PETITIONER:
M.L. MANCHANDA & ORS.
Vs.
RESPONDENT:
UNION TERRITORY OF CHANDIGARH & ORS.
DATE OF JUDGMENT17/03/1977
BENCH:
SINGH, JASWANT
KRISHNAIYER, V.R.
CITATION:
1977 AIR 1353 1977 SCR (3) 327
1977 SCC (2) 640
ACT
Punjab Industrial Housing Rules, 1972, R.4(3), whether
ultra vires the Punjab Industrial Housing Act, 1956--Whether
operates retrospectively.
HEADNOTE
The appellants and respondents Nos. 3 to 37 herein, were
allottees of houses in Chandigarh constructed by the State
Government for low paid industrial workers under the
Industrial Housing Scheme subsidised by the Central Govern-
ment. The Labour Inspector, Union Territory, Chandigarh
gave them notices in terms of the proviso to, rule 4(3) of
the Punjab Industrial Housing Rules, 1956, as amended vide
Notification dated November 7, 1972, to. show cause why
their allotments should not be cancelled. The income of
each of them exceeded Rs. 350/- per mensem, which disenti-
tled them to retain their allotments. The appellants and
the said respondents filed a joint petition in the High
Court for a writ to quash the amendment to rule 4, and to
restrain the Government from cancelling their allotments and
evicting them. The writ petition was dismissed. The appel-
lants contended firstly, that rule 4(3) was ultra vires the
Punjab Industrial Housing Act, 1956 as it took out industri-
al workers with income exceeding Rs. 350/- p.m. from the
scope of section 2(e) of the Act which defines industrial
workers; and secondly, that the authority competent to make
rules u/s 24 of the Act cannot frame rules having retrospec-
tive effect, and as the amended rule 4(3) operates retro-
spectively it is invalid
Dismissing the appeal by special leave, the Court,
HELD:
(1) The allotment of accommodation to an industrial
worker is not unconditional but is subject to conditions
which can be changed unilaterally by the Government from
time to time by altering the rules in exercise of the
powers conferred on it under section 24 of the Act. Section
24 specifically empowers the State Government to make rules
to provide inter alia for the manner of allotment of accom-
modation and conditions relating to its occupation. The
impugned amendment which squarely falls within the purview
of the aforesaid provisions of section 24, was validly made,
and was not ultra vires. [331 G-H, 331 (a)-C]
(2) Section 7 of the Act embodies a deeming provision
and gives a mandate to treat a person as an unauthorised
occupant not only if he ceases to be an industrial worker
under the Act, but also if being an allottee, he ceases to
fulfil any of the prescribed conditions then in force,
including the one relating to the limit of his income, and
thereby becomes amenable to action under section 9(2) of the
Act. [331(a)-A-B]
(3) The proviso to rule 4(3) clearly shows that the
allotment of an industrial worker whose income exceeds Rs.
350/- per mensem is to stand cancelled not from the date
when his income started exceeding Rs. 350/- per mensem but
on the expiry of one month’s notice in writing of the can-
cellation. The rule is not intended to operate retrospec-
tively on industrial workers who had been allotted and were
in occupation of industrial houses immediately before,
328
the amendment of the Punjab Industrial Housing (Chandigarh
First Amendment) Rules, 1972. [331(a) E-F]
The Court observed
The scheme being meant for the benefit of the low paid
industrial workers and the number of the houses constructed
thereunder being very limited, the Government could legiti-
mately evolve the method which it did, to disentitle indus-
trial workers whose monthly income was relatively large, to
retain the houses. [331 (a) -C-D]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1744 of 1976.
(Appeal by Special Leave from the Judgment and Order
dated 28.4.1975 of the Punjab & Haryana High Court in Civil
Writ Petition No. 1819/75)
M.K. Ramamurthi and J. Ramamurthi, for the appellants.
Madan Mohan, for the respondents 4-8, 10-25, 27-30 & 32-36.
B.D. Sharma & R.N. Sachthey, for respondents 1-2.
The Judgment of the Court was delivered by
JASWANT SINGH, J.--This appeal by special leave which is
directed against the judgment and order dated April 28,
1975, of the High Court of Punjab and Haryana at Chandigarh,
dismissing Civil Writ Petition No. 1819 of 1975 filed by
the appellants and respondents 3 to 37 herein, who are
industrial workers employed in Factories situate in the
industrial area in Chandigarh.
The facts leading to this appeal are: In 1956, the
Legislature of the then State of Punjab enacted what is
called the Punjab Industrial Housing Act, 1956 (Punjab Act
16 of 1956) (hereinafter referred to as ’the Act’) to pro-
vide for allotment, recovery of rent, eviction and other
ancillary matters in respect of houses constructed under the
subsidised Industrial Housing Scheme for industrial workers
in the State of Punjab. In exercise of the powers conferred
on it under section 24 of the Act, the State Government
made rules called the Punjab Industrial Housing Rules, 1956
(hereinafter referred to as the Rules’). Rule 4 of the
Rules as originally made ran as under:---
"4. Eligibility for allotment--(1) Two-
roomed tenements shall be allotted to indus-
trial workers whose income exceeds Rs. 100 per
mensem.
(2) One-roomed tenements shall be allotted
to workers with an income not exceeding Rs,100
per mensem."
329
This rule was amended vide Notification
No. 4119-2HG-6C 29333 dated October 5, 1960.
The rule, after its aforesaid amendment, read
as under:--
"4. Eligibility for allotment--(1) Two roomed
tenements shah be allotted to industrial
workers whose income does not exceed Rs.
350.00 per mensem.
(2) One roomed/small two roomed tenements
shall be allotted to workers with an income
not exceeding Rs. 250.00 per mensem; provided
that where sufficient number of industrial
workers with income exceeding Rs. 250.00 per
mensem is not forthcoming for allotment, the
Labour Commissioner may, with the approval of
the State Government, allot two roomed tene-
ments to industrial workers with an incOme not
exceeding Rs. 250.00 per mensem.
Notes: In towns, where only roomed/small
two roomed tenements have been built, applica-
tions should first be invited from such work-
ers only, whose monthly income does not exceed
Rs. 250.00. It is only after the demand from
these workers has been met that unallotted
tenements should be made available for allot-
ment to workers, whose income exceed Rs.
250.00 per mensem. Where these tenements are
given to higher paid workers the normal subsi-
dised rent should be charged from them till
such time as the regular two roomed tenements
do not become available for them. When the
two-roomed tenements become available the
higher paid workers must be removed from the
smaller tenements, failing which they should
be charged the full economic rent.
(ii) In cases where after allotment of one
roomed/small two roomed tenements a worker
crosses the wage limit of Rs. 250.00 per
mensem, he may be allowed to continue in
occupation of the house allotted to him on
payment of subsidised rent, till such time as
the regular two roomed house does not become
available, in other respects the procedure as
prescribed in note (i) should be followed.
(iii) Two-roomed tenements should in the first
instance, be offered from allotment to workers
whose income is between Rs. 251.00 and Rs.
350.00 per mensem."
Vide Notification No. 7480-4H(8)-72/21542 dated Novem-
ber 7, 1972, the Chief Commissioner, Union Territory, Chand-
igarh, made in exercise of the powers conferred by section
24 of the Act what are called the Punjab Industrial Housing,
Chandigarh (First Amendment) Rules, 1972 adding the fol-
lowing, ,after sub rule (2) in Rule 4 of the Rules:--
330
"(3) An industrial worker shall become
ineligible to retain the industrial house
allotted to him from the date his income
exceeds Rs. 350/- per mensem and his allotment
of it shall stand cancelled with effect from
that date.
Provided that in case such an industrial
worker has been allotted and is in occupation,
of an industrial house immediately before the
commencement of the Punjab Industrial Hous-
ing (Chandigarh First Amendment) Rules,
1972, his allotment shall be cancelled by the
Labour Commissioner after giving him one
month’S notice in writing of such cancella-
tion.
Chief Commissioner also ordained that the
following shall be added in form ’C’ of the
Rules after condition (24) :--
"(25) The allottee shall become ineligible
to retain the industrial house, allotted to
him from the date his income exceeds rupees
350 per mensem and his allotment shall be
deemed to have been cancelled from that date."
The appellants and the aforesaid respondents, who were
allottees of houses in Sector 30, Chandigarh constructed by
the State Government for occupation of industrial workers
under the Industrial Housing Scheme subsidised by the
Central Government and declared under section 3 (2) of the
Act to be houses covered by the provisions of the Act were
given notices. by the Labour Inspector, Union Territory,
Chandigarh, in terms of the proviso to sub-rule (3) of rule
4 of the Rules, as amended by the aforesaid Notification
No.. 74804H(8)-72/21542 dated November 7, 1972, calling
upon them to show cause as to why the allotment of houses
made to them should not be cancelled as the income of each
one of them exceeded Rs. 350/- per mensem which disentitled
them to retain their respective allotments. The appellants
and the aforesaid respondents thereupon filed a joint writ
petition, being writ petition No. 1819 of 1975 under Arti-
cles 226 and 227 of the Constitution in .the High Court of
Punjab and Haryana for issue of an appropriate writ, order
or direction quashing the said notices and notification No.
7480-4H(8)-72/21542 dated November 7, 1972 amending Rule 4
of the Rules and restraining respondents 1 and 2 from pro-
ceeding with the cancellation of their respective allotments
and evicting them from the houses. They contended that the
aforesaid rule 4 as amended was ultra vires the Act in so
far as it carved out an exception to the statutory defini-
tion of "industrial worker’ as contained in section 2(e) of
the Act within the scope of which they admittedly fell. The
High Court repelled their contention and dismissed their
writ petition by its judgment dated April 28, 1975. Ag-
grieved by this judgment and order, the appellants and the
said respondents made an application to the High Court for
issue of a certificate of fitness under Article 133 of the
Constitution which was refused by the High Court by its
order dated May 9, 1975. Thereupon they moved this Court for
special leave under Article 136 of the Constitution which
was granted.
331
Appearing in support of the appeal, Mr. Ramamurthy has-
reiterated before us that since the appellants and respond-
ents 3 to 37 are admittedly industrial workers as defined in
clause (e) of section 2 of the Act, the impugned rule 4
which is designed to cancel their allotment, on the ground
that their salary exceeded Rs. 350/- per mensem is clearly
repugnant to that clause and as such utra vires and invalid
as it takes out industrial workers with income exceeding Rs.
350/per mensem from the scope of the definition. He has
further contended that since the authority competent to make
rules under section 24 of the Act cannot frame any rule
having a retrospective effect and the impugned rule--rule
4(3) as amended operates retrospectively, the same is in-
valid. He has lastly urged that the impugned notification
is also invalid as if makes hostile and arbitrary discrimi-
nation against industrial workers whose income exceeds Rs.
350/- per mensem, and thereby violates the guarantee en-
shrined in Article 14 of the Constitution.
We shall deal seriatim with all the three contentions
raised by Mr. Ramamurthy. Before embarking on that task,
we consider it appropriate to scan the scheme of the Act.
Section 3 of the Act clearly states that the Act shall be
applicable to houses constructed by the State Government for
the occupation of industrial workers under the Industrial
Housing Scheme subsidised by the Central Government. The
scheme, as evident from the affidavit of the Home Secre-
tary, Chandigarh Government, is meant for the benefit of the
low aid industrial workers and economically weaker sections
of the community. Section 9(1) of the Act provides that the
occupation by any person of a house shall at all times be
subject to such conditions relating to its occupation as may
be prescribed, or as may be intimated from time to time by
the Labour Commissioner. Section 7 of the Act sets out the
circumstances in which a person shall be treated to be in
unauthorised occupation of any house. Clause (b) of the
section explicity states that a person shall be deemed to be
in unauthorised occupation "Where being an allottee he has
by reason of cancellation of an allotment under sub-sec-
tion (2) of section 9 ceased to be entitled to occupy the
house". Sub-section (2) of section 9, which is necessary
to be referred to at this stage and which because of the
non-obstante clause contained in its opening part overrides
all other laws for the time being in force, authorises the
Labour Commissioner after giving notice to the allottee and
considering the explanation tendered by him to cancel the
allotment under which a house is held or occupied by him.
Section 24 of the Act not only empowers the State Government
generally to make rules to effectuate the purposes of the
Act but also specifically confers on it the power to make
rules to provide inter alia for the manner of allotment of
accommodation and conditions relating to its occupation [see
section 24(2)(ii)] as also for the matters which are to be
or may be prescribed [see section 24(2)(x)]. A conspectus
of the aforesaid provisions of the Act leaves no room for
doubt that the allotment of accommodation to an industrial
worker is not unconditional but is subject to conditions
which can be changed unilaterally by the Government from
time to time by altering the rules in exercise of the powers
conferred on it
331(a)
under section 24 of the Act. Section 7 of the Act which
embodies a deeming provision gives a mandate to treat a
person as an unauthorised occupant not only if he ceases to
be an industrial worker under the Act but also if being an
allottee, he ceases to.be entitled to occupy the accommoda-
tion by reason of cancellation of the allotment under sub-
section (2) of section 9 of the Act. A combined reading of
sections 7 and 9 of the Act goes to show that if at any time
a person becomes an unauthorised occupant of the house by
reason of his ceasing to be an industrial worker or by
otherwise ceasing to fulfil any of the prescribed conditions
then in force including the one relating to the limit of his
income, he becomes amenable to action under section 9(2) of
the Act. The result is that even though the allottee may
continue to be an industrial worker, still the allotment
under which he holds a house can be cancelled if his occupa-
tion becomes un-authorised on any one of the grounds laid
down in section 7 of the Act. We are, therefore, satis-
fied that the impugned amendment which squarely falls within
the purview of the aforesaid provisions of section 24 of the
Act was validly made and the contention urged by Mr. Rama-
murthy that it is ultra vires is misconceived and untenable.
We may state here in passing that the aforesaid scheme being
meant for the benefit of the low paid industrial workers and
the number of the houses constructed thereunder being very
limited, the Government could legitimately evolve the method
which it did to disentitle industrial workers like the
appellants whose monthly salaries appear to range between
Rs. 974.71 and Rs. 1861.27 and the aforesaid respondents
whose monthly income is also relatively large to retain the
houses in question.
The contention of Mr. Ramamurthi that the impugned rule
is retroactive in operation is also devoid of merit. A
careful study of the proviso to rule 4(3) of the Rules which
appears to have been inserted to allay fears and remove
misapprehensions would show that the rule is not intended to
operate retrospectively on industrial workers who had been
allotted and were in occupation of industrial houses immedi-
ately before the amendment of the Punjab Industrial
Housing (Chandigarh First Amendment) Rules, 1972. It une-
quivocally states that allotment of an industrial worker who
is in occupation of an industrial house in pursuance thereof
immediately before the amendment of the Punjab Industrial
Housing (Chandigarh First Amendment) Rules, 1972 shall not
be cancelled without one month’s notice in writing. The
proviso therefore clearly shows that the allotment of an in-
dustrial worker whose income exceeds Rs. 350/- per mensem is
to stand cancelled not from the date when his income started
exceeding Rs. 350/- per mensem but on the expiry of one
month’s notice in writing of the cancellation. The second
contention raised by Mr. Ramamurthi is also, therefore,
repelled.
The third contention advanced by the learned counsel on
behalf of the appellants not having been raised before the
High Court cannot be permitted to be raised at this stage.
The contention can also not be allowed to be raised in view
of the Presidential Order dated June 27,
331(b)
1975 promulgated under clause (1) of Art. 359 of the Consti-
tution suspending inter alia Article 14 of the Constitution
for the period during which the proclamation of emergency
made under clause (I ) of Article 352 of the Constitution on
December 3, 1971 and on June 25, 1975 are both in force.
For the foregoing reasons, we do not find any merit in
this appeal which is dismissed but in the circumstances of
the case without any order as to costs. Counsel for the
appellants submits that he may be given time for vacating
the premises. We grant time till 31st August 1977 on the
undertaking given by the counsel that vacant possession will
be given on or before that date.
M.R. Appeal dismissed.
332