i) The  Notification  dated  09.10.2009  which  extends  the

Amendment  Act  to  Chandigarh  by  an  executive  action  in

exercise of powers under Section 87 of the Reorganisation

Act  amounts  to  and  suffers  from  the  vice  of  excessive

delegation  as  it  amends  the  rent  legislation  in  force  in

Chandigarh, that is, the Extension Act were enacted by the

Parliament in exercise of powers under Article 246(4) of the

Constitution.  

(ii) The State Legislature of Punjab was incompetent to enact

the Amendment Act, for the subject matter and rights of Non-

Resident  Indians  fall  under  the  field  of  ‘Citizenship,

Naturalization  and  Aliens’ under  Entry  17  of  List  I;

‘Extradition’ under Entry 18 of List I and ‘Admission into, and

Emigration and Expulsion from India; Passports and Visas’

under  Entry  19  of  List  I  of  the  Seventh  Schedule.  The

subject  matter  of  legislation  is  in  direct  conflict  with  and

repugnant  to  various  Central  enactments  concerning  the

rights of Non-Resident Indians including the Citizenship Act,

1955  and  the  Foreign  Exchange Management  Act,  1999,

etc. Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 10 of 46

(iii) Section  13-B  which  gives  a  preferential  right  to  claim

eviction to Non-Residents, including foreigners, is arbitrary,

unreasonable  and  discriminatory,  and  creates  an  artificial

classification  for  benefit  of  Non-Residents  vis-à-vis  Indian

Residents and thus, violates Article 14 of the Constitution.

For the sake of convenience and clarity, we shall deal with

each  of  the  respective  submissions  and  give  our  reasons

separately.  

A. Whether Notification dated 09.10.2009 issued under Section 87 of the Reorganisation Act extending Section 13-B of the Rent Act to Chandigarh by executive action is invalid?

16. In  Ramesh Birch (supra), earlier Constitutional Bench judgment

of  this  Court  in  Re  Delhi  Laws  Act  1912,  Ajmer  Merwara

(Extension of Laws) Act, 1947 and Part C States (Laws) Act,

19503 was  examined  and  elucidated  after  considering  seven

different opinions of Kania, CJ., Fazl Ali, Patanjali Sastri, Mahajan,

Mukherjea, Das and Bose JJ. All  the Judges except Kania, CJ.

and Mahajan, J. had upheld provisions of Section 7 of the Delhi

Laws Act,  1912, Section 2 of  the Ajmer Merwara (Extension of

Laws) Act, 1947 and the first portion of Section 2 of Part C States

(Laws) Act. However, Bose and Mukherjea, JJ. had for reasons

3 AIR 1951 SC 332 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 11 of 46

stated by them formed the majority with Kania, CJ. and Mahajan,

J.  in  striking  down second part  of  Section  2  of  Part  C  States

(Laws)  Act,  1950  by  which  the  executive  had  been  given  the

power to make a provision in any enactment so extended for the

repeal  or  amendment  of  any  corresponding  law  (other  than  a

Central Act) which was for the time being applicable to that Part C

State. This part of Section 2, it was observed, suffers from the vice

of  excessive  delegation  and  abdication  of  power  by  the

Legislature. On the touchstone of an earlier decision of the Privy

Council in R. v. Burah4, this Court in Ramesh Birch (supra) had

upheld constitutional validity of Section 87 of the Reorganisation

Act, holding it to be valid on the ‘policy and guideline’ theory if one

has proper regard to the context of the Reorganisation Act and the

object and purpose sought to be achieved by Section 87 of the

Reorganisation Act.  It was observed:

“23. But, these niceties apart, we think that Section 87 is quite valid even on the “policy and guideline” theory if one has proper regard to the context of the Act and the object and purpose sought to be achieved by Section 87 of the Act. The judicial decisions referred to above make it clear that it is not necessary that the legislature should “dot all the i's and cross all the t's” of its policy. It is sufficient if it gives  the  broadest  indication  of  a  general  policy  of  the legislature. If we bear this in mind and have regard to the history of this type of legislation, there will be no difficulty at all. Section 87, like the provisions of Acts I, II and III, is a provision necessitated by changes resulting in territories coming  under  the  legislative  jurisdiction  of  the  Centre.

4 (1878) 5 Ind App 178 (PC).   Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 12 of 46

These are territories  situated in  the midst  of  contiguous territories which have a proper legislature. They are small territories  falling  under  the  legislative  jurisdiction  of Parliament which has hardly sufficient time to look after the details of all  their legislative needs and requirements. To require or expect Parliament to legislate for them will entail a disproportionate pressure on its legislative schedule. It will also mean the unnecessary utilisation of the time of a large number of members of Parliament for, except the few (less than ten) members returned to Parliament from the Union territory, none else is likely to be interested in such legislation. In such a situation, the most convenient course of legislating for them is the adaptation, by extension,  of laws in force in other areas of the country. As Fazl Ali, J. pointed out in the Delhi Laws Act case [AIR 1951 SC 332 : 1951 SCR 747]  it  is  not  a  power  to  make laws that  is delegated but only a power to “transplant” laws already in force after having undergone scrutiny by Parliament or one of the State legislatures, and that too, without any material change. There is no dispute before us — and it has been unanimously held in all the decisions — that the power to make modifications and restrictions in a clause of this type is a very limited power, which permits only changes that the  different  context  requires  and  not  changes  in substance. There is certainly no power of modification by way of repeal or amendment as is available under Section 89.”

17. Ramesh Birch (supra) had held that once a policy of extension of

the Rent Act is clear and permissible, it would seem only natural

as a necessary corollary that the executive should be permitted to

extend future amendments in the Rent Act to the Union Territory of

Chandigarh. After extensively examining the different judgments

and  the  views  expressed  in  Re  Delhi  Laws  Act (supra),  the

notification was upheld with the following findings:

“31.  There  is  certainly  a  good  deal  of  force  in  these arguments but we think that they proceed on an incorrect

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 13 of 46

view  of  the  effect  of  the  notification  impugned  in  the present case. We might have been inclined to accept the submissions of the learned Counsel had the effect of the notification been to extend law which is in “actual conflict” with any parliamentary enactment or which has the effect of “throwing out” any existing law in the Union territory. To borrow an expression used in an analogous context,  we would  have  considered  the  validity  of  the  extension doubtful had the extended provisions been repugnant to an Act of Parliament in force in the Union territory. So long as that is not the effect or result, we think, there is no reason to  construe  the  scope  of  Section  87  in  the  restricted manner  suggested  by  counsel.  It  is  no  doubt  true  that Section 87 permits an extension because there is no law in the Union territory in  relation to a particular  subject  and Parliament  has  not  the  requisite  time  to  attend  to  the matter  because  of  its  preoccupations.  But  this  purpose does  not  require  for  its  validity  that  there should  be no existing law of Parliament  at  all  on a subject.  Again the concept of “subject” for the purposes of this argument is also an elastic one the precise scope of which cannot be defined. The concept of vacuum is as much relevant to a case where there is absence of a particular provision in an existing law as to a case where there is no existing law at all  in  the  Union  territory  on  a  subject.  For  instance,  if Parliament  had  not  enacted  the  1974  Act  but  had  only enacted an extension of  the Transfer  of  Property  Act  to Chandigarh,  could  it  have  been  said  that  a  subsequent notification cannot extend the provisions of the 1949 Act to Chandigarh because the subject of leases is governed by the  Transfer  of  Property  Act  which  has  been  already extended and there is, therefore, no “vacuum” left  which could  be  filled  in  by  such  extension  ?  Again,  suppose, initially, a Rent Act is extended by Parliament which does not contain a provision regarding one of the grounds on which a landlord can seek eviction — say, one enabling the owner to get back his house for reoccupation — and then  the  Government  thinks  that  another  enactment containing such a provision may also be extended, can it not be plausibly said that the latter is a matter on which there is no legislation enacted in the territory and that the extension of  the  latter  enactment  only  fills  up  a void  or vacancy ? Again, suppose the provisions of a general code like, say, the Code of Civil Procedure are extended to the

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 14 of 46

Union territory,  should  we construe Section 87 so as to preclude the extension of a later amendment to one of the rules to one of the orders of the CPC merely on the ground that it will have effect of varying or amending an existing law? We think it would not be correct to thus unduly restrict the scope of a provision like Section 87. The better way to put the principle, we think, is to say that the extension of an enactment which makes additions to the existing law would also be permissible under Section 87 so long as it does not, expressly or impliedly, repeal or conflict with, or is not repugnant to, an already existing law. In this context, reference can usefully be made to the observations in Hari Shankar Bagla [Harishankar Bagla v. State of M.P., (1955) 1 SCR 380]  at  p.  391,  which seem to countenance the “bypassing”  of  an  existing  law  by  a  piece  of  delegated legislation and to draw the line only at its attempt to repeal the existing law, expressly or by necessary implication. In a sense, no doubt, any addition, however small, does amend or vary the existing law but so long as it does not really detract from or conflict with it,  there is no reason why it should not  stand alongside the existing law.  In our view Section 87 should be interpreted constructively so as to permit its object being achieved rather than in a manner that will detract from its efficacy or purpose. We may also note,  incidentally  in  legislative  practice  also,  such successive changes have been allowed to stand together. Lachmi  Narain  v.  Union  of  India [(1976)  2  SCC  953] narrates  how the Bengal  Finance (Sales Tax)  Act,  1941 extended to Delhi under Act III was subsequently amended by Parliament Acts of 1956 and 1959 but was also sought to be modified by various notifications from time to time. These notifications were challenged on the ground that the power  to  extend by  notification  could  be  exercised  only once  and  that  the  impugned  notification  did  not  merely extend  but  also  effected  modifications  of  a  substantial nature in  the Act  sought  to  be extended.  No contention was,  however,  raised  that  after  the  intervention  of Parliament in 1956 and 1959 there could have been no extension of the Bengal Act as it would have the effect of adding  to  or  varying  the  Parliamentary  legislation apparently  because  they  could  stand  side  by  side  with each other. We, therefore, think that since the extension of the 1985 Act only adds provisions in respect of aspects not covered by the 1974 Act and in a manner not inconsistent

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 15 of 46

therewith, the impugned notification is quite valid and not liable to be struck down.”

18. The  distinction  between  conditional  legislation  and  delegated

legislation  was  explained  by  this  Court  in  Vasu  Dev  Singh  v.

Union of India5 in the following words:  

“16. … The distinction between conditional legislation and delegated  legislation  is  clear  and  unambiguous.  In  a conditional legislation the delegatee has to apply the law to an area or to determine the time and manner of carrying it into effect or at such time, as it decides or to understand the rule of legislation, it would be a conditional legislation. The legislature in such a case makes the law,  which is complete in all respects but the same is not brought into operation immediately. The enforcement of the law would depend  upon  the  fulfilment  of  a  condition  and  what  is delegated to the executive is the authority to determine by exercising its own judgment as to whether such conditions have been fulfilled and/or the time has come when such legislation should be brought into force. The taking effect of a  legislation,  therefore,  is  made  dependent  upon  the determination of  such fact  or  condition by the executive organ of the Government. Delegated legislation, however, involves delegation of rule-making power of legislation and authorises an executive authority to bring in force such an area by reason thereof.  The discretion conferred on the executive by way of delegated legislation is much wider. Such power to make rules or regulations, however, must be exercised within the four corners of the Act. Delegated legislation, thus, is a device which has been fashioned by the legislature to be exercised in the manner laid down in the legislation itself...  

17.  In  Hamdard  Dawakhana v.  Union  of  India6 this Court stated:  

“The  distinction  between  conditional  legislation  and delegated  legislation  is  this  that  in  the  former  the delegate’s  power  is  that  of  determining  when  a

5 (2006) 12 SCC 753 6 AIR 1960 SC 554 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 16 of 46

legislative  declared  rule  of  conduct  shall  become effective; Hampton & Co. v. U.S. and the latter involves delegation of rule-making power which constitutionally may  be  exercised  by  the  administrative  agent.  This means that the legislature having laid down the broad principles of its policy in the legislation can then leave the  details  to  be  supplied  by  the  administrative authority.  In other words by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute and in the case of conditional legislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external authority the time and manner of  carrying  its  legislation  into  effect  as  also  the determination of the area to which it is to extend;””

In the present case, the extension of the Amendment Act to

the  Union  Territory  of  Chandigarh  falls  within  the  ambit  of

conditional delegation and is valid and permissible.

19. In light of the aforesaid decisions and for the same reasons as

stated  in  Ramesh  Birch  (supra),  we  would  reject  the  first

contention raised by the appellants. Once a policy of extension of

laws  has  been  laid  down  by  the  Parliament  and  is  clear  and

permissible, it  would only seem as an inevitable fallout that the

executive should be permitted to extend future amendments to the

existing laws. Therefore, the challenge predicated on the doctrine

of excessive delegation, separation of powers, doctrine of the law

of agency, fails and must be rejected.  Such challenge must also

be rejected in view of the large number of eviction suits filed by

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 17 of 46

Non-Resident  Indian  landlords  on  the  strength  of  Notification

dated 09.10.2009 who would be left remediless if contentions to

the contrary are accepted.  

B. Whether  amendments  made  vide  the  Amendment  Act  with regard  to  the  rights  of  Non-Resident  Indians  by  the  State Legislature of Punjab were beyond its competence?

20. The  contention  that  the  Amendment  Act  enacted  by  the  State

Legislature of Punjab has overstepped the jurisdiction assigned to

it  or  has encroached upon a forbidden field is  determinable by

finding out the true nature and character or pith and substance of

the Amendment Act which turns upon construction of the entries in

the  legislative  Lists  under  the  Seventh  Schedule  of  the

Constitution.

 21. Relevant entries from the three Lists which are germane to the

determination of nature and character of the Amendment Act are:

List I

Entry 17 – Citizenship, naturalisation and aliens.

Entry 18 – Extradition.

Entry 19 –  Admission into,  and emigration and expulsion

from, India; passports and visas.

List II

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 18 of 46

Entry 18 –  Land, that is to say, rights in or over land, land

tenures including the relation of landlord and tenant, and the

collection  of  rents;  transfer  and  alienation  of  agricultural

land;  land  improvement  and  agricultural  loans;  and

colonization.

List III

Entry 6 –  Transfer of property other than agricultural land;

registration of deeds and documents.

Entry 7 – Contracts including partnership, agency, contracts

of  carriage,  and other  special  forms of  contracts,  but  not

including contracts relating to agricultural land.

Entry 13 – Civil procedure, including all matters included in

the Code of Civil  Procedure at the commencement of this

Constitution, limitation and arbitration.

22. The entries in the three Lists are not mutually exclusive. Further,

the entries are fields of legislation that demarcate the area and

heads of legislation. Accordingly, they should receive the widest

construction unless their rigour and import need to be castrated by

competing  entries  and  other  parts  of  the  Constitution.

Interpretation of each entry has to be fair and liberal so as to cover

all incidental and subsidiary matters which can reasonably be said Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 19 of 46

to  have  been  comprehended  in  it.  The  entries  should  not  be

interpreted in a narrow and pedantic sense. “Pith and substance”

doctrine states that if the legislation is covered by an entry, that is,

it  is  within  the  permitted  jurisdiction  of  the  legislature,  any

incidental encroachment in the rival field has to be disregarded.

Only when wide construction of an entry leads to heads-on-clash

with another entry in the same or different List,  the principle of

harmonious construction applies to reconcile the conflict  and to

give effect to each of them.  

23. Repugnancy arises between a Central and a State Act when there

is a direct and irreconcilable conflict between the two enactments.

It  is  when  there  is  an  irreconcilable  conflict  between  the  two

legislations that the Central Legislation prevails by virtue of Article

254 of the Constitution. Such repugnancy or inconsistency is not

to  be  readily  inferred  as  the  entries  in  the  three  Lists  permit

incidental  encroachment.  Consequently,  every  attempt  must  be

made  to  placate  the  conflict  and  only  when  and  in  case  of

oppugnant  clash,  the  Court  should  proceed to  strike  down the

legislation as trespassing beyond its legitimate and legal confines.

24. In Vijay Kumar Sharma and Others v. State of Karnataka and

Others7, this Court referring to the  “pith and substance” doctrine

7 (1990) 2 SCC 562 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 20 of 46

had held that a provision in a particular legislation in order to give

effect to its dominant purpose may incidentally encroach on the

same  subject  matter  as  covered  by  the  provision  of  another

legislation. Such partial coverage of the same area in a different

context and to achieve a different purpose does not bring about

the repugnancy which is intended to be covered by Article 254(2).

Both the legislations must be substantially on the same subject

matter  for  repugnancy to arise and to attract  Article 254. If  the

subject  matters  covered  by  the  legislations  are  different,  then

merely  because  the  two  legislations  refer  to  some  allied  or

cognate subjects, they do not cover the same field.

25. A Constitutional Bench judgment of this Court in  Indu Bhushan

Bose  v.  Rama  Sundari  Debi  and  Another8 had  inter  alia

examined Entry 3 in List I, Entry 18 in List II and Entries 6, 7 and

13 in List III  to observe that the general power of legislating in

respect of relationship between landlord and tenant can be traced

either under Entry 18 of List II or Entries 6 and 7 of List III. The

expression  ‘land  tenures  including  the  relation  of  landlord  and

tenant’ appearing in Entry 18 of List II, it was observed, was used

only with reference to the relationship of landlord and tenant in

respect of vacant lands and does not cover tenancy of buildings or

house  accommodation.  Nevertheless,  the  Court  did  not  give  a

8 (1969) 2 SCC 289 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 21 of 46

finding in definite terms as the relationship of landlord and tenant

in question was in respect of a house accommodation situated in

a cantonment area and therefore was covered by Entry 3 of List I

which vests  exclusive power  to  make laws for  the  cantonment

areas in the Parliament. Subsequent decision in Jaisingh Jairam

Tyagi and Others v. Mamanchand Ratilal Agarwal and Others9

and a Constitution Bench judgment in  V. Dhanapal Chettiar  v.

Yesodai Ammal10 substantially follow  Indu Bhushan (supra) to

hold that the subject matter of housing and accommodation falls

within the purview of the Concurrent List.  

26. In Accountant and Secretarial Services Pvt. Ltd. and Another

v.  Union of  India  and  Others11,  this  Court  had  examined the

question  of  repugnancy  and  interplay  between  the  Central

enactment,  viz.  the  Public  Premises  (Eviction  of  Unauthorised

Occupants) Act, 1971 based on the pattern of the West Bengal

Public Land (Eviction of Unauthorised Occupants) Act, 1962 and

the West Bengal Premises Tenancy Act,  1956 and the question

which  of  these  enactments  would  prevail.  The  Court  had

interpreted Entries 3, 32, 43 and 44 of List I, Entry 18 of List II and

Entries 5, 6 and 7 of the List III and the corresponding entries in

the  Government  of  India  Act,  1935  to  hold  that  all  the  three

9 (1980) 3 SCC 162 10 (1979) 4 SCC 214 11 (1988) 4 SCC 324 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 22 of 46

legislations  were  passed  in  exercise  of  powers  conferred  with

respect to matters contained in the Concurrent List. In view of the

repugnancy and conflict between the Central enactment on one

hand and the State law on the other, in terms of Article 254, the

Central  enactment  shall  prevail.  Further,  notwithstanding  the

earlier precedents, the Court had examined the question of the

relevant entry applicable to the tenancy legislation and rejected

the contention that  Entry 18 of  List  II  should be interpreted as

encompassing within  its  ambit  legislation on the relationship  of

landlord and tenant in regard to housing and buildings. Setting out

several  reasons  it  was  observed  that  the  power  to  legislate  in

respect  of  tenanted  premises  would  fall  within  the  ambit  and

scope of Entries 6, 7 and 13 of the Concurrent List and would not

be referable to Entry 18 of List II. The expression ‘land’ in Entry 18

of List II should be given as wide a construction as possible, but

has  to  be  read  with  the  relevant  entries  in  other  Lists  to  give

meaning and content  to  all  of  them.  Inclusion of  buildings and

housing  in  the  Concurrent  List  is  appropriate  and  to  place

buildings and housing within the ambit of the expression ‘land’ in

Entry 18 of List  II  would denude other entries in Lists I  and III

concerning transfer of property, devolution and succession of land

and buildings, etc. of their vigour and would render them otiose.

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 23 of 46

27. The Amendment Act on its true construction and by reference to

the doctrine of “pith and substance” is relatable to the relationship

of landlord and tenant for housing and accommodation and falls

under  the Concurrent  List.  The dominant  intention or  “pith  and

substance” of  the  legislation  is  to  regulate  the  relationship

between Non-Resident Indian landlords and tenants for housing

and  accommodation.  Merely  because  the  Amendment  Act  to

achieve its object touches upon the subject matter in respect of

Non-Resident Indian landlords in the Rent Act, does not make the

Amendment or the Rent Act ultra vires the Constitution. The Rent

Act  as  amended  by  the  Amendment  Act  and  the  Central

legislations relating to citizenship, regulation of the right of non-

residents to own and acquire immovable property, cover different

subject  matters  and  serve  different  objects  and  there  is  no

repugnancy between the Rent Act and any Central enactment like

Citizenship Act, Foreign Exchange Regulation Act, etc. We do not

subscribe to the view that the legislative lists under the Seventh

Schedule  envisage  and  mandate  separate  legislation  by  the

Central Government for Non-Resident Indian landlords.

28. Keeping  in  view  the  aforesaid  position,  the  Amendment  Act

enacted by the State legislature was well within its competence.

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 24 of 46

We would, however, note that in the context of the Union Territory

of  Chandigarh  and  as  the  subject  matter  falls  within  the

Concurrent List, it will be immaterial to decide on the competence

of the legislating body. The power to make laws in respect of a

Union Territory vests with the Parliament under Article 246(4). In

terms of Section 87 of the Reorganisation Act, the power to extend

laws to the Union Territory of Chandigarh vests with the Central

Government, that is the Parliament or the Central Executive, as

the case may be, and is permissible.

C. Whether  Section  13-B  of  the  Rent  Act  is  arbitrary  and unreasonable  inasmuch  as  it  does  not  afford  any  legal remedy to the tenants?

29. Before we delve into this question, we would reproduce Section

19(2-B) of the Rent Act which reads as under:

“19.  (2-B) The owner,  who is  a  Non-Resident  Indian and  who  having  evicted  a  tenant  from  a  residential building or a scheduled building and/or non-residential building in pursuance of an order made under Section 13-B,  does  not  occupy  it  for  a  continuous  period  of three months from the date of such eviction, or lets out the whole or any part of such building from which the tenant was evicted to any person, other than the tenant in contravention of the provisions of sub-section (3) of Section 13-B,  shall  be punishable  with  imprisonment for a term, which may extend to six months or with fine which  may  be  extended  to  one  thousand  rupees  or both.”

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 25 of 46

The  provision  incorporates  statutory  safeguards  to  check

and penalise deceitful and two-faced landlords and gives the right

of restitution to the defrauded tenant.

30. Section 18-A of the Rent Act prescribes a summary procedure for

recovery  of  possession  applicable  to  eviction  petitions  filed  by

Non-Resident Indian landlords under Section 13-B of the Rent Act.

Sub-sections (4), (5), (6) and (8) to Section 18-A of the Rent Act

are reproduced:  

“18-A. (4) The tenant on whom the service of summons has been declared to have been validly made under sub-section  (3),  shall  have  no  right  to  contest  the prayer  for  eviction  from  the  residential  building  or scheduled building and/or non-residential  building, as the case may be, unless he files an affidavit stating the grounds on which he seeks to contest the application for  eviction and obtains leave from the Controller  as hereinafter provided, and in default of his appearance in  pursuance of  the  summons or  his  obtaining  such leave, the statement made by the specified landlord or, as  the  case  may  be,  the  widow,  widower,  child, grandchild  or  the  widowed  daughter-in-law  of  such specified landlord or the owner, who is a non-resident Indian in the application for eviction shall be deemed to be admitted by the tenant and the applicant shall  be entitled to an order for eviction of the tenant.

(5)  The  Controller  may  give  to  the  tenant  leave  to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the specified landlord or, as the case may be, the widow, widower, child,  grandchild or  widowed daughter-in-law of  such specified landlord or the owner, who is a non-resident Indian,  from  obtaining  an  order  for  the  recovery  of possession  of  the  residential  building  or  scheduled

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 26 of 46

building  and/or  non-residential  building,  as  the  case may be, under Section 13-A or Section 13-B.

(6) Where leave is granted to the tenant to contest the application, the Controller shall commence the hearing on a date not later than one month from the date on which  leave  is  granted  to  the  tenant  to  contest  and shall  hear  the  application  from  day  to  day  till  the hearing is concluded and application decided.

xx xx xx

(8) No appeal or second appeal shall lie against an order for the recovery of possession of any residential building  or  scheduled  building  and/or  non-residential building, as the case may be, made by the Controller in accordance with the procedure specified in this section:

Provided that the High Court may, for the purpose of satisfying itself  that  an order made by the Controller under this section is in accordance with law, call for the records  of  the case and pass  such order  in  respect thereto as it thinks fit.”

31. In Baldev Singh Bajwa v. Monish Saini12, this Court referring to

the provisions of Section 18-A of the Rent Act had observed:

“11.  [...]  These  provisions  indicate  that  in  order  to obtain leave to contest the application of the landlord, the tenant has to file an affidavit taking the grounds on which  he  wants  to  contest  that  application.  If  the affidavit  filed  by  the  tenant  discloses  such  facts  as would  disentitle  the  NRI  landlord  from  obtaining  an order  for  the  recovery  of  immediate  possession,  the Controller would grant  leave to the tenant to contest the landlord’s application for eviction. Once the leave is granted, the application is required to be disposed of as per the procedure applicable to the Court of Small Causes. The Controller is required to commence the hearing within one month from the date on which the leave  is  granted  to  the  tenant  to  contest.  The

12 (2005) 12 SCC 778 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 27 of 46

application  shall  be  heard  day  to  day  till  hearing  is concluded and application decided. The order to direct recovery  of  possession  of  the  suit  accommodation made  by  the  Controller  is  not  subject  to  appeal  or second appeal. However, the High Court may call for the record of  the case to satisfy  itself  that  the order passed by the Controller is in accordance with law and may pass such order as it thinks fit.”  

32. In  Ravi Dutt Sharma  v. Ratan Lal Bhargava13, this Court had

discussed the object of rent control legislation and also insertions

made to provide expeditious, effective and speedy remedy for a

class of landlords who require the premises for bona fide use, to

hold:

“7. […] The dominant object of the amending act [is] to provide a speedy, expeditious and effective remedy for a class of landlords contemplated by Sections 14(1)(e) and  14-A and  for  avoiding  unusual  dilatory  process provided  otherwise  by  the  Rent  Act.  It  is  common experience that suits for eviction under the Act take a long  time  commencing  with  the  Rent  Controller  and ending  up  with  the  Supreme  Court.  In  many  cases experience has indicated that by the time the eviction decree became final several years elapsed and either the landlord died or the necessity which provided the cause of action disappeared and if  there was further delay in securing eviction and the family of the landlord had  by  then  expanded,  in  the  absence  of accommodation  the  members  of  the  family  were virtually thrown on the road. It was this mischief which the Legislature intended to avoid by incorporating the new procedure in Chapter III-A. The Legislature in its wisdom  thought  that  in  cases  where  the  landlords required their own premises for bona fide and personal necessity they should be treated as a separate class along with the landlords covered by Section 14-A and should  be  allowed  to  reap  the  fruits  of  decrees  for eviction  within  the  quickest  possible  time.  It  cannot,

13 (1984) 2 SCC 75 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 28 of 46

therefore,  be  said  that  the  classification  of  such landlords would be an unreasonable one because such a classification has got a clear nexus with the objects of the amending Act and the purposes which it seeks to subserve.”

33. Section 18-A of the Rent Act requires the Controller to take up the

matter on a day-to-day basis until the hearing on an application for

leave to defend is concluded. No litigant can possibly object to a

provision  stipulating  day-to-day  hearing  which  ensures  speedy,

expeditious and effective decisions. The observations of this Court

in  Ravi  Dutt  Sharma  (supra)  are  apposite.  Section  18-A also

states that the decision of the Controller is final as no appeal or

second appeal lies against the order of eviction except that the

High  Court  could,  to  satisfy  itself  of  the  correctness  of  the

decision, examine the matter by calling for the records of the case.

Repelling a similar challenge on the ground that 25-B of the Delhi

Rent Control Act, 1958 does not provide for an appeal or second

appeal  against  an  order  of  eviction,  in  Kewal  Singh  v.  Smt.

Lajwanti14 it was observed:

“19. […]  An appeal is purely a creature of the statute and this right has not been given in order to cut out unnecessary delay.  Instead the highest Court of  the State has been given a wide power of revision where the said Court can examine the case of the tenant and the landlord and the validity of the order passed by the Controller.   The  right  of  the  tenant,  therefore,  is sufficiently safeguarded by the proviso to sub-section (8) of S. 25B of the Act referred to above.  In order to

14 (1980) 1 SCC 290  Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 29 of 46

give relief to the tenant against any apparent error of law or fact where no revision has been filed in the High Court  the  statute  confers  power  of  review  on  the Controller.”

34. On the requirement of  ‘bona fide  need’ of  Non-Resident Indian

landlords under Section 13-B in  Baldev Singh Bajwa (supra), it

was elucidated:  

“14. The phrase “bona fide requirement” or “bona fide need”  or  “required  reasonably  in  good  faith”  or “required”, occurs in almost all Rent Control Acts with the  underlying  legislative  intent  which  has  been considered  and  demonstrated  innumerable  times  by various  High  Courts  as  also  by  this  Court,  some of which we would like to refer to. In Ram Dass v. Ishwar Chander it is said that the bona fide need should be genuine and honest,  conceived in good faith.  It  was also indicated that the landlord’s desire for possession, however honest it might otherwise be, has inevitably a subjective element in it, and that desire, to become a “requirement” in law must have the objective element of a “need”, which can be decided only by taking all the relevant  circumstances into consideration so that the protection afforded to a tenant is not rendered illusory or whittled down.

15. In Bega Begum v. Abdul Ahad Khan it was held by this  Court  that  the  words  “reasonable  requirement” undoubtedly postulate that there must be an element of need  as  opposed  to  a  mere  desire  or  wish.  The distinction between desire and need should doubtless be  kept  in  mind  but  not  so  as  to  make  even  the genuine need as nothing but a desire.

16. In Surjit Singh Kalra v. Union of India a three-Judge Bench of this Court has held as under:  

“20. The tenant of course is entitled to raise all relevant contentions as against the claim of the classified  landlords.  The  fact  that  there  is  no reference to the words bona fide requirement in

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 30 of 46

Sections  14-B  to  14-D  does  not  absolve  the landlord  from  proving  that  his  requirement  is bona fide or the tenant from showing that it is not bona fide. In fact every claim for eviction against a tenant must be a bona fide one. There is also enough indication in support of this construction from  the  title  of  Section  25-B  which  states ‘special  procedure  for  the  disposal  of applications for eviction on the ground of  bona fide requirement’.”

17. In  Shiv Sarup Gupta v.  Dr. Mahesh Chand Gupta this Court  while dealing with the aspect of  bona fide requirement has said that the sense of felt need which is  an  outcome  of  a  sincere,  honest  desire,  in contradistinction  with  a  mere  pretence  or  pretext  to evict a tenant, refers to a state of mind prevailing with the landlord. The only way of peeping into the mind of the landlord is an exercise undertaken by the judge of facts by placing himself in the armchair of the landlord and then posing a question to himself — whether in the given facts, substantiated by the landlord, the need to occupy the premises can be said to be natural,  real, sincere and honest.

18.  From the aforesaid  decisions  the  requirement  of the  landlord  of  the  suit  accommodation  is  to  be established as a genuine need and not a pretext to get the  accommodation  vacated.  The  provisions  of Sections 18-A(4) and (5) concede to the tenant’s right to defend the proceedings initiated under Section 13-B showing  that  the  requirement  of  the  landlord  is  not genuine or bona fide. The legislative intent for setting up of a special procedure for NRI landlords is obvious from the  legislative  text  which  has  been deliberately designed  making  distinction  between  the  ordinary landlords  and  special  category  of  landlords.  The Controller’s  power  to  give  leave  to  contest  the application filed under Section 13-B is restricted by the condition that the affidavit filed by the tenant discloses such  fact  as  would  disentitle  the  landlord  from obtaining  an  order  for  recovery  of  possession.  It  is needless to say that in the summary proceedings the tenant’s  right  to  contest  the  application  would  be

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 31 of 46

restricted to the parameters of Section 13-B of the Act. He cannot widen the scope of his defence by relying on any other fact which does not fall within the parameters of Section 13-B. The tenant’s defence is restricted and cannot go beyond the scope of the provisions of the Act applicable to the NRI landlord. Under Section 13-B the landlord is entitled to eviction if he requires the suit accommodation for  his  or  her use or  the use of  the dependant,  who ordinarily  lives with him or  her.  The requirement would necessarily have to be genuine or bona  fide  requirement  and  it  cannot  be  said  that although the requirement is not genuine or bona fide, he would be entitled to the ejectment of the tenant nor can it be said that in no circumstances will the tenant not  be  allowed to  prove  that  the  requirement  of  the landlord is not genuine or bona fide. A tenant’s right to defend the claim of the landlord under Section 13-B for ejectment  would arise if  the tenant  could  be able  to show that the landlord in the proceedings is not an NRI landlord;  that he is not the owner thereof or that his ownership is not for the required period of five years before  the  institution  of  proceedings  and  that  the landlord’s requirement is not bona fide.”

 35. In terms of Section 13-B of the Rent Act, the landlord should have

been the owner of the premises for five years before the eviction

petition is filed. Such landlord/owner is permitted to file an eviction

petition  only  once  during  the  lifetime  and  in  respect  of  one

building. Sub-section (3) to Section 13-B of the Rent Act imposes

a restriction on sale or lease of the premises for a period of five

years  from the  date  of  taking  possession  from the  tenant.  On

breach of the conditions/ restrictions mentioned in sub-section (3)

to  Section  13-B,  the  tenant  has  a  right  to  seek  restoration  of

possession. Sub-section (2-B) to Section 19 imposes a maximum

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 32 of 46

punishment of six months imprisonment or a fine of one thousand

rupees or both in case the landlord does not occupy the premises

for a continuous period of three months after getting an eviction

order or lets out the whole or any part of the premises to a third

person other than the tenant in contravention of the provisions of

sub-section (3) to Section 13-B. The reasoning in  Baldev Singh

Bajwa (supra) exposits that these restrictions and conditions are

strong  in-built  checks  to  ensure  that  the  need  of  the  landlord

should be genuine and  bona fide and the tenant should not be

subjected to  frivolous and dubious eviction order  by relying on

false assertions.

36. The presumption raised with regard to the genuine need of the

landlord as pleaded in the petition should not be read as an axiom

or self-evident truth, which entitles the landlord and mandates the

Court to pass a decree of eviction. This is clear from subsequent

elucidation  by  this  Court  in  paragraphs  20  and  21  in  Baldev

Singh Bajwa (supra). The true ratio, in our opinion, is reflected in

paragraph 25 which reads as under:

“25.  On the interpretation given by us and on a plain reading of the provisions, once in a lifetime possession is  given to  an NRI  to  get  one building vacated in  a summary  manner.  A non-resident  Indian  landlord  is required to prove that: (i) he is an NRI; (ii) that he has returned  to  India  permanently  or  for  a  temporary period; (iii) requirement of the accommodation by him

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 33 of 46

or his dependant is genuine; and (iv) he is the owner of the property for the last five years before the institution of the proceedings for ejectment before the Controller. The tenant’s  affidavit  asking for  leave to  contest  the NRI landlord’s application should confine itself  to the grounds which NRI landlord is required to prove, to get ejectment  under  Section  13-B  of  the  Act.  The Controller’s  power  to  give  leave  to  contest  the application filed under Section 13-B is circumscribed to the  grounds  and inquiry  on  the  aspects  specified  in Section 13-B. The tenant would be entitled for leave to contest only  if  he makes a strong case to challenge those grounds.  Inquiry  would be confined to  Section 13-B and no other aspect shall be considered by the Controller.”

The requirement  of  a  ‘strong  case’ for  obtaining  leave  to

defend means a good case that  brings to fore reasonable and

well-grounded basis on which the tenant seeks leave to contest

the  eviction  proceedings.  It  does  not  mean  setting  up  and

establishing at that stage a case beyond any scintilla of doubt and

debate.  The grounds and pleas raised should reflect  clear  and

strong defence and relate to the grounds mentioned in paragraph

25  in  Baldev  Singh  Bajwa  (supra).  The  standard  applied  is

similar  to  parameters  elucidated  in  Inderjeet  Kaur  v.  Nirpal

Singh15,  in  which this  Court  had held that  the leave to defend

should not be granted on mere asking but when the pleas and

contentions raise triable issues and the dispute on facts demands

that the matter be properly adjudicated after ascertaining the truth

of affidavits filed by the witnesses in their cross-examination. Each

15 (2001) 1 SCC 706 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 34 of 46

case has to be decided on its merits and not on the basis of any

pre-conceived suppositions and presumptions. By providing for a

simplified  procedure  of  eviction  by  the  Non-Resident  Indians,

Section  13-B  does  not  dilute  the  rights  of  tenants.  It  gives  a

chance to the tenants on merits to establish their case and when

justified and necessary to take the matter to trial. By no means,

therefore,  Section  13-B  can  be  held  to  be  arbitrary  and

unreasonable.

37. The  expression  ‘one  building’  appearing  in  sub-clause  (2)  to

Section 13-B was examined by a three Judge Bench of this Court

in  Swami  Nath  v.  Nirmal  Singh16 by  referring  to  the  earlier

judgment  of  this  Court  in  Baldev  Singh  Bajwa  (supra),  to

observe:

“13. Reliance was placed on the decision of this Court in Baldev Singh Bajwa v. Monish Saini where the same question  had  come  up  for  consideration  and  it  was observed that on a plain reading of the provisions of Section 13-B, it would be obvious that once in a lifetime possession  is  given  to  an  NRI  to  get  one  building vacated in a summary manner. It was also submitted that  the  ownership  of  the  respondent  landlord  in respect of only one building had not been disputed by the petitioners and the only contention that was raised on their  behalf  was that  each separate tenancy in a building  would  amount  to  a  separate  unit  and  after exhausting the right  of  summary possession once,  it was no longer available to the NRI landlord to exercise such  an  option  for  the  second  time  to  a  particular

16 (2010) 9 SCC 452 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 35 of 46

building,  which  contention  had  been negated  by  the courts below.

14.  We  have  carefully  considered  the  submissions made on behalf of the respective parties and we are unable to agree with the submissions made on behalf of the petitioners. The interpretation sought to be given to the proviso to Section 13-B(1) of the 1949 Act would lead  to  an  absurd  situation  which  was  not contemplated by the legislature while  introducing the provisions of  Section 13-B by way of  amendment  in 2001.  The  very  object  of  the  amendment  would  be frustrated if the narrow and constricted meaning being canvassed  on  behalf  of  the  petitioners  is  to  be accepted.

15.  The  provisions  of  Section  13-B  of  the  1949  Act have  been  correctly  interpreted  and  dealt  with  in Baldev  Singh  Bajwa  case and  in  that  view  of  the matter,  the  special  leave  petitions  must  fail  and  are dismissed. …”

The third contention is accordingly rejected.  

D. Whether  classifying  Non-Resident  Indian  landlords  as  a separate category renders Section 13-B invalid and ultra vires Article 14 of the Constitution?

38. Legislature’s primary function is to make laws for all or different

groups  or  classes  of  persons.  The  lawmakers  as  elected

representatives are in a better position than any other body which

is  removed  from  local  and  other  circumstances,  to  know  the

needs,  requirements  and  expectations  of  citizens.  It,  therefore,

seems only logical  that  the legislature  possesses the power to

distinguish and classify persons or things subjected to such laws.

Such a classification, however, must pass the muster of Article 14

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which proscribes hostile and invidious discrimination. Recognising

that Article 14 does not entirely prohibit classification by grouping

certain persons with special peculiarities in a special category to

meet certain specific ends, this Court in Ram Krishna Dalmia v.

Justice  S.R.  Tendolkar17 had  postulated  two  conditions  which

must  be  satisfied  for  a  classification  to  withstand  a  challenge

under Article 14, namely: i) the classification should be founded on

intelligible  differentia  which distinguishes persons or  things that

are grouped together from others left out of the group; and (ii) the

differentia  must  have a  rational  relation  or  nexus to  the  object

sought to be achieved by the statute in question. In State of A.P.

and Others  v. Nallamilli  Rami Reddi and Others18,  this Court

had further elucidated that a challenge on the ground of denial of

equal  treatment will  not  sustain when the legislature intends to

classify persons under a well-defined class. A classification need

not  be scientifically  perfect  or  logically  complete  and would  be

justified unless it is palpably arbitrary. The test to judge the validity

of any classification has to be practical and pragmatic by looking

beyond the classification to the purpose of  the law, that is,  the

purpose or object of the legislation and the circumstances which

had  prevailed  when  the  law  was  passed  and  which  had

17 1959 SCR 279: AIR 1958 SC 538 18 (2001) 7 SCC 708 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 37 of 46

necessitated  passing  of  that  law.  Not  only  this,  there  is  a

presumption  as  to  constitutional  validity  of  an  enactment

predicated  on  the  belief  that  the  legislature  understands  and

correctly appreciates the need of its own people and is free to

recognise degrees of harm and may confine its restriction to only

those cases where the need is deemed to be the clearest. The

hardship  that  may  result  from  the  classification  cannot  be  the

basis  for  determining  the  validity  of  any  statute.  This  requires

distinguishing  between  under-inclusiveness  and  over-

inclusiveness. The former classification does not confer the same

benefit  or  place  the  same burden  on  others  who  are  similarly

situated whereas over-inclusiveness includes not only those who

are similarly situated with respect to the purpose but others who

are not  so situated as well.  The latter  is frowned upon but the

former  may  pass  the  judicial  test  for  the  courts  do  exercise

tolerance to under-inclusiveness unless it is clear that there is no

fair reason for the law which would not require with equal force its

extension  to  those  whom  it  leaves  untouched  (See  Pioneer

Urban Land & Infrastructure Limited and Another v. Union of

India and Others  in Writ Petition (Civil) No. 43 of 2019 decided

on 09.08.2019).

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 38 of 46

39. The object and reasons for enacting Section 13-B in the Rent Act

vide the Amendment Act were explained in Baldev Singh Bajwa

(supra) in the following words:   

“The  State  Government  had  been  receiving representations  from  various  NRI  individuals  and through  their  associations  highlighting  the  plight  of Indian  residents  returning  to  India  after  long  years abroad. It was represented that the NRIs having spent long years of  their  life abroad did not find conditions congenial in their own country on their return either to settle down or to take up any business. On account of rigid legal provisions of the existing rent laws, the NRIs were  unable  to  recover  possession  of  their  own residential building from the tenants. The Government having considered the situation had decided that  the existing  rent  legislation  viz.  the  East  Punjab  Urban Rent  Restriction  Act,  1949  should  be  amended  to provide  relief  to  NRIs  to  enable  them  to  recover possession  of  a  residential  or  scheduled  building and/or one non-residential building for their own use.”

The effect of Section 13-B and other provisions of the Rent

Act was explained as:

“10.  The amendment introduced in the Act created a special  class  of  NRI  landlords  and  reposed  special rights in them to recover immediate possession from the tenants  occupying  their  premises,  provided such premises were required by them. Section 13-B intends to  provide  immediate  possession  of  the accommodation  to  the  NRI  landlord  which  is  in possession  of  the tenant  if  the  landlord  requires  the same  for  his  or  her  use  or  for  the  use  of  anyone ordinarily living with him/her and is dependent on him or her. Sub-section (1) of Section 13-B postulates that the NRI landlord should be the owner of the building from which he has asked ejectment of the tenant. He should require the same for his or her use or for the use  of  anyone  ordinarily  living  with  him/her  and  is dependent on him or her. He should be the owner of

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that  building  for  five  years  before  he  applied  to  the Controller  for  possession  of  such  building.  The right under Section 13-B of immediate possession could be availed  of  only  once  during  the  lifetime  of  such  an owner/NRI  landlord.  Sub-section  (2)  of  Section  13-B gives a choice to the NRI landlord to select one among several  other  residential  buildings  or  scheduled buildings  and/or  non-residential  buildings  for  the purpose of eviction of the tenant from that premises. Residential building is defined in Section 2(g) to mean a  building  which  is  not  a  non-residential  building. Scheduled building is defined in Section 2(h) of the Act which  means  a  residential  building  being  used by  a person  engaged  in  one  or  more  of  the  professions, namely,  lawyers,  architects,  dentists,  engineers, veterinary  surgeons,  medical  practitioners  including practitioners  of  indigenous  systems  of  medicine  and who  occupies  the  same  partly  for  his  business  and partly for his residence. Sub-section (3) of Section 13-B puts a restriction on the landlord to deal with building of which he has taken possession by virtue of the order passed under Section 13-B of the Act of 1949. Under this section the owner who recovers the possession of the building by virtue of the order passed under Section 13-B shall neither transfer it  either by sale or by any other mode nor shall he let it out for the period of five years from the date he took possession of the building. In case there is a breach on the part of the owner who took  possession  of  the  building,  of  any  of  the conditions, the tenant who had been evicted would be entitled to apply to the Controller for an order directing that  the  tenant  be  restored  back  possession  of  that building  and  on  such  a  petition  being  moved,  the Controller would pass an appropriate order. Apart from the restriction which is imposed by sub-section (3) of Section 13-B on the landlord’s  right  to deal  with  the building  of  which  he  took  possession  under  the provisions  of  Section  13-B,  a  further  restriction  has been imposed on the landlord under Section 19(2-B) of the  Act  of  1949.  Section  19(2-B)  contemplates  that when  the  order  for  possession  is  being  passed  in favour of the owner-landlord under Section 13-B, he is required to occupy the premises continuously for the period of three months from the date of eviction of the

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 40 of 46

tenant. He is prohibited from letting out the whole or any  part  of  that  building  from which  the  tenant  was evicted to any other person except the tenant who had been  evicted  by  virtue  of  the  order  passed  under Section 13-B. In contravention of these restrictions, the landlord is liable for a penal action and can be imposed punishment  of  imprisonment  for  a  term  which  may extend to six months or with fine which may extend to Rupees one thousand or with both.”

40. Rent control legislation are quintessentially social legislation that

were  enacted  in  the  1940’s  and  1950’s  to  protect  and  curb

exploitation of  tenants in  view of  the prevailing socio-economic

conditions  due  to  large scale  immigration  to  towns  and  cities,

increase in population, lack of housing facilities as landed property

was owned by a few well-off and wealthy persons. The rent control

legislation,  therefore,  interfered  with  the  general  freedom  of

contract  and  right  of  the  landlord  to  seek  eviction  under  the

Transfer of Property Act. However, all such legislations invariably

also provide for balancing the conflicting rights of the landlords. In

several decisions, this Court has emphasised that there is a need

for  balancing  the  two  rival  interests  as  has  been  observed  in

Malpe  Vishwanath  Acharya  and  Others  v.  State  of

Maharashtra  and  Another19,  Joginder  Pal  v.  Naval  Kishore

Behal20,  Satyawati  Sharma (Dead) By LRs  v. Union of India

19 (1998) 2 SCC 1 20 (2002) 5 SCC 397 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 41 of 46

and  Another21 and  in  the  recent  decision  in  Vinod  Kumar  v.

Ashok Kumar Gandhi in Civil Appeal No. 3793 of 2016 decided

on 05.08.2019.

41. In  Kewal Singh (supra) this Court had rejected the challenge of

discrimination  and  arbitrariness  predicated  on  Article  14  to  the

summary procedure under Section 25-B of the Delhi Rent Control

Act, 1958 applicable in cases of personal necessity of landlords.

The  contention  that  Section  25-B  creates  a  special  class  of

landlords who are given favourable treatment for speedy eviction

of tenants was rejected as without any substance. The rent control

legislation should be just and fair to the landlords.  Accordingly, it

was observed that it is always open to the legislature to check,

regulate and also confer rights upon the landlords to enable them

to seek eviction in certain circumstances. Referring to the ground

of personal necessity, it was observed:

“17.  [...] Thus,  such  a  landlord  becomes a  class  by himself. The statute thus puts personal necessity of the landlord as a special class requiring special treatment for quick eviction of the tenant and cuts out all delays and plugs all the loopholes which may cause delay in getting  the  relief  by  the  landlord.  It  is  obvious, therefore, that the classification made by the legislature is in public interest and is in complete consonance with the  objectives  sought  to  be  achieved.  The  landlords having personal necessity have been brought together as a separate class because of their special needs and such a classification cannot be said to be unreasonable

21 (2008) 5 SCC 287 Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 42 of 46

particularly when the legislature in its wisdom feels that the  landlords  should  get  this  relief  as  quickly  as possible.”

42. The following observations in  Ravi Dutt Sharma (supra) relating

to the right given to the landlords for eviction in context of the rent

control legislation are pertinent:

“7. […] Tenants cannot complain of any discrimination because the Rent Act merely gave certain protection to them in public interest and if the protection or a part of it  afforded  by  the  Rent  Act  was  withdrawn  and  the common law right of the tenant under the Transfer of Property Act was still preserved, no genuine grievance could be made.”

Similar views were also expressed in  Kewal Singh (supra)

in the following words:     

“22. Thus, we do not see how can the tenant challenge the  validity  of  such  a  provision  enacted  by  the legislature  from which  the  tenant  itself  derived  such rights.

23. In the instant  case,  the legislature has not  taken away  the  right  of  the  tenant  at  all  but  has  merely simplified  the  procedure  for  eviction  of  the  tenant  in cases  falling  within  the  ambit  of  Sections  14-A and 14(1)(e)  of  the Act  as discussed in the judgment.  In these circumstances, therefore, any challenge by the tenant  to  the  constitutionality  of  the  Act  must necessarily  fail  and  hence  Section  25-B  is constitutionally valid.”

43. Section 13-B of the Rent Act cannot be held to be unconstitutional

because it grants a right to claim eviction for bona fide need by

summary procedure to a certain group of landlords, that is, Non-

Resident  Indians subject  to  and on the satisfaction of  statutory Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 43 of 46

conditions which incorporate a check on frivolous evictions. The

plea that Section 13-B ought to be struck down on the ground that

similar  rights  can  be  extended  to  other  landlords  is  without

substance and should be rejected. It rests with the legislature to

make laws and extend it to other similarly situated persons. The

rent act(s) invariably give similar rights by a controlled mechanism

and alluded riders to various other classes/groups of  landlords,

namely,  government  servants,  members  of  armed  forces,  the

retired or soon to retire employees of the Central and the State

Governments, widows, etc.   

44. The right  of  Non-Resident  Indians to  initiate eviction under  the

summary procedure provided in Section 18-A of the Rent Act is

not an unfettered and absolute right. It is subject to satisfaction of

various  pre-requisites  and  imperatives  that  ensure  and  check

potential  abuse  by  resorting  to  a  short-circuit  procedure.  The

requirement  should  arise  from  a  genuine  need  of  the  Non-

Resident Indian landlord or his dependent. Such landlord should

be  an  owner  for  five  years  preceding  the  date  of  filing  of  the

eviction  petition.  There  is  a  cap  on  permitting  the  use  of  the

provision which is  available only once in  a lifetime and only in

respect of one building. There are restrictions and constraints on

the re-sale and re-letting and a further requirement to possess the Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 44 of 46

property  for  a  continuous  period  of  three  months  after  the

possession is  taken. These pre-conditions and post  possession

restrictions  suggest  that  Section  13-B  serves  a  specific  policy

objective to ensure the right of Non-Resident Indians to occupy

their property in the Union Territory of Chandigarh and the State of

Punjab as the case may be, after “returning” to their country. This

right has to be balanced with the right of the tenants to establish

their case on merits by disproving the genuine requirement of the

Non-Resident Indians.

45. Section  13-B  cannot,  therefore,  be  treated  as  an  arbitrary

classification  that  infringes  and  violates  Article  14  of  the

Constitution.  The  challenge  predicated  on  the  basis  of

unconstitutionality of the classification is rejected.  

46. Before  reserving  the  judgment,  we  had  heard  counsel  for  the

appellants on merits and had expressed that we were not inclined

to  interfere  with  the  factual  findings.  Accordingly,  we  have  not

dealt with the factual matrix in each case and have examined and

answered  the  legal  issues  raised.   In  view  of  the  findings

upholding the constitutional validity of Section 13-B of the Rent Act

and  its  extension  and  applicability  to  the  Union  Territory  of

Civil Appeal arising out of  SLP (C) No. 26925 of 2011 & connected matters Page 45 of 46

Chandigarh, we would dismiss the afore-captioned appeals by the

tenants.  There would be no order as to costs.  

......................................CJI (RANJAN GOGOI)

........................................J. (L. NAGESWARA RAO)

......................................J. (SANJIV KHANNA)

NEW DELHI; NOVEMBER 14, 2019.

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