JUDGMENT

SEN, J. This appeal has been heard along with a number of other appeals, special leave petitions and writ petitions. Common questions of law have arisen in all these matters relating to interpretation and constitutional validity of Section 3(c) of the Delhi Rent Control Act, 1958.

2. The Delhi Rent Control Act, as amended by Act No. 52 of 1988 came into effect from 1-12-1988. Section 3(c) of the amended Act provided that the provisions of the Delhi Rent Control Act will not apply to any premises whose monthly rent exceeded Rs 3500.

3. The appellant thereupon filed a writ petition in the Delhi High Court challenging the validity of the newly inserted Section 3(c) of the Act. The appellants writ petition was heard along with a batch of other writ petitions. By a judgment dated 11-2-1991, the Delhi High Court held that Section 3(c) was a valid piece of legislation and did not contravene any of the provisions of the Constitution. Following its judgment in Civil Revision No. 470 of 1981 (Nirmaljit Arora v. Bharat Steel Tubes), it also held that Section 3(c) was prospective and did not affect the cases that were pending on the date it came into operation.

4. The present batch of appeals are directed against the judgment of the Delhi High Court dated 11-2-1991.

5. Section 3 of the Act lays down:

"3. Act not to apply to certain premises.- Nothing in this Act shall apply;

(a) to any premises belonging to the Government;

(b) to any tenancy or other like relationship created by a grant from the Government in respect of the premises taken on lease, or requisitioned, by the Government:

Provided that where any premises belonging to Government have been or are lawfully let by any person by virtue of an agreement with the Government or otherwise, then, notwithstanding any judgment, decree or order of any court or other authority, the provisions of this Act shall apply to such tenancy.

(c) to any premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees; or

(d) to any premises constructed on or after the commencement of the Delhi Rent Control (Amendment) Act, 1988, for a period of ten years from the date of completion of such construction."

6. The main contention of the appellant is that the provisions of subsection (c) of Section 3 is ultra vires Article 14 of the Constitution. It has been contended that the legislature has not appreciated the present-day realities of landlord-tenant relationship. If landlords are given a free hand to raise the rent of the premises then they will abuse this freedom and will demand unreasonable and exorbitant rents. The classification of properties on the rental basis was arbitrary and discriminatory. In any event, the cut-off point of Rs 3500 for the purpose of exclusion from the benefit of the rent control legislation was fixed arbitrarily. Lastly, it was contended that provisions of Section 3(c) are prospective and will not apply to premises which were already tenanted on the date on which the Amending Act came into force.

7. Before dealing with the various contentions raised specifically, it will be useful to note certain facts leading to the insertion of sub-section (c) in Section 3 of the Delhi Rent Control Act.

8. Various representations had been received by the Government about the hardship and injustice caused by the provisions of the Rent Act. An Economic Administration Reforms Commission set up under the chairmanship of Shri L.K. Jha went into this question and its Report No. 11 presented to the Government in September 1982, suggested a number of changes in the rent control law. The Commission pointed out that the freezing of rentals at old historic levels, the excessive protection of tenancy rights and the extreme difficulty of recovering possession of the accommodation even for the owners own use had (a) hit hard the house-owner of modest means; (b) depressed property values and affected adversely the revenues of municipal bodies and the State and Central