Holding

Section 3 is a valid delegatory provision, the exemption notifications are within the Act’s object, may be issued by the Chief Commissioner, and operate prospectively, applying only to buildings connected or occupied on or after 31 January 1973.

Summary

The petitioners challenged three notifications issued by the Chief Commissioner of Chandigarh under Section 3 of the East Punjab Urban Rent Restriction Act, 1949 (as extended to Chandigarh), arguing that the section delegated excessive legislative power, violated Article 14, was ultra‑violet of the Act’s object, and that the notifications were retrospective and could be issued only by the Central Government. The Supreme Court held that Section 3 is a valid delegatory provision, the notifications fall within the scheme of the Act to encourage construction of new housing and are not discriminatory, and that the Chief Commissioner, as an administrator of the Union Territory, may issue them under Article 239(1) and the General Clauses Act. The Court further held that the notifications are prospective, applying only to buildings that received sewerage or electric connections or were occupied on or after 31 January 1973. Consequently, the notifications were upheld and the writ petitions dismissed.

Issues considered

The validity of Section 3 of the East Punjab Urban Rent Restriction Act, 1949 with respect to excessive delegation of legislative power.
Whether the exemption notifications issued under Section 3 are ultra‑violet of the Act’s object and policy and violative of Article 14.
Whether the power to issue such notifications lies exclusively with the Central Government or can be exercised by the Chief Commissioner of Chandigarh under Article 239(1).
The prospective or retrospective operation of the notifications, particularly with respect to buildings constructed before 31 January 1973.
The effect of the East Punjab Urban Rent Restriction Act (Extension to Chandigarh) Act, 1974 on the validity of the notifications.

Legislation cited

East Punjab Urban Rent Restriction Act, 1949s. 3
East Punjab Urban Rent Restriction Act (Extension to Chandigarh) Act, 1974s. 1, s. 2, s. 3, s. 4
General Clauses Act, 1897s. 3(8)(b)(iii)
Punjab Reorganisation Act, 1966s. 87, s. 88, s. 89
U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972s. 2

Subjects

rent controlurban rent restrictionexemption notificationexcessive delegationArticle 14retrospective effectprospective operationUnion Territory administrationSection 3Chandigarh

Judgment

- '

428
..
,...
M/S PUNJAB TIN SUPPLY:C,O.,. ' ..
.A.
.. ·_'. J
· CHANDIGARH ETC. ETC.

Y.

THE CENTRAL. GOVERNMENT & "ORS.
'
,.B
c October !20; i983• .
[A.P. SEN; AND E.S. VENKATARAMIAH, JJ.)

The ~.Ji Punjab U1ban• Rent Restriction Act~ 1949 a;·mmOdijied the by
· East Punjab Urban Renl'Restriction Act (ExtensiOn- to -Chandigarh) ·Act. -1974-
., . Sec • .i-VaJiditj of. Whether Union Territory 0/ Chandigarh, Home,. -Department:
. Notification. No. J52-LD-7J/602 dated January Jl, 1973 as !"odified by

..
. notification3 dated September 24, .197J and Sept. 24, 1974 issued. under uc•. 3.
yaJfd Wheiher Noi_ificationJ ~perate p~ospec~ivety: .- -
,.
· -
..
D . , lmer;r~t;aion o/St~iutes-Rul~ 0/_:_0bjec"iand ~olicy of statute -,,eed_ Mt
a/Ways bl strictly confined''! preamble and provfalo~ of statu_~e.

_ . Inierpretiztfon of. ·statutes-Rule of-Whether a statute ·Operates ·.retros- . ·_ )
pecti1el~Does not dep~nd prlmaTily"on language ·of -$ta,t~te-Court to . ·ue J
$urroundinz circumstances. - '! _ ·•

~~ ~n~~in~- ~ti~_ ~~st P~fab-Urban ·~~~t-
Restr-iction.; Act (&tension to -,
Chandigarh)_Act, 1974 the Parliam-ent brought- into forCe _with effeet from
'~ November4, 1972, the East Punjab Urban Rent Restriction Act; 1949 which Was
·in force iii the foriner State of -Punjab with the modifications Set put in its
, :schedule in the Union Territory of Chandigarh and_validatCd an .aciions - take·n;
notifiCations issued and orders made or purported to _have bi!eQ taken, 'is!Ued
....., or made under the 1949 Act. Sec. 3 of the Act or 1949 provided that. the
Central Uoveroment may .exempt. any building· from the applicatioq of-. the Act.
-Under that scctioi;i the Chief Commissioner of Chandigarh issUed a notification
dated January 31, 1973 stating that the prOvisionS:.of the Act shall not app'Jy to .• .J:
. buildin2S,-constructed in the urban area ·Or Chandigarh, for' a period •of five
years with effect from the date the sewerage conn~ction is granted in resPect or
a atic:h buildings. This notification was modified by notification_s dated ·SCptembCr· ;---...::-. -
24, 1973 and Sept. 24, 1974: The petitioners questioned the validity of s. 3 or the.
Act ·or 1949 and notificatiot]s issued thereunder on the grounds that s. 3 suffered
from the vice or excessive delegatiori or legislative power; that the exemption ·-
. granted- by' the notificatiori dated January 3~ 1973 as modified b:Y the later
notifications was outside-the scope of the object and poUcy of the Act 3.nd at the
sal:ne time discriminatory, and that the power tO issue notifications under s. 3 of ·
the ACt could be exercised _by the_ Cetitral Government only. It was_ also urged
th&t the notification bad prospective operation. · -

'
1' . '
•

PUNJAB TIN CO. V, CENTRAi> GOVT. 429

Dismfssina: the petitions,

HELD : Section 3 of.the Act does not suffer froqi the vice of ,excessive
delegation of legislative power. and is also not violative .of Art. 1'4 of the
Constitution; [439 FJ

P.J. Irani v. The State of Madras, [1962) 2 S.C.R. 169; State of Madhya
Pradesh v. Kanhaiyala/, (1970) 15 'M.P.L.J. 973; and Sadhu Singh v. Th~ District• B
Board, Gurdaspur & Anr. (Civil Appeal No. 2594of1966 decided on October 29,
1968) referred to.
'
The pr~amble and .the provisions of a stat.ute nd doubt assist the Court ·
in finding out its object 80d policy but hs Object and policy need not always be
strictJy confined to its pream.ble aild th_e provisions contaitieQ therein, [440 DJ C
In the instant case, the object and policy of the Act appears tO be slightly
wider than some of the key provisions of the Act namely fixation 'of rair rent
&nd prevention of uitreasonable eViction of tenants. The-policy and- o'bject of
the Act generally is mitigation of ~ardship of tenants. Such mitigation can be
attained by several measures, one of then1 being creation of incentive to 'persons
with caPital Who are otherwise reluctant to invest in the construction of new
D
buildings in view of the chilling effect of the· rent control laws.' As a patt of the
said scheme in order to persuade them to invest in -the cOnstruction of new
. 01,1ildings exemption, is granted io 'them from the operation -of. the Act for a
•·short period of five years so that whatever may be the hardship ·for· tbe time
being to the tenants of the new bpildings, the new building& so constructtd may
after the expiry of the period of exemption be available for the pool of housing E
accommodation coritrolled by the ·Act. The impugned· notification is not there-

-
fore, ultra vires section 3 of the Act as·in its true effect, it advances the Scheme,
object and purposes of thC.Act which are articulilted in th!? preamble -.and' the
substantive .provisions of the Act. Moreover the classification of ba,ilding$
into exempted build!n,gs and unexempfed buildings brought about by the noti~
fication bears a just anti reasonable nexus to ~he ~bject to be. achieved namely
the creation of additional housing accommodation to meet the growing need of
persons_ who have no accommodation to reside or to carry on business .and ,it
cannot be considered as discriminatory or arbitrary or unreasonable in View of
the shortnesS of the period of exemption available in the case of each ex~mpted
building. [440 E-441 BJ '

Art. 239(1.) of the Constitution provide~ that save as ot~erwise provided
- G
by Parliament by.law, Union Territory shaU be adr.1inistered by the President
acting through'ari administrator to be appointed by him with sµch designaiion
a!$ he may sp~cify. Under a notification issued on November 1, 1966, the .

. '

•
President has directed that the aAministrator (the Chief Commissioner) sha:II
in relation to.the Union Territory of Chandigarh exercise ancf'·discharge with
effect from November 1, 1966 the powers and functions of the State Government
under any law which. is extend~d to the U;nioi:i Territory of Chandigarh. The
Act is a State law which is so extended to Union Territory throtigh the
E~tenS:ion Act. ~t is furth~r s.een that _s. 3 (8) (b) (iii) of th~ Genera"! Cla1,1se~
B
•

- ·- --"-=-
430 St1PREMll COURT REPORTS •· (1984) 1 · S.C.R.

Act defines •Central Government' in relation to th0 administration of .a· ·union
. .A. Territory 3.s including the administrator thereof acting within the scope of the
aurhority given to tiim under Art. 239 of the Constitution. --Tue Union of India·
which is i party to_these proceedinis does not dispute the au.thority of the Chief
COmmissioncr to issue the notification refe~ed to above. Moreover s. 4 of the
I;xtension Act clearly v.ilidates the notifications which bad been issued or pul·.
ported to -have ·been iSsued under the Act . before · the date of the.~ .
Extension Act by declaring that they shall be deemed to be valid and
B effective. (441 G-442 E) ..
.....
'.

Uttam Bala &vankar v. A.1st1.- -·Collector ·of Customs- & Central ·Excise ·
Goa & Anr., (1971) f S.C.R. 714 refer~ed to. .

All laws which affect subsiantivo -rights generally operate prospectively
C. and there is a presumption against their retrospectiVity ~if they affect. vested
rights ind obligations unless the legislative intc!nt is clear and.compulsive Such ..
retrospective effect may be given where there are express, words giving retros pee- · ...
tive effect or where the language used necessarily _implies that such retfospective
- ·operation is intended .. Hence the question whether a statutory· Provision .has
·retrospective effect or not depends primarily On the langnage in which_· it iS
D cOuched. · - If the language is clear and unambiguous effect will have to be given
to the provision i~ question in accordance with its tenor. 'If the Iariguage.is rioti-'!
clear then the Court has to decide whether in the ·light of the surroundfog
Circumstances retrospective effect should be given to it or nOt. (443 D·F)
. . ' . .. . . ; .J
- In the instant case a reading or the notification does not clearly indicate
·thattbeChiefCommissionerintended to grant exemption in respect of ani.
...
E of the buildings constructed prior to January 31, 1973; There was also no com-
pelling• reason· for giving exemption to buifdingS- which had already been
constructed as the object or issuing the 'notifi~ation was only to encourage
construction of new buildings thereafter and not to . takC away the statutory
protectioii already extended ·t~ tenants of buildings w~ich had come into
existence prior to January 31, 1973. The notificatioll :applies only, to those
buildings_ which are given Sewerage connection or electric connection or which
are occupied, as the case may be. on or after January 31, 1973. · · ·
(443 H-444 F;,346 q
. .

• The· notification impugned in the instan~ case sbnds by itself and it is not
to be construed in the background of the provision of s. 2 of· the U.P. Urban
G Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. (446 A)
~ ~, .
' . -

Om Prakash Gupta v: Dig Vajendrapal Gupta; "[1982) 2 S.C.C. 61; Raton
Lal Shinghal v. Smt. Murtl Deri, (A.I.R. 1980 S.C. 635); Shrl Ram Saroop Rai
Y. Smt. Li!avat~ [1980] 3 S.C.C. 452; Strawboard Manufacturing Co. Lid. v.
Gupta Mill Workers Union, [1953) S.C.R. 439; Dr. Indramani Pyarelal Gupta. v. ·
B W.R. Nathu & Ors., (1963) 1 S.C.R. 721;· and Income-Tax Officer, Al/eppey ·;,•.
M.C. Polll!Oost ~Ors••~[197~] l S.~.R. 67~ referred IQ, ·

'
PUNJAB TIN co. v. CBNTltAL oovt. 431

ORIGINAL JURISDICTION ! Writ Petitions Nos. 6372-80, 9604,
9935·41, 9943-44, 9946-56 artd 10001 of 1982, 13·18, 83, :l93, 410,
. 682, 914-25, 928, 1108-11, 2742-52, 2770, 2898, 3330-33, 3362, 3543,
3875-79, 3941, 3946, 3950, 4241, 4242, 4815-16, 4826, 4829, 4834-37,
5183, 5574, 5717, & 7891 of 1983, 7016, 8189-8206 & 9346 of 1982,
4614-20, 5188, 5845, 7489; 8212, 8612, 8875-76, 8886-88, 8268-69,
8348-50, 8382, 8384, 9082-83, 9094, 9129, 9133; 9134, 9145, 9147,
B
9262, 9562, 9569, 9862, 9864 11nd 9876-78 of 1983.
f

. ..
(Under 11rticle 32 of the Constitution of India)"
.
Advocates For The Petitioners (

O.P. Verma • c
t
Sanjeev Wa/ia, J.S. Sahpuri and M.P. Iha.

Shrinath Singh and A. Gupta.
D
A.K. Goel.

· C.M. Nayyar.
..
P.N. Puri, M.K. Dua and Sudarshan Goel.
. .
.E
V.M. Tarkunde and Anil. B. Divan, H.K. Pur.i.

S.K. Mehta,.P.N. Puri and M.K. Dua.

R.P. Bhatt, Ashok Mathur and Parveen Kumar.

A.K. GO!lguli.
•
S.K. Bisaria.

S.K. Sabarwal.
.
•
.

D.S. Shont, D.K. Garg and M.M. Kashya~, S.K. Bag~a.

· Advocates for the Petitioners :

D.R. Kapur, Sanjiv Madon, S.R. Srivastava, D.D. Sharma, H
S.M. Ashri, Shankar Ghose, M/s; D.P. Mukharji, G.S. Chatterjee,
B.S. Shont, M.M. Kashyap, T.S. Arora, S.K. Ghambir, Shrinath Singh,
A.P. Mohanti, Swaraj Kaushal, B. Kanta Rao and P.H. Parekh .
•
.
43'2. SUPREME COURT REPORTS [1984] l s.c.R

Adyocates For T~e Respondents :
. R.P. Jagga

S.<J. ManchaniJa,.P.R. Mridul, Harbanslal and P.A. Francis.

R.P. Jagga, Miss Kai/ash Mehta, Vimal Dave, A. Minocha,
· J.eetendra Sharma,' Janardhan Sharma, P. Gaur, Atul Jain, Prem
Malhotra, M.M. Kshatriya, Dr. Meera Agarwal, R.C. Misra, Jitendra
Sharma, D.P. Mukharji, Randhir Jain, Ramesh C. Pathak, Satish Vig,
E.G. Agarwal, V.K: Panditha, R. Salis//,. C.K. Mahajan Ashok Grover,
Mohan Pandey, J.K. Jain, R.S. Bindra, J.D. Jain, K.L.. Taneja,
S. Srinivasan, E.M.S. Anam, M.K. Dua, N.K. · Agarwala, R:P. Jagga,'
. S.K. Bagga, Ms. S. Bagga, C.P. Wig,'.Miss. Rani Chhabra, Mukul ·
Mudga/, N.S. Das Bhal, Ashuni Kumar, R.N. Poddar, C. V. Subba
. Rao.

The Judgment •Of the Court was delivered by

D VENKATARAMJAH, J: In these petitions under Ariicle 32 · of the
Constitution, the . petitioners have ·questioned the constitutional
validity of the Home Department Notification No. 352-LD-73/602
'dated January 31, 1973 (hereinafter referred to as 'the Notification')
·.as modified by the Home Department Notification No. 2294:LD-73/
3474 dated September 24, 1973 and the Home Department Notifica-
tion No. 3205-LD-74/3614 dated September 24, 1974 issued by the
Chief Commissioner of the Union Territory of Chandigarh under ·
·section ~ of the East Punjab Urban Rent Restriction 'Act, 1949
(hereinafter ' referred to as 'the Act') exempting every building .
constructed in the urban· area of Chandigarh for a period of five -
years from the re~pective date applicable to it from the operation
of the Act and issuing certain other directions in that behalf.
Incidentally the petitioners
section 3 of the Act.
. .
have also questioned tlie validity of .;;i..

For a proper appreciation of the-rival contentions of the parties,
it is necessary to refer briefly to the history of the relevant provisions
of law. The. area now. known as the Union Territory of Chandigarh
was a part of the State .;f_ Punjab as it existed·prior to the ·coming into
force of the Punjab Reorganisation Act. 1966 (Act 31of1966). With
effect fmm November I. 1966 i.e. the appointed day under section 4
H of the said Act the Union Teqitory of Chandigarh came into exis-
-'tence and thereupon the said area. ceased to from part of the ·erst-
while State of. Punjab. · Section 87 of the Punjab Reorganisation
• •

PUNJAB TIN co. v. CENTRAL GOVT. (Venkatafamiah, J;) 433

Act, 1966 conferred power on th!' Central Government to extend by
notification with such restrictions or modifications as it thought fit
any enactment which was in force in a State at the ·date of the noti-
. fication to the Union Territory of Chandigarh. Whereas section 88
of that Act prov,ided for the territorial extent of laws, section 89 dl:alt
with the power to adapt laws, with the object of providing as far as
possible for the continuity of laws in force in the several parts of. the B
erstwhile State of Punjab in the successor States namely the States
of Punjab and Haryana and the Union Territory of Chandigarh.
The Act Le. the East Punjab Urban Restriction Act, 1949 was
a law which had been enacted before the commencement of the
Constitution and continued to be in operation even .after the com- . G
mencement of the Constitution in the erstwhile State of Punjab by·
virtue of the provisions of the Constitution. But the Act had ·not
been brought into force in the area constituting the Union Territory
of Chattdiga~h by the State .Government of the erstwhile State of
Punjab.. By the Notification No. 13/l/66·CHD dated November . D
1, 1966 issued by the Government of India, Ministry of Home
Affairs, the President authorised the Administrator of the Union
Territory of Chandigarh i.e. the Chief Commissioner \hereof, in
relation to the said territory to· exercise and discharge with effect
from November 1, 1966 the powers and functions of the .State
• >- Government under any such law .. On the basis of the above notifica- E
tiog and, other relevant provisions of law and notifications which had

-
been issued from time to time to which a detailed reference is not
necessary, the Chief Commissioner issued a notification ·bringing the
Act into force in the Union Territory of Chandigarh with certain
modifications with effect from November 4. 1972. The validity of
the said notification was challenged before the High Court of Punjab F
and Haryana. '. The High· Court quashed the said notification by its
judgment dated October 9, 1974 holding that the Act had not been
effectively· brought into force in the Union Territory of Chandigarh
by virtue of that notification (vide Dr. Harkishan Singh v. Union . of
India & Ors).(') lt is not necessary to deal with tho reasons given G
by the High Court in .support of-its judgment since the legal infir" ·
mities pointed out by the. High Court were set right by the Parliament
by the enactment of the .East ·Punjab Urban Rent Restriction Act
(l!xtension to Chandigarh) Act, 1974 (Act 54 of 1974) (hereinafter
referred to as 'the Extension Act') the relevant part of which· reads H
as. follows : · ·
•
(1) A.!.R, 197~ Punjab and Hilryana 1.6 0 (F.B.).
434 SUPREME COURT REPORTS (1984) l S.C;R.

"I. This Act may be called the East Punjab· Urban
A · Rent Restriction Act (Extensi11n to Chandigarh) Act,
1974. •

2. In this Act, "The Act" means the East Punjab Urban
Rent Restriction Act, 1949 as it extended to, and was in
B • force, in certain areas in the pre-reorganisation State of
Punjab (being areas which were administered by municipal
committees, cantonment boards, town committees or noti·
fied area committees or area notified as urban areas for
the purposes of that Act) immediately before the .Ist day
of November, 1966.
c 3. Notwithstanding anything contained.in auy judgment,
decree or order of any court, the Act shall subject to the
modifications specified in the SchedU!e be in force in and be
deemed to have been in force with effect from the 4th d!y
of November, 1972 in the Union Territory of Chandigarh
as if the provisions of the Act as so modified had been
•· included in and formed part, of this section and as if this
section had been in force at all material times.

4. (I) Notwithstanding anything contained in any
judgment, decrees or oder of· any court, anything done
E
or any action taken (including any notification or direction
issued or rents fixed or permission granted or oder made)
ot purported to have been done or· taken under the Act
shall be deemed to be as valid and effective as if the
provisions or'this Act had been in force at all material
F times when such ·thing was done or such action was taken.

... (2) · Nothing in this Act shall render any person
guilty of any offence for any contravention of the provb
· s'ions of the Act which occurred before the commencement
of this· Act.
G
THE SCHEDULE
(Sec. Section 3)

H Modifications in. the Act

!. Throughout the Act, for "~tate GQvernment" sub•
stitute "Central GQvemment".
- PUNJAB TIN co. '· CENTRAL GOVT. (Venkaiaramiah, J.) 435

2. Section 1, for sub-sectfons (2) and (3), substitute "(2)
It extends to all the urban areas in the Union Territory of A
Chandigarh". - '

,. 3. Section 2. -

- (i) aftei:. clause (d), insert- B
(dd) "Notification" means a notification published
in the Official Gazettee".

. (ii) for clause (j), substitute,-
'(j) · "urban area" means the area comprised in
c
'I_...,. Chandigarh as defined in Clause (d) of Section 2 of ·
the Capital of Punjab (Development and Regulation)
• Act, 1952 and includes such other area comprised in
the Union Territoty of Chandigarh as the Central•
Government may, having regard to the density of the D
population .and the nature and extent of the accom·
modation available therein and other relevant factors,
--.. declare by notification to be urban for the ·purposes
of this Act."

4. For SFction 20, substitute-

"20. (I) The Central Government may by notification
make rules, for the purpose of carrying out all or any of
the provisions of this Act.

·(2) Every rule made under this Section shall be
laid as soon' as may be after it is made, before each House
of Parliament, while it is in session for a total period of
'
thirty days which ~y be comprised in one session or in
two or more successive sessions, and if, before the expiry G
of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making
any modification in the rule or both Houses agree that
the. rule should not be made, the rule shall thereafter
have effect, only in such modified form or be -of no effect, • e
as the case may be; so however, that any such modifica·
tion .or annulment shall be without prejudice to the
validity of anythin& previously done under !hat rule".

,
L

436 SUPRllME COURT REPORTS ·. 119841 1 s.c.R.

Thereafter in exercise of the powers conferred ·by section 3 of
the Act the Chief Commissioner published a notification dated
January 31, \973 exempting the buildings referred to therein·from the.
~peration of the Act. It reads :-
, , ,

"No. 352-L.D-73/602 dated. January 31, 1973.·. In
exercise of the powers conferred by section 3. of the East
B Punjab Urban Rent Restriction Act, 1949, (Punjab . Act
No. III of 1949), as applicable to the Union Territory of
Chandigarh, the Chief Commissioner; Chandigarh, is
pleased to direct ,that the provisions of the said Act shall
not apply to buildings, constructed in the urban area of
c Chandigarh, for a period of five years with effect from the
date the sewerage connection' is granted in respect of such
buildings by the competent authority under rule.!12 of the·
Punjab Capital (Development and Regulation) Building
Rules, 1952;'' ·

D •This was followed by the issue of another. notification dated
September 24, 1973 which is as follows :-
'
~"No. 2294-LD-73/3474. -In partial modification of
Chandigarh Administration, Home Department/Notifica-
E tion No. 532-LD-73/602 dated the 31st January, 1973,
the Chief Commissioner, Chandigarh is. pleased to .direct
that the period of five years' exemption shall be computed
as under: ·

(a) Where sewerage connection can be given, . from
F- the date such connectii>n is granted by the •·t
competent authority;

(b) Where sewerage connection cannot be .granted,
as for instance, in the case of booths, from the ·
date electric connection is·· first given by the
G
competent authority. ·

(c) In case not covered in categories (a) or (b) above
from the date the building is actually
,H occup_icd.''

Again on June 11; 1982 a further notification· was issued as
follows:

~
1,1
. PUNJAB TIN co. v. €ENTRAL GOVT. (Venkataramiah. J.) 437
•
"No. LD-82/10.11.- In partial modification ·or
Chandigarh Administration, Home Department Notifica-
tion No. 352-LD-73/602 dated the 31st January, 1973
read with Chandigarh Adiriinistration Home ·Department
Notification No. 2294-LD-73/3474, dated the 24th
Septemeber, 1973 and in· exercise of the powers
conferred by ,.1ection 3 of the East Punjab Urban Rent B
Restriction Act,· 1949 as applicable tci the Union Territory
of Chandigarh, the Chief Commissioner, Chandigarh is
please~ to direct that the period of 5 years' exemption
shall be computed in the manner indicated below :

(a) Where sewerage .connection can be· given, from the . G
date such connection is granted. by the competent
authority;

(b) Where sewerage connection cannot be granted, as
for instance, in the case of booths, from the date D
electric connection is first given by the competent .

.. ~thority;

(c) Where sewerage connection has already been given
and. n~w building is constructed in addition to ·or
over and above the existing building and. has been
separately let out, from the date new building is
actually occupied; ·

• (d) In cases ilotcovered in categories above, from the
· date the building is actually occupied."

· On September 24, 1974, the Chief Commissioner had .issued
. ·earlier ano.ther notifica~ion which read thus :

"No. 3205-LD-74/3614.

·In· exercise of.the powers conferred· by section 3 of .G
the ·East Punjab Urban Rent Restriction Act, 1949 as
· . applicable to the Union Territory of Chandigarh, the
Chief Commissioner, Chandigarh is pleased to direct that
the provisions of Section 13 of the said Act shall not apply
to buildings, exempted from tH'e provisions of the Act for
a period of five years vide Chandigarh Administration.
Notification No. 352,LD,73/602 dated the 31st January,
. ;.

438 . SUP)tllMI! COURT REPORTS {1984) 1 s.c.R•

.A 1973 in respect .of decrees passed by Civil Courts in suits
for ejectmeut of tenants in possess"ion of these buildings
instituted by the landlords against such tenants during
the period of exemption whether such decrees were or are·
passed. ~uring the period of exemption or at any time
thereaffer."
B
The Extension Act merely brought into force with effect from
November 4, 1972, the Act which was an Act in force in the former
State of Punjab with the modifications set out in its Schedule in the

•
Union Territory of Chandigarh .and validated all actions taken,
notifications issued and orders made or purported to have been taken .
c ' issued or made under the Act. .Having done that it . withdrew from
the scene. Thereafter the Act as modified by the Extension Act
alone has to be. looked into to consider its effect on the Union
Territory of Chandigarh. As observed by this Court in Rajputana
, Mining Agencies Ltd. v. Union of inilia & Anr.( 1) 'there is neither
precedent nor warrant for the assumption that when one Act app)ies
D another Act to some territory, the latter Act must be taken to be
incorporated in ·the former Act. It may be otherw~e, if there
were words to show that the earlier Act is to bi: deemed to be re-
enacted by the new Act.' The Act in the instant case was only •
extended but not re-enacted. We should; therefore, proceed on the
---
E assumption that the Act itself with the amendments was in force
with effect from November' 4, 1972 in the Union Territory of
Chandigarh. Every building that was in existence on that day and
which was constructed thereafter came to be governed by the Act u
amended by the Extension Act. It was on January 31, 1973 that the
Chief Coinmissioner issued the notification under. setion 3 of the Act
_F exempting a certain. class of buildings namely new buildings for
a period of five yeart calculated from the relevant date applicable to
them. Section 3 of the Act as amended by the Extension Act reads
1th us
'
0 "3. The Central Government may direct that all or
•
any of the provisions of this Ac! shall not apply to any
particular building or rented land or any class of buildings
or rented lands." ·

H: The notification dated January. 31, 1973 and the other
notifications modifying it are alr.eady set out above.

(1) 11961) 1 S.C.R. 453 at 457.
•
•
. PUNJAB TIN co. v. ·Cl NTRAL GOVT. (Venkataramiah, 1.) 439

Several contentions have been urged on behalf of the petitioners
in supporl of their case. Their first attack is directed against section A
'3 of the Act itself. It is urged that the said section which authorises
the Central Government to issue notifications exempting certain
buildings or class of buildings suffers from the ·"lice of excessive
delegation oflegislative power. This contention need not :.detain .us·
lpng because of tile decision in P.J. Irani v. The State of Madras(') in
B
which section 13 of the Madras Buildings (Lease and Rent Control)
Act, 1949 (Madras Act XXV of 1949) 'which read as:

"Notwithstanding anything contained in this Act the
State Government may by a· notification in the Fort St.
George Gazette exempt any building or class of buildings
from all or al}y of the provisions of this Act,"
c
was upheld by a Constitution Bench of this Court. ·.This Court did
not also notice any innrmity in section 3(2) of the Madhya Pradesh
Accommodation Control Act, 1961 (41 of 1961) which read as·:
. .
"The Govrnment may, by notification exempt from
D
all or any of the provisions of this Act any accommoda-
tion· which is owned by any educationai religious or
charitable institution or. by any nursing or maternity
• >- liome, the whole of the income derived from which' is
utilised for that institution or nursing home or maternity E

-•
home."
. .
while decidillg the case of Srate of !Jadhya' Pradesh v. Kanhaiya/a/.(')
In fact the very section i.e. section 3 of the Act has been held by this
Court not to suffer from the vice of excessive delegation of legislative F
power (See Sadhu Singh V; The District Board, Gurd,aspur & Anr.(')
It is also held in that case that section 3 is not violative of Article 14
. of the Constitution. This contention, therefore, fails .
• •
The next contention is that the exemption granted by the
notification in these.cases being outside the scope of the object and
policy of the Act and at the same time discriminatory is liable to be
·struck down. The argument proceeds on the assumption that tbe
policy and object of an Act can be gathered only from its. preamble
R
(1)[196212 S .C.R. 169.
. (2) [1970) 15 M.P.L.J. 973.
(3) Civil Appeal No. 2594 of 1966 decided on October 29, 1968.
•
440 SUPREME COURT REPORTS [1984] l s.c.R,

and the provisions contained therein and1that in. the ·instant casb since
A the preamble of the Act stated that it had been cmacted to restrict the
. increase of rent of certain premises situated with.in t)le limits of urban
areas and the eviction of tenants therefrom and the Act has ma4e pro·
vision only for thbse purposes mentioned in the preamble, the Central
Government which is only a delegate of the Parliament could not
B . exempt totally certain new buildings from the operation of the· Act,
ttius enabling greedy landlords to charge excessive rents and to evict
at their sweet will the tenants who did not submit tO their wish~s. In
the counter affidavit filed on behalf of the admininstration of the
Uqion Territory of Chandigarh it is pl~aded that the object of issuing
the notification is to 'encourage construction of :new buildings in the
urban area of Chandigarh so that as the supply of housing accom·
modation increased, the pressure on the tenant as a class may
decrease. •

The preamble and the provisions of a statute no doubt assist
D the Court in finding out its object and policy ·but its object and p~llcy
need not ajways be strictly confined to its preamble and the provisions
contained therein. The object and policy of the . Act which is now
before us appears to be slightly wider than . some of the key r-
provisions of the Act namely fixation of fair rent and prevention of
unreasonable eviction of tenants. The acute problem of shortage of
ur~an housing as . we air know has become a permanent. feature
throughout India. It is on account of the. shortage of the number
of houses in urban areas, the landlords get an opportunity to exploit
' . . ~
tenants who are in need of hou'!;ing accommodatiqn bj. c9mpelling
them to enter into unconscionable bargains. The Act 1s passed as •
one of the measures taken to mitigate the hardship caused · to · the
tenants. J'he policy and object of the Act gen1~rally is mitigation of
the hardship of tenants. Such mitigation can be attained by several
measures, one of them being creation of ince1'1tive to persons with
capital who are otherwise reluctant to invesi in the construction of .•
-G . new buildings in view of the chilling effect of t~e rent control laws•.
As. a part of the sa.id scheme in order to persuade them to invest in
·the construction of new buildings exemption is granted to them from
: the operation of the Act for a short period of live years so that what··
ever may be the hardship for the time being to the tenants of the
new buildings, the new building> so constructed may after the expiry
H of the period of exemption be available for the . pool of housing
accommodation controlled by the Act. T~e impugned notification
· is not; theref~re, ultra vires s~ction 3 of the A.ct as in itS>' .trµe ·~!feet,
•

. PUNJAB TtN co. v. CENTRAL GOVT. (.Venkataramitih, J.) 441

itcadvances the scheme, object and purposes of the Act which are
articulated in the preamble and the substantive provisions of'the Act. · A
Moreover the classification of buildings into exempted buildings and
unexempted buildings brought about by the notification bears a just
and. reasonable nexus to the object to be acliieved namely the creation
of additional housing accommodation to meet the growing ·needs of
persons who have no accommod!\tion to reside. or to ·carry on B
business and it cannot be considered as discriminatort or arbitrary or
unreasonable in view of the shortness. of the period. of exemption
available in. the case of each exempted building. The exemption
granted for a period of five years only serves a.s an incentive as stated
above an.d does not create a class bf landlords who are for ever kept
outside the scope of the Act. The notification tries to balance ·the C.
interests of'the landlords on the one hand and of the tenants on the'
other in a reasonable way.. W~ do not, therefore, agree with the
submission that the notification either falls outside the object and
policy of the statute or is discriminatory.
The next submission made on behalf of the petitioners is that· D
the notification dated January 31, 1973 and the ·other subsequent
· notincations issued by the ·chief Commissioner ar~ of no effect since ·
according fo ihe petitioners, the power to issue such notifications
under section 3 of the Act can be exercised by the Central Govern·
' >- ment only. On behalf of the respondents i.e. tlie Union of India E
. and the administratfon of the Union Territory of Chandigar1', it is
urged that although the Central Government is vested with the power
> to issue orders under section 3 of the .Act, the said power can be
exercised concurrently by the Chief Commissioner. of the Union
• Territor.y of Chandigarh also by virtue of Article 239(1) of the
Constitution read with the notification issued by the President there·
. under and of the definition of the expression 'Central Government'
. given in section 3(8) of Generai Clauses Act, 1897•.
'
. Clause (I) of Article 239 of the Constitution reads thus :

"239. (1) Save as otherwise ·provided· by Parliament
bylaw, every Union territory shall be administered by the ·
·President acting, to such extent .as he thinks fit, through
an administrator to· be appointed· by him with such
· designation
·-·-;',. ,._ ,_ ' . -
as he may
... '
specify.''

The administrator of the . Union Territory of Chandigarh is
called the· Chief Commissioner. Under a notiftcatf~~ 1~su~d -on

•
•

.442 SUPRBMB COVRT REPORTS (1984) l S.C.R,

November I, 1966, the President has directed that the administrator
(the Chief Commissioner) shall in relation to the Union Territory of
Chandigarh exercise and discharge with effect from November I, 1966.
the powers and functions of the State Government under any law
which is extended to the Union Territory of Chandigarh. The Act is . lp
a State law which is so extended to the Union Territory through the
B Extension Act which is only a corollary to sections 87, 88 and 89
of the Punjab Reorganisation Act, 19,66. It is further seen that
section 3 (8) (b) (iii) of the General Clauses Act defines 'Central
Government' in relation to the administration of a Union Territory
as including the administrator thereof acting within the scope of the ·
authority given to him under Ariicle 239 of the Constitution. The
c Union of India which is a party to these proceedings does not
dispute the authority of the Chief Commissioner to issue the noti·
fications referred to above. In Uttam Bala Ravankar v. Asstt. Collector
of Customs &central Excise, Goa & Am'.( 1) this Court has applied
section 3(8) of the General Clauses Act to uphold a notification
issued by the Lt. Governor of Goa, Daman and Diu (the adminis-
. trator of the Uf!ion Territory) where the power to issue it was
exercisable by the Central Government. Moreover section 4 of the
Extension Act clearly validates the notifications which had been ..,, "
issued or purported to have been issued under the Act before the
· date of the Extension Act by declaring that they shall be deemed to
E valid and effective. We do not, therefore, find. any merit in this.
contention too.
We shall next deal with the question whether the notification
issued under section 3 of the Act has retrospective effect. ·This
question affects .those. buildings which were 'constructed in the sense
' that they satisfied the criteria applicable to them prior to the issue of
the notification. It is urged on behalf of the tenants .of such buildings
that the notification is only prospective in its operation and the benefit
of th'e el\emption accorded by it cannot be claimed by the land·
lords of such buildings. The stand of the administration of the
.G Union Territory of Chandigarh is also the same. The submission
made on behaif of the Chandigarh administration is that the noti· •
fications take within their sweep only such buildings as arc coinplc·
ted in the sense ftilfilling the criteria laid down threin after the
notifications were brought into force. The landlords of certain
H buildings, however; claim that all buildings which were given

(1) [1971).1 s.c.R. 114.
PUNJAB TIN co. v• .CENTRAL GO\'T. (Venkataramiah, J.) 443

sewerage conne~tion within five years prior to January 31,1973 or
buildings to which such sewerage connection could not be given A
but ·which were given electric connection within five years prior
to January 31,1973 ·or in any other case buildings which were
occupied within five years prior to January 31,1973 should also be
treated as having been exempted · from the operation of the Act for ·
a period of five years from the respective dates applicable to them B
In other words, it is urged by them that all the buildings which
satisfied any of the above conditions on or after January 31,1968
would be entitled to the exemption in question for a period of five
years. It• is further contended by them that any decree for eviction,
that may have been obtained .by them in respect of such buildings
in civil courts in suits instituted by them during the period of such c
exemption would be executable notwithstanding the provisions
contained in Section 13 of the Act, '
•
All laws which affect substantive rights generally operate pros•
pectively and there is a presumption against their retrospectivity if D
they affect vested rights and obligations unless the legislative intent
is clear and compulsive. Such retrospective effect may be given.
where there are express words giving retrospective effect or where
the language used necessarily implies that such retrospective opera·
• >- tion is intended. Hence the question whether a statutory provision
E
has retrospective effect or not depends priil.J.arily on the language in
which it is couched, If the language is clear and unambiguous
effect will have to be given to the provision in question in accordance
with its tenor. If the language is not clear then the Court has .to
·decide whether in the light of the surrounding circumstances retro-
spective effect should be given to it or not. .
•.. F
In these cases the document which has .got to be construed is
a notification issued under section 3 of th~ Act ·by the Chief
Commissioner who. is only a delegate of the Legislature. It is to· be .
noted that there is no dispute' that as soon as the Act came into
force on November 4, 1972 an' the buildings which had be.en cons- G
tructed prior to that date canie within the scope of_ the Act. The
Act also applied to all the buildings which were constructed there-
after and before ·January 31, 1973 on whi~h date the notification
was issued. The point for consideration is whether on the issue ·of
the notification on January 31, 1973 any such buildiog to which the
e
Act already applied was taken out of the operation of the Act. A
reading of the notification does not clearlr indicate that tbe Chief
444 SUPREME COURT REPO~TS
•
(1984] 1 s.c.R.

Comtnissioner intende4 to grant exemption in respect of any of the
A buildings constructed prior to January 31, 1973. While' the words
'buil<liiigs constructed in the u.rban area of Chandigarh for a period
of five years with effect from the date the sewerage connection is
granted' which are found in the notification. refer to all the buildings
to which sewerage connection is granted after the date of the noti·
B fication, they do not necessarily mean and include buildings which ·
had been given sewerage connection within five years prior to that
date. There was aiso no compelling reasop for givqig exemption
to buildings which had already been constructed as the object of
issuing,the notification as mention\XI earlier was only to encourage
construction of new buildings thereafter and not to take aw.ay the
c statutory protection already extended to the tenants of .buildings
which had ·col)le into existence prior to January·31, 1973. The
iandlords of these buildings. have, however, relied upon the decision
of this Court in.Om Prakash Gupta v. Dig Vajendrapal Gupta(') in
support of their contention. · In that case, the Court had to construe
the provisions of sub-section (2) of section 2 of the U.P. Urban
0
Buildings ,(Regulation of Letting, Reut and Eviction) Act, 1972
(U.P. Act 13 of 1972), the relevant part of which read thus :

"Except as pr~vided in sub-section (5) of section 12,
sub•section (I-A) of section 21, sub-section (2) of section
E 24; sections 24-A, 24-B, 24-C or sub-section (3) of
section 29, nothing in this·Act shall apply to a buiiding
durmg a period of ten years from 'the d·ate on which its
construction. is completed :
'
xxx xxx xxx
Iixtil(!nation !. -For the purposes of this sub-section,-
(a) the construction of a building shall be deemed to
have been completed on;the date on .which the comple•
tion thereof is reported to or 11therwise recorded by the.
local authority having jurisdiction, and in the case of a
building subject to assessment, the date on which the
first assessment thereof comes into effect, and where the
said date~ are different, the earliest of ihe said dates, and
ln the absence of any such report, record or assessment,
the date on which it is actually occupied. (not including
H occupation merely for the purposes of supervising the

(I) [1982) 2 S.C.C. 61
. PUNJAB TIN.CO. v. CENTRAL GOVT. (Venkataramiah, J.) 445

construction or guarding the building under construction)
for the first time."
•
. Jn the above case, the Court held that the aforesaid provlS!on
bad retrospective effect and ·applied to buildings constructed prior
to the date on which the said
. Act . came into force provided they
satisfied the conditions mentioned therein. B
The above provision appears as part of section 2 of the U.P.
Act referred to above which exempted many. existing and future
buildings which satisfied the condition.~ referred to in c\au~es (a) to
(f) of sub-section (1), sub-section (2) and sub-section (3) thereof.
The said exemption was given by the statute itself. It may be stated a
here that at the instance of one of the parties to .the Special Leave
Petition (Civil) No. 3573 of 1979 (Suresh Chand v. Gulam Chisti)
which was. disposed of by the same judgment, a review of the above
judgment bas been granted and by an order .made on October 7,.
'1983 the case is directed to be reheard. Moreover on the construc- D
tion of the above provision, there are two earlier decisions-one in
Raton Lal Shinghal v. Smt. Murli Devf(I) decided on August 21, 1979
in which it is held that the said provisiOn bas no retrospective effect
but is only prospective in operation and another in Shri Ram Saroop
Roi v. Smt. Li/avati(') decided on May 7, 1980 in which 'a contrary
view is taken. Section 2. of the ·said U.P. Act requires to be E

-
considered in the setting in which it appears. We are of the .view·
that any decision on that provision has to be confined to that
provision and cannot be extended to the present case by ~nalogy.

Ther~ is one other distinction. which is. soughi to be made F
between -an exemption granted by a notification which is issued by a
· delegate of the Legislature who is ~ot given power by the Legislature
to issue a notification having retrospective effect iind an exemption
granted by the Legislature itself on the basis of the observations
made in Strawboard Manufacturing Co. Ltd, v. Gupta Mill Workers
Union('), Di. Indramani Pyarelal Gupta v. W. R. Nathu. & Ors.(') and G
Income-tax Officer, Al/eppey v. M,C. Ponnoose & Ors.(')

(1) A.I.R. 1980 S.C. 635
(2) [1980) 3 s.c.c. 452
(3) [1953) S.C.R. 439
(4) [1963] l S.C.R. 721
(5) [1970)1 S.C.R, 67~
• 446 SUPREME COIJRT REPORTS [1984] l s.c.R.
. I
·It is not necessary to deal with !he above point any further
since. we are of the view that the notification .impugned in these
cal!CS stands by itself and it is not to be construed in the background ·
of the provisions of section 2 of the U.P.. Act referred to above.

On a careful consideration of the question we feel that the
B benefit of the notification cannot be extended to buildings which
were given the sewerage connection or eleCtric connection or which
were ·occupied, as the case may be,· prior to Januacy 31, 1973.
Those buildings are governed by the provisions of the Act and any
decrees passed in respect of them are governed by 'section 13 of the
Act; J'he notification applies only to those buildings w4ich arc
c given sewerage connection or electric 'connection or which are
occupied, as. the case may be, on or after January 31, 1973.,
,·

· In the result we declare that section 3 of the Act and the
· notification dated January 31, 1973 and the other notifications
D impugned in these cases are valid and effective. We further d~clare ·
that the exemption granted by the notification dated January 31,
. 1973 applies ·only to those buildings which are given sewerage
connection or electric connection or· which are occupied, as the case
may be, .oi;i or after January 31, 1973 and not to those· buildings
which satisfied any of the said conditions before January 31, 1973.
E
.
The petitions are accordingly dispos~d of. No costs.
'

H.S.i&. Pe titiuns dismissed.