JUDGMENT
Shivaraj V. Patil, C.J.
1. Heard the learned counsel for the parties.
2. In D.B. Civil Writ Petition No. 1193/1997, the petitioner has questioned the validity of Section 6(2) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 (for short ‘the Act’) and has sought for quashing the said provisions as unconstitutional and void. He has further sought permission to increase the rent as per the prevailing market rate and any other appropriate writ, order or direction as deemed fit.
3. In S. B. Civil Revision Petition No. 986/96, the following points are referred to the Larger Bench for decision:–
“(1) Whether a learned single Judge of this Court sitting in revisional jurisdiction can declare provision of an enactment to be ultra vires the Constitution?
(2) Whether the provisions of Sub-section (2) of Section 6 of the Act can be taken to have been impliedly declared ultra vires as necessary effect of the decision of the Supreme Court in Malpe Vishwanath Acharya v. State of Maharashtra, AIR 1998 SC 602 and other cases cited by the learned single Judge in Firm Khetsi Das Sheoji Ram’s case?”
4. Thus, in substance, the principal question that arises for consideration is as to the constitutional validity of Sub-section (2) of Section 6 of the Act.
5. Shri D.S. Shishodia, the learned Senior Advocate for the petitioner in D. B. Civil Writ Petition No. 1193/1997 submitted that similar provisions in different Rent Control Acts of different States are struck down as ultra vires the Constitution. He cited the following decisions in support of his case :–
“(1) Firm Khetsi Dass Sheoji Ram, Sardarshahar v. Mohani Devi, 1994 (2) Raj LW 631.
(2) Issac Ninan v. State of Kerala, 1996 AIHC 857.”
6. He further submitted that the controversy raised in the writ petition can be taken as concluded by the pronouncement of the Apex Court in Malpe Vishwanath Acharya v. State of Maharashtra, AIR 1998 SC 602.
7. The learned Advocate-General for the respondent No. 1 State of Rajasthan and the learned counsel for the respondent No. 2 in the writ petition did not dispute the legal position in regard to Section 6(2) of the Act. The learned Advocate General only added that the State is interested and keen to bring a suitable legislation in this regard on the basis of the model law. May be it may bring such legislation within about six months.
8. Since the constitutional validity of Sub-section (2) of Section 6 of the Act is questioned in these cases, we think it appropriate to extract the said provisions. Sub-section (2) of Section 6 of the Act reads :
“6. Fixation of standard rent-
(1) …………….
(2) The Court shall, after holding such summary inquiry as it may consider just and necessary, determine the standard rent for such premises and shall, in doing so, act according to the following principles, namely-
(a) Where the premises are let for residential purpose or for the purposes of the public hospital, aushadhalaya or dawakhana, a recognized educational institution, a public library or reading room or any orphanage the standard rent shall not exceed the basic rent increased by fifty per cent thereof; and
(b) Where the premises are let for any other purposes, the standard rent shall not exceed two and a half time the basic rent thereof:
Provided that where the premises have been (first) let after the first day of January, 1965 the standard rent shall not exceed the basic rent thereof:
Provided further that where the fair rent or standard rent for any premises has been determined or redetermined (by any Court under this Act or) by any authority under any law or order repealed by Section 30 before the commencement of the Rajasthan Premises (Control of Rent and Eviction Amendment) Ordinance, 1975 and the amount of such fair rent or standard rent is the same as would be determinable as standard rent by the Court under this Section, the fair rent or standard rent previously determined or redetermined, shall not be disturbed.
Explanation.– For the purposes of this sub-section, the basic rent of any premises shall mean the rent at which the premises were let on the first day of January, 1962 and, if not let on that day, the rent at which they were first let after that day.”
9. In Firm Khetsi Dass Sheoji Ram, Sardarshahar v. Mohani Devi, 1994 (2) Raj LW 631, a learned single Judge of this Court has clearly held that the provisions of Sub-section (2) of Section 6 are hit by Article 14 of the Constitution. In paragraph 4 of the said judgment, it is stated thus:
“There is no substance in the revision petition. The first proviso to Sub-section (2) of Section 6 of me Act states that where the premises have been first let out after the 1st day of January 1965, the standard rent shall not exceed the basic rent thereof. Explanation given in this sub-section defines “basic rent” as the rent at which the premises were let out on the first day of January, 1962 and, if not let out on that day, rent at which they were first let out after that day. It means that if the premises have been let out for the first time after 1st January, 1965, the agreed rent cannot be enhanced despite great price escalation and tremendous fall in the value of the rupee. In other words, rent of the premises first let out after 1965 has been freezed. If me premises have been let out prior to this date (1st January, 1965), enhancement is permissible to the extent of 50% in the case of residential building and 150% in the case of non-residential buildings. These provisions are highly unreasonable and are hit by Article 14 of the Constitution of India. It has been observed in Ratan Arya v. State of Tamil Nadu, AIR 1986 SC 1444 : (1986 All LJ 1168) p. 1448, as follows :
“We are entitled to take judicial notice of the enormous multifold increase of rents throughout the country, particularly in urban areas. It is common knowledge today that the accommodation which one could has possibly got for Rs. 400/- per month in 1973 will today cost at least five times more. In these days of universal day today escalation of rentals any ceiling such as that imposed by Section 30(ii) in 1973 can only be considered to be totally artificial and irrelevant today. As held by this Court in Motor General Traders v. State of Andhra Pradesh, (1984) 1 SCC 222 : AIR 1984 SC 121 at p.130, a provision which was perfectly valid at the commencement of the Act could be challenged later on the ground of unconstitutionality and struck down on that basis. What was once a perfectly valid legislation may; in course of time, become discriminatory and liable to challenge on the ground of its being violative of Article 14. After referring to some of the earlier cases Venkataramiah J. observed :
“………….. The garb of constitutionality which it may have possessed earlier has become worn out and its unconstitutionality is now brought out to a successful challenge.”
10. In Issac Ninan v. State of Kerala 1996 AIHC 857, a Division Bench of the Kerala High Court dealing with the similar provisions in paragraphs 16 and 17 has held thus at page 860-861 :
“The intention in bringing a legislation like the Act was to regulate the lease of building and to control the rent, and not to make the rent static. The situation which prevailed in the year 1965 when the legislation was enacted was far different. Supreme Court in Motor General Traders v. State of A.P., AIR 1984 SC 121, has observed that what was once a non discriminatory piece of legislation may in course of time become discriminatory and be exposed to a successful challenge on the ground that it violated fundamental rights of the Constitution.
We have given our anxious consideration to the various contentions raised by counsel on either side. The Act, as already stated, is to regulate the leasing of buildings and to control the rent of such buildings in the State of Kerala. As held by the Supreme Court in Ganpat Ram v. Gayatri Devi, AIR 1987 SC 2016, the Rent Control Act is a beneficial legislation, beneficial to both the landlord and the tenant. It protects the tenant against unreasonable eviction and exorbitant rent. It also ensures certain limited rights to the landlord to recover possession on stated contingencies. Legislation does not confer any vested right on the tenants. As held by the Supreme Court, in Inder Mohan Lal v. Ramesh Khanna, 1987 (4) SCC 1 : (AIR 1987 SC 1986), there is no presumption in all cases that the tenants are weaker sections. By lapse of time the tenants (at least many of them) doing business in commercial buildings taken on rent are far more affluent financially than the owners of the building in which they do business. Though the rent control legislation is stated to be a beneficial one, it must be reasonable just and fair. It is true that there is a presumption as to the constitutionality of the provisions of a legislative enactment and the Act should, be so read as to prevent it from being exposed to the vice of unconstitutionality. But the presumption will stand rebutted if the scrutiny of the impugned provision would unmistakably establish that it violates a fundamental right.”
11. We do not think it necessary to refer to other decisions of the point having regard to the latest judgment of the Apex Court in Malpe Vishwanath Acharya v. State of Maharashtra, AIR 1998 SC 602. In the said case, the Apex Court was dealing with the similar provisions of the Bombay Rent Act. Section 5(10) of the said Act so far as it is relevant for the present purpose reads :
“5(10) “Standard rent” in relation to any premises means –
(a) Where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, such standard rent; or
(b) When the standard rent is not so fixed, –subject to the provisions of Section 11, —
(i) the rent at which the premises were let on the first day of Sept. 1940,
(ii) where they were not let on the first day of Sept. 1940, the rent at which they were last let before that day, or
(iii) where they were first let after the first day of Sept. 1940, the rent at which they were first let or……..”
12. In paragraphs 30 and 31 of the said judgment, the Hon’ble Supreme Court has in clear terms stated that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable and has further held that the decision of the High Court of Bombay upholding the validity of the impugned provisions relating to standard rent was not correct. In the said case; the relief was not granted, taking into consideration the facts and circumstances and in particular that the existing Act then had to elapse on 31-3-1998.
13. In the light of the decisions aforementioned, particularly the decision of the Apex Court, we have no hesitation in striking down the provisions of Sub-section (2) of Section 6 of the Act as ultra vires and unconstitutional.
14. Accordingly, the provisions of Sub-section (2) of Section 6 of the Act are struck down as ultra vires and unconstitutional.
15. In S.B. Civil Revision Petition No. 986/ 96, as already noticed above, the two questions are referred for decision by the Division Bench.
16. In the light of our conclusion and striking down the provisions of Sub-section (2) of Section 6 of the Act as ultra vires and unconstitutional, the question No. 2 stands answered.
17. As far as the question No. 1 is concerned, it becomes academic, in view of our decision that the provisions of Sub-section (2) of Section 6 of the Act are ultra vires and unconstitutional. Hence, it is not necessary to answer it.
18. Accordingly, the papers of S.B. Civil Revision Petition No. 986/96 now shall have to be placed before the learned single Judge dealing with such matter, for disposal in accordance with law.
19. In the result, D.B. Civil Writ Petition No. 1193/97 is allowed and the provisions of Sub-section (2) of Section 6 of the Act are struck down as ultra vires and unconstitutional. It is open to the writ petitioner to get the appropriate rent fixed in accordance with law, in the light of the striking down the provisions of Sub-section (2) of Section 6 of the Act as ultra vires and unconstitutional.
20. The papers of S.B. Civil Revision Petition No. 986/96 shall be placed before the learned single Judge dealing with such matters, for disposal in accordance with law, in the light of what is stated above.
