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1987 Supreme(Bom) 380
IN THE HIGH COURT OF BOMBAY
(Nagpur Bench)
M.S. Deshpande, J.
Forest Development Corporation of Maharashtra Limited.... Petitioner.
Versus
State of Maharashtra and others.... Respondents.
Writ Petition No. 1583 of 1987, decided on 12-11-1987.
Advocates appeared :
S.C. Mehadia, for petitioner.
G.D. Patil, A.G.P., for respondent No. 1.
Clauses 4 and 5 of the C.P. and Berar Letting of Houses and Rent Control Order, 1949 are constitutional and separable from clauses 6, 7, and 7-A, which have been struck down as unconstitutional. The absence of guidelines in clauses 6, 7, and 7-A does not render clauses 4 and 5 unconstitutional, as the Rent Controller is still required to act judicially in determining the fair rent.
Headnote:
RENT CONTROL - C.P. AND BERAR LETTING OF HOUSES AND RENT CONTROL ORDER, 1949 - CLAUSES 4 AND 5 - CONSTITUTIONALITY - CHALLENGE - VALIDITY - FAIR RENT - DETERMINATION - GUIDELINES - ABSENCE - ARBITRARY POWER - JUDICIAL DETERMINATION - CONTROL OF LETTING - CHAPTER III - STRIKING OUT - EFFECT - RENT REGULATION - IMPOSSIBILITY - SEPARABILITY OF CHAPTERS II AND III.
Fact of the Case:
The petitioner, a company, challenged the constitutional validity of clauses 4 and 5 of the C.P. and Berar Letting of Houses and Rent Control Order, 1949 (Rent Control Order) as violative of Article 14 of the Constitution. The petitioner argued that with the striking down of clauses 6, 7, and 7-A of the Rent Control Order, which provided guidelines for fixation of fair rent, the Rent Controller would be left with absolute and arbitrary power to fix rents.
Finding of the Court:
The court held that clauses 4 and 5 of the Rent Control Order were separable from clauses 6, 7, and 7-A, which had been struck down as unconstitutional. The court found that clauses 4 and 5 provided a mechanism for determining whether the rent was insufficient or excessive, while clauses 6, 7, and 7-A provided guidelines for fixing the fair rent. The court also held that the absence of guidelines in clauses 6, 7, and 7-A did not render clauses 4 and 5 unconstitutional, as the Rent Controller was still required to act judicially in determining the fair rent.
Issues: 1. Whether clauses 4 and 5 of the Rent Control Order were inextricably mixed up with clauses 6, 7, and 7-A, which had been struck down as unconstitutional. 2. Whether the absence of guidelines in clauses 6, 7, and 7-A rendered clauses 4 and 5 unconstitutional.
Ratio Decidendi: 1. The court found that clauses 4 and 5 of the Rent Control Order were separable from clauses 6, 7, and 7-A, which had been struck down as unconstitutional. The court reasoned that clauses 4 and 5 provided a mechanism for determining whether the rent was insufficient or excessive, while clauses 6, 7, and 7-A provided guidelines for fixing the fair rent. The court also found that the mixing up was of Clauses 6 (2), 7 (1) and 7-A with Clause 6 (1) and 7 (1) and not of clauses 4 and 5 with Clauses 6, 7 and 7-A of the Rent Control Order. 2. The court held that the absence of guidelines in clauses 6, 7, and 7-A did not render clauses 4 and 5 unconstitutional, as the Rent Controller was still required to act judicially in determining the fair rent. The court noted that a proceeding for fixation of fair rent of the house under clauses 4 and 5 of the Rent Control Order is a judicial or, at any rate, a quasi-judicial proceedings, and a duty is, therefore, cast upon the Rent Controller to act judicially in determining the fair rent of the house which is clear from the fact that this order is appealable under clause 21 (1) of the Rent Control Order, and he, therefore, cannot act arbitrarily in the said proceeding because absence of arbitrariness is a since qua non of a judicial determination which must be judicious.
Final Decision: The court dismissed the petition, holding that clauses 4 and 5 of the Rent Control Order were constitutional and that the absence of guidelines in clauses 6, 7, and 7-A did not render clauses 4 and 5 unconstitutional.
2. The petitioner is a Company incorporated under the Indian Companies Act. The respondent Nos. 2 to 5 formed a joint Hindu family and owned the building, which has been let out to the petitioner since 1974 at Rs. 5,300/- per month. Respondent Nos. 2 to 5 (hereinafter called as the respondents) wanted a higher rent, but as the petitioner did not agree, they filed an application under Clauses 4 and 5 of the Rent Control Order for fixation of fair rent at Rs. 3.50 per sq.ft. or in the alternative at Rs. 20,000/- per month. The petitioner opposed the application on several grounds, one of them being that as Clauses 6, 7 and 7-A of the Rent Control Order have been struck down by a Division Bench of this Court in (Omprakash Mulchand Khatri v. Fattelal Maganlal Company)1, 1986 Mh.L.J. 414 clauses 4 and 5 cannot stand. This contention did not find favour of the Rent Controller, in view of the judgment of a Single Judge of this Court in (Oyaldas Topandas v. Shrikant Ganpatlal Gupta)2, 1986 Mh.L.J. 706 which, later, came to be affirmed in Letters Patent Appeal No. 141 of 1986 by a Division Bench of this Court on 3rd October, 1986. The Rent Controller over-ruled the objection raised by the petitioner, and the petitioner, therefore, by this writ under Article 226 of the Constitution, questions the validity of the order and challenges the vires of clauses 4 and 5, mainly on the grounds that a Clauses 6, 7 and 7A of the Rent Control Order have already been struck down, and as they provided certain guidelines for fixation of fair rent, which no longer exist, the Rent Controller would be left with absolute and arbitrary power to fix rents in the guise of that rent being a fair rent. It is also contended that the letting of the houses was originally controlled by certain provisions of the Rent Control Order which have been since struck down, and as there is no control on the letting in the existing provision, no restriction can be placed on the contractual rent and the contractual rent cannot be interfered with.
3. It is first necessary to understand what was the provision in the Rent Control Order which related to the fixation of rent and other terms. Under Chapter II, there are several clauses which provide for determination of fair rent. Under Clause 4, when on a written application by the landlord or tenant, the Controller has reason to believe that the rent of any house with in his jurisdiction is insufficient or excessive, as the case may be, he shall hold such enquiry as may be necessary and record a finding. This is the main provision which authorises the Controller to hold an enquiry, if he has reason to believe that the rent is either insufficient or excessive. Under Clause 5, the Rent Controller, upon consideration of all circumstances of the case, including any amount paid before the 1st December, 1952, by the tenant by way of premium or any other like sum in addition to rent, the Rent Controller shall determine the fair rent to be charged for the house, if he finds that the rent of the house is insufficient or excessive. These are the only two clauses which bear upon the question whether the rent is insufficient or excessive and upon such a preliminary finding being recorded, he has to proceed to determine the fair rent. What are the norms to be followed in determining the fair rent are laid down in Clauses 6, 7 and 7-A. These three provisions have been struck down by a Division Bench of this Court on Omprakash's case, 1986 Mh.L.J. 414, following the reasoning in (Prabhakar Tanhaji Rokde v. State of Maharashtra)3, 1985 Mh.L.J. 548, where it was noticed that the House Rent Control Order had becom
