Andhra HC (Pre-Telangana)
Satish Chandra Makan vs Dr. S.V.S. Sastry And Anr. on 7 October, 2005
Equivalent citations: 2006(1)ALD145
JUDGMENT C.V. Ramulu, J.
1. The only substantial question of law that falls for consideration in this Second Appeal is whether the appellate Court was justified in refusing to consider the validity of G.O. Ms. No. 636, General Administration (Accommodation-A) Department, dated 29-12-1983 on the premise that the said issue has already been decided by a Full Bench of this Court in M. Sreeramulu v. Tahera Yousuf Kadri (FB), and in not examining the validity of the said G.O. in terms of the decision of the Supreme Court reported in Malpe Vishwanath Acharya v. State of Maharashtra .
2. A few facts, which are relevant, may be noticed as under:
3. The appellant is the defendant/ tenant. Respondent No. 1/landlord filed a suit in O.S. No. 3756 of 1997 on the file of the learned XIX Junior Civil Judge, City Civil Court, Hyderabad for delivery of vacant possession of the suit schedule property, for arrears of rent and for future mesne profits. It was the case respondent-plaintiff that he is the owner of flat bearing No. 5-9-12/1/ B-4, Samrat Complex, Saifabad, Hyderabad. He let out the said flat to the appellant-defendant on a monthly rent of Rs. 2,000/-exclusive of maintenance and electricity charges, water tax etc. The tenancy is from month to month and the rent is payable by the end of every calendar month. The appellant agreed to deposit the rent in the Recurring Deposit Account of the respondent, but he was irregular in depositing the rent. As per the account copy of Andhra Bank, appellant did not deposit rent from April, 1995 to March, 1996. Thereafter also from April, 1996, appellant failed to pay rents. Therefore, respondent-plaintiff intended to discontinue the tenancy of appellant and issued a quit notice under Section 106 of the Transfer of Property Act on 23-5-1997 terminating the tenancy with the appellant ' by 30-6-1997 and also demanded the appellant to vacate and deliver the vacant" possession of the property by 30-6-1997. The appellant-defendant resisted the claim of the respondent-plaintiff and stated that the notice dated 23-5-1997 is not in accordance with the stipulation and it is not tenable for the respondent-plaintiff to call upon the appellant-defendant to vacate the suit premises with effect from 1-7-1997. The demised flat has been constructed more than 20 years prior to the filing of the suit. The agreed rent has been Rs. 1,000/- per month. So, in view of G.O. Ms. No. 636, dated 29-12-1983, the Rent Controller has jurisdiction to grant the relief, the Civil Court has no jurisdiction to entertain the matter and the suit deserved to be dismissed due to inherent lack of jurisdiction. There is no dispute as to the tenancy between himself and the respondent. On the basis of the above pleadings, the following issues framed for trial:
1. Whether the quit notice dated 23-5-1997 validity terminated the tenancy of the defendant ?
2. Whether the plaintiff is entitled to the relief of delivery of vacant possession of the suit schedule property ?
3. Whether the plaintiff is entitled to recover the arrears of rent of Rs. 30,000/- from April, 1996 to June, 1997 ?
4. Whether the plaintiff is entitled to claim future mesne profits ?
5. To what relief ?
4. Before the trial Court, on behalf of the plaintiff, he examined himself as P.W.1 and got marked Exs.A1 to A12. On his behalf, the defendant examined himself as D.W.I besides examining D.W.2 and got marked documents - Exs.B1 to B20. On an elaborate consideration of the entire evidence, . both oral and documentary, the trial Court decreed the suit with costs directing the appellant-defendant to deliver the vacant possession of the suit property within three months from the date of judgment i.e., 20-2-2001. The suit was further decreed for a sum of Rs. 30,000/- towards arrears of rent. The suit was also decreed for future mesne profits @ Rs. 2,000/- per month from the date of suit till the date of realization. Aggrieved by the same, the defendant filed A.S. No. 166 of 2001 on the file of the learned Chief Judge, City Civil Court, Hyderabad. Before the appellate Court, a ground was raised whether the civil Court has no jurisdiction to order eviction against the defendant on the premise that G.O. Ms. No. 636, dated 29-12-1983 applies to the facts of the present case. Conversely, the G.O. granting exemption for some of the buildings is unconstitutional, invalid and void. By an order dated 29-8-2003 in C.R.P. No. 3966 of 2003, this Court directed to implead the Government of Andhra Pradesh represented by its Secretary, General Administration Department, Hyderabad as a party-respondent. Thus, the appellate Court impleaded the Government of Andhra Pradesh as 2nd respondent in A.S. No. 166 of 2001. The appellate Court while confirming the findings of fact as to the termination of tenancy through the quit notice-Ex.A2 and default committed by the appellant-tenant in payment of rents of the suit schedule property also considered as to whether G.O. Ms. No. 636, dated 29-12-1983 issued by the State of Andhra Pradesh while exercising its powers under Section 26 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short 'the Rent Control Act') has become illusory, quite arbitrary and unreasonable with the passage of time and held that in view of the decision reported in M. Sreeramulu's case (supra) there is no need to consider the vires of the said G.O., or there is any need to refer the matter to the High Court for its opinion and thus dismissed the appeal.
5. learned Counsel for the appellant raised the above substantial question of law for consideration. It is his submission that though the substantial question of law arises out of the proceedings in a civil suit, nothing prevents the Court to examine the issue on the touchstone of constitutionality. The question of any pleading, leading of evidence and issue being framed does not arise in view of Order XXVII-A of the Code of Civil Procedure. A Governmental Order issued under any statute or otherwise can be challenged before the civil Court. The Court can take judicial notice of the time lag between the G.O. and the realities in the society as to escalation of rent. It is contended that Rs. 1,000/- per month rent what was fixed under G.O. Ms. No. 636, dated 29-12-1983 had become illusory with passage of time. Therefore, the rent of Rs. 2,000/- per month paid by the appellant as on the date of filing of the suit or today is much less than Rs. 1,000/- in the year 1983. The Legislature has not taken care of this situation; therefore G.O. Ms. No. 636, dated 29-12-1983 is liable to be declared as illusory and unreasonable due to efflux of time. learned Counsel relied upon the judgments reported in Malpe Vishwanath Acharya 's case (supra) and drawn attention to paragraphs 8, 12, 15, 31 and 32, which read as under:
8. There is considerable judicial authority in support of the submission of learned Counsel for the appellants that with the passage of time a legislation which was justified when enacted may become arbitrary and unreasonable with the change in circumstances. In the State of Madhya Pradesh v. Bhopal Sugar Industries dealing with a question whether geographical classification due to historical reasons would be valid this Court at Page 853 (of SCR) : (at p. 1182 of AIR) observed as follows :
Differential treatment arising out of the application of the laws so continued in different regions of the same reorganised State, did not therefore immediately attract the clause of the Constitution prohibiting discrimination. But by the passage of time, considerations of necessity and expediency would be obliterated, and the grounds which justified classification of geographical regions for historical reason may cease to be valid. A purely temporary provision which because of compelling forces justified differential treatment when the Reorganisation Act was enacted cannot obviously be permitted to assume permanency, so as to perpetuate that treatment without a rational basis to support it after the initial expediency and necessity have disappeared.
12. In Rattan Arya v. State of Tamil Nadu this Court had to consider the validity of Section 30(ii) of the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960 which provided that tenants of residential building paying monthly rent exceeding Rs. 400/- were exempted from the protection of the Act whereas no such restriction was imposed in respect of tenants of non-residential buildings under the said Act. Holding that the tenants of the residential buildings required greater protection and that there was no justification in picking out the class of tenants of residential buildings paying a rent of more than Rs. 400/- per month and to deny them the right conferred generally on all tenants of buildings, residential or non-residential, and for this reason holding Section 30(ii) of the said Act as being violative of Article 14 at Pages 389 and 390 (of SCC) : (at p. 1448) it was observed as follows :
It certainly cannot be pretended that the provision is intended to benefit the weaker sections of the people only. We must also observe here that whatever justification there may have been in 1973 when Section 30(ii) was amended by imposing a ceiling of Rs. 400/- on rent payable by tenants of residential buildings to entitle them to seek the protection of the Act, the passage of time has made the ceiling utterly unreal. 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 have possible got for Rs. 400/- per month in 1973 will today cost at least five times more. In these days of universal, day to day 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 A.P. AIR 1984 SC 121, 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.
15. The aforesaid decisions clearly recognise and establish that a statute which when enacted was justified may, with the passage of time, become arbitrary and unreasonable. It is, therefore, to be seen whether the aforesaid principle is applicable in the instant case. Can it be said that even though the provisions relating to the fixation of standard rent were valid when the Bombay Rent Act was passed in 1947 the said provision, as amended, can still be regarded as valid now?
31. Taking all the facts and circumstances into consideration we have no doubt 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. The said provisions would have been struck down as having now become unreasonable and arbitrary but we think it is not necessary to strike down the same in view of the fact that the present extended period of the Bombay Rent Act comes to an end on 31st March, 1998. The Government's thinking reflected in various documents itself shows that the existing provisions have now become unreasonable and, therefore, require reconsideration. The new bill is under consideration and we leave it to the Legislature to frame a just and fair law keeping in view the interests of all concerned and in particular the resolution of the State Ministers for Housing of 1992 and the National Model Law which has been circulated by the Central Government in 1992. We are not expressing any opinion on the provisions of the said Model Law but as the same has been drafted and circulated amongst all the States after due deliberation and thought, there will, perhaps, have to be very good and compelling reasons in departing from the said Model Law. Mr. Nargolkar assured us that this Model Law will be taken into consideration in the framing of the proposed new Rent Control Act.
32. We, accordingly, dispose of these appeals without granting any immediate relief but we hold that the decision of the High Court upholding the validity of the impugned provisions relating to standard rent was not correct. We however refrain from striking down the said provisions as the existing Act elapses on 31-3-1998 and we hope that a new Rent Control Act will be enacted with effect from 1st April, 1998 keeping in view the observations made in this judgment insofar as fixation of standard rent is concerned. It is, however, made clear that any further extension of the existing provisions without bringing them in line with the views expressed in this judgment, would be invalid as being arbitrary and violative of Article 14 of the Constitution and therefore of no consequence. The respondents will pay the costs.
He also relied upon the judgment arising under the same Act i.e., Rent Control Act, which is reported in Motor General Traders v. State of A.P. AIR 1984 SC 121 and drawn attention of the Court to Paragraphs 15, 16, 21, 22, and 29, which read as under:
15. But it was argued that since Section 32(b) of the Act was valid at the commencement of the Act as held by the High Court in the year 1965, it cannot be struck down at anytime after it has come into force.
16. What may be unobjectionable as a transitional or temporary measure at an initial stage can still become discriminatory and hence violative of Article 14 of the Constitution if it is persisted in over a long period without any justification. The tread of decisions of this Court on the above question may be traced thus. In Bhaiyalal Shukia v. State of Madhya Pradesh , one of the contentions urged was that the levy of sales tax in the area which was formerly known as Vindhya Pradesh (a Part 'C State) on building materials used in a works contract was discriminatory after the merger of that area in the new State of Madhya Pradesh which was formed on Nov. 1, 1956 under the States Reorganisation Act, 1956 as the sale of budding materials in a works contract was not subject to any levy of sales tax in another part of the same new State, namely the area which was formerly part of the area known as State of Madhya Pradesh (the Central Provinces and Berar area). That contention was rejected by this Court with the following observations at Pages 274-275 (of SCR) : (at p. 998 of AIR):
The laws in different portions of the new State of Madhya Pradesh were enacted by different Legislatures, and under Section 119 at the States Reorganisation Act all laws in force are to continue until repealed or altered by the appropriate Legislature. We have already held that the sales tax law in Vindhya Pradesh was validly enacted, and it brought its validity with it under Section 119 of the States Reorganisation Act, when it became a part of the State of Madhya Pradesh. Thereafter, the different laws in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons has been upheld by this Court in M.K. Prithi Rajji v. The State of Rajasthan (Civil Appeal No. 327 of 1956 decided on Nov. 2, 1960) and again in The State of Madhya Pradesh v. The Gwalior Sugar Co., Ltd. (Civil Appeals Nos. 96 and 99 of 1957 decided on Nov. 30, I960).The latter case is important, because the sugarcane cess levied in the former Gwalior State but not in the rest of Madhya Bharat of which it formed a part, was challenged on the same ground as here, but was upheld as not affected by Article 14. We, therefore, reject this argument.
21....With the passage of time, the validity of historical considerations on which Section 87-B is founded will wear out and the continuance of the said section in the Code of Civil Procedure may later be open to serious challenge."
22. In all these cases while it is true that no provision was actually struck down, there is a firm foundation laid in support of the proposition 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 Article 14 of the Constitution. This is a sufficient answer to the contention that if at the time when the Act was enacted Section 32 (b) of the Act was not unconstitutional, it cannot at anytime thereafter be challenged on the ground of unconstitutionality.
29. On a careful consideration of the above question in the light of the above principles we are of the view that the striking down of Clause (b) of Section 32 of the Act does not in anyway affect the rest of the provisions of the Act. The said clause is not so inextricably bound up with the rest of the Act as to make the rest of the Act unworkable after the said clause is struck down. We are also of the view that the Legislature would have still enacted the Act in the place of the Madras Buildings (Lease and Rent Control) Act, 1949 and the Hyderabad House (Rent, Eviction and Lease) Act, 1954, which were in force in the two areas comprised in the State of Andhra Pradesh and it could not have been its intention to deny the beneficial effect of those laws to the people residing in Andhra Pradesh on its formation. After the Second World War owing to acute shortage of urban housing accommodation, rent control laws which were brought into force in different parts of India as pieces of temporary legislation gradually became almost permanent statutes. Having regard to the history of the legislation under review, we are of the view that the Act has to be sustained even after striking down Clause (b) of Section 32 of the Act. The effect of striking down the impugned provision would be that all buildings except those falling under Clause (a) of Section 32 or exempted under Section 26 of the Act in the areas where the Act is in force will be governed by the Act irrespective of the date of their construction."
Yet another judgment arising out of the Rent Control Act reported in Suresh Gir v. K. Sahadev (DB), and drawn attention of the Court to Paragraphs 13, 14 and 35, which read as under:
13. The constitutional validity of Section 4 of the Act came up for consideration before P. Rama Rao, J., in Ataur Rahman case (supra). The learned Judge referred to the aims and objectives of the Act in the following words:
Apart from regulating the tenancy and safeguarding the rights of the tenants against unreasonable or oppressive attempts at evictions and also taking care of the legitimate rights and needs of the landlords, the provision is made for fixation of fair rent for the premises under occupation of the tenant. The Act is a self-contained enactment providing reliefs and remedies before the hierarchy of authorities constituted under the Act. The object of the Act is to interdict unreasonable eviction of tenants and though the slant towards tenants is clearly discernible from the provisions of the Act, the corresponding obligations of tenants with reference to punctual payment of rent, embargo on subletting without express consent of landlord and keeping the demised premises in a fit condition and attempting to defy the title of the landlord are provided. Equally the provision enabling the fixation of fair rent at the instance of either landlord or tenant is made to ensure just and equitable rent.
14. The learned Judge took the view that the criteria laid down in Section 4 for the calculation of fair rent has become wholly unreasonable and the provision is violative of Article 14 of the Constitution. It was observed:
It is fairly settled that the validity of the provision or Act at the inception may not continue forever and the entire complexion may change by efflux of time and changed circumstances. Section 4 envisages the modulation of fair rent in consonance with the rents prevailing in the locality during the period of 12 months prior to 1-4-1944 with marginal increase. This provision evolved at the time when the Act was enacted continued to be same without responding to the sea change in the price structure. It cannot be gainsaid that there is galloping increase in prices and the value of rupee has been eroding fast and the rupee value has fallen down to 1/8th of its original value. In view of the high inflationary tendencies and the rupee value degenerating, the continued adherence to the rents prevailing in 1944 is far removed from real state of affairs. The value of the building is appreciating by leaps and bounds and the cost of living index has been on tremendous increase, thanks to inflation, and the amount fixed with relation to rents in 1944 is depreciating in terms of money value.
In view of the current economic standards and spiraling prices, it is highly unrealistic to cling to old values and rentals in 1944. It looks odd that the rents prevailing in 1943-44 with consolation increase should be applied in 1985-86 and the provision is screaming manifest unreasonableness. In view of the rigidity and dullness and lack of response to changed conditions and pattern of life, Section 4 is stripped of realistic and rational approach. Section 4 by adherence to the rentals of 1944 is totally indifferent to the real state of affairs in the real estate matters. The mode of fixing the fair rent envisaged in Section 4 of the Act is anything but fair.
35. In the light of the foregoing discussion, we hold that Sub-section (2) of Section 4 of the A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 is unconstitutional. Sub-sections (3) and (4) have no independent existence apart from Sub-section (2). The learned Single Judge was right in striking down the said provisions in Ataur Rahman's case. We further make it clear that Sub-sections (2) to (4) of Section 4 do not get revived by reason of the subsequent pronouncement of Supreme Court in Sant Lai Bharti's case (supra), as discussed above.
and submitted that though the Legislature has intended to control the rent and fix the fair rent without correlating it to open market rent, it would not have been the intention of the Legislature to make the fair rent a pittance, stripping it of all the vestiges of fairness and reasonableness. The preamble of the Act refers to control of rent. 'Control' does not mean making the rent illusory or keeping it at a grossly low level thereby facilitating an unfair advantage to the landlord for invoking the jurisdiction of the civil Court and exposing him to litigation instead of invoking the summary procedure under the Rent Control Act. A legislation, which was valid and reasonable at the inception might become invalid, arbitrary or discriminatory by efflux of time. This is exactly the situation here. Therefore, with passage of time G.O. Ms. No. 636, dated 29-12-1983 has become arbitrary, illegal and illusory. As such, it can be set aside even in these proceedings by taking judicial notice of the fact of inflation as is declared by the various Courts as noted above. learned Counsel also contended that to prove the fact that G.O. Ms. No. 636, dated 29-12-1983 has become illusory, unreasonable and arbitrary over a period of time, the appellant-tenant need not have any better evidence before the Court, since the Legislature itself considered and amended Section 32 of the Rent Control Act by Act No. 17 of 2005 in exercise of the powers under Section 26 of the Rent Control Act. learned Counsel further contended that the amendment made to Section 32 of the Rent Control Act is nothing but substitution, particularly when there is no saving clause in the Act; as such, it must be deemed that it is substituted in the original Act and it is effective from the date of legislation when it was made for the first time in 1960. Therefore, Act No. 17 of 2005 must be deemed to have come into effect from the date of the Act i.e., Rent Control Act, 1960; thus, the provisions of the Rent Control Act are applicable to the facts of the case, in view of the fact that the rent even otherwise was Rs. 2,000/- per month and the building was of more than ten years old. In this regard, the learned Counsel relied upon a reported judgment in Lakshmi Narayan Guin v. Niranjan Modak and drawn attention to Pargraph-8, which reads as under:
8. The next point is whether Sub-section (1) of Section 13 can be invoked where the suit was instituted before the Act came into force. In the instant case, the suit was instituted long before the Act was extended to Memari. Sub-section (1) of Section 13 directs the Court not to make any order or decree for possession subject, of course, to the statutory exceptions. The legislative command in effect deprives the Court of its unqualified jurisdiction to make such order or decree. It is true that when the suit was instituted the Court possessed such jurisdiction and could pass a decree for possession. But it was divested of that jurisdiction when the Act was brought into force. The language of the Sub-section makes that abundantly clear, and regard must be had to its object....But any doubt on the point must be considered to have been finally removed by this Court when in Mst. Rafiquennessa v. Lai Bahadur Chetri another Bench of five Judges, which included J.C. Shah, J., who was a member of the Bench in the earlier case, held on an interpretation of Clause (a) of Sub-section (1) of the Assam Non-Agricultural Urban Areas Tenancy Act, 1955, which prohibited the eviction of a tenant, that the statutory provision came into play for the protection of the tenant even at the appellate stage. The learned Judges relied on the principle that an appeal was a continuation of the suit and that the appeal would be governed by the newly enacted Clause (a) of Sub-section (1) of Section 5 even though the trial Court decree had been passed earlier.
He also relied upon a judgment reported in D.C. Bhatia and Ors. v. Union of India and Anr. , and drawn attention to Paragraphs 51, 52 and 57, which read as under:
51. The next point relates to interpretation of Section 3(c) of the Delhi Rent Control Act. It was urged that the Delhi Rent Control (Amendment) Act came into force on 1-12-1988. The effect of Section 3(c) which was introduced by the Amendment Act was to remove those premises whose monthly rent exceeded Rs. 3500/- from the ambit of the Delhi Rent Control Act. This amendment of the Rent Control Act would not apply to those tenancies which were created prior to 1-12-1988. It was argued that the Amendment Act has not been specifically made retrospective. Therefore, it could not affect the rights acquired by the tenants under the Rent Control Act before its amendment in 1988. Under the existing law, the tenants had acquired valuable property rights. The landlord could neither evict the tenant nor enhance the rent at will. A suit could not be brought against a tenant on the ground of expiry of the lease, whether a lease was for a fixed term, year to year or month to month, on the ground of expiration of period of lease. Filing of such suit was barred by virtue of Section 14 of the Rent Act. Some of the tenants who could afford to build did not build houses of their own because of the protection provided by the provisions of the Rent Act. Had these provisions not been there, these tenants or lessees might have built houses of their own or purchased properties elsewhere. These vested rights could not be disturbed unless the Amendment Act contained specific provisions to that effect.
52. We are unable to uphold this contention for a number of reasons. Prior to the enactment of the Rent Control Act by the various State Legislatures, the legal relationship between the landlord and tenant was governed by the provisions of the Transfer of Property Act. Delhi Rent Control Act provided protection to the tenants from drastic enhancement of rent by the landlord as well as eviction, except on certain specific grounds. The Legislature by the Amendment Act No. 57 of 1988 has partially repealed the Delhi Rent Control Act. This is a case of express repeal. By Amending Act the Legislature has withdrawn the protection hitherto enjoyed by the tenants, who were paying Rs. 3,500/- or above as monthly rent. If the tenants were sought to be evicted prior to the amendment of the Act, they could have taken advantage of the provisions of the Act to resist such eviction by the landlord. But this was nothing more than a right to take advantage of the enactment. The tenant enjoyed statutory protection as long as the statute remained in force and was applicable to him. If the statute ceases to be operative, the tenant cannot claim to continue to have the old statutory protection....
57. In view of the aforesaid, we are unable to uphold the contention that the tenants had acquired a vested right in the properties occupied by them under the statute. We are of the view that the provisions of Section 3(c) will also apply to the premises, which had already been let out at the monthly rent in excess of Rs. 3,500/- when the amendment made in 1988 came into force.
6. Whereas, the learned Special Government Pleader appearing for the learned Advocate General contended that when a question is raised as to the ousting of jurisdiction of the civil Court, there should be a specific plea and issue in that regard. But, in this case, there is no such issue framed by the trial Court and only the point was framed by the appellate Court and at that stage, the Government was sought to be impleaded. Absolutely, there is no evidence and there are no additional pleas to the plaint. No G.O. gets nugatory by passage of time. The G.O. under challenge was issued on 29-12-1983 and the Act 17 of 2005 amended the said G.O. and a notification in that regard was published in the Gazette on 28-4-2005; thus, the G.O. Ms. No. 636, dated 29-12-1983 was in vogue for a period of 22 years. That itself does not mean that there was a time lag and it became illusory and unreasonable. May be, during these two decades, there is escalation of rents, lot of economic development in and around Hyderabad City, but that itself does not get the G.O. nugatory or unreasonable or unconstitutional. Some time is definitely required for the Legislature to take note of the situation and to make a study and propose the amendment. In this case, the same thing happened. Therefore, the CO., which is no more in existence as of now cannot be sought to be nullified in this appeal.
7. Sri Vallapareddy Rajagopal Reddy, learned Counsel for the respondent-landlord, contended that neither the G.O. is illusory nor unreasonable. There is no point in arguing that the said G.O. shall be declared as null and void, when it is no more in force as of now. In this regard, he has invited the attention of the Court to the reported decision in C.N. Rudramurthy v. K. Barkathulla Khan and drawn attention to Paragraph-9, which reads as under:
9....it was submitted that with the passage of time and change of circumstances, the continued operation of an Act, which was valid, when enacted may become invalid as being arbitrary and unreasonable. Though the Karnataka Rent Control Act was enacted in the year 1961 and was to lapse by the end of 10 years' time, it has been extended from time to time in the same form in which it was enacted originally or with some modification wherever it was necessary. We cannot imagine that the Legislature was not aware or conscious of the fact as to the rents prevalent in the city of Bangalore or in other parts of the State in respect of non-residential premises. Perhaps the Legislature thought it was necessary to give protection to only very poor tenants who pay rent less than Rs. 500/- per month considering the fact that tenants in other premises are economically of superior class and can withstand the maneouvres of a landlord, however, powerful he may be. If that was the policy of the law, we do not think as stated in D.C. Bhatia case it was open to the Court to have declared the same to be invalid.
The learned Counsel has also drawn attention of the Court to the decision reported in Vallabhaneni Lakshmana Swamy v. Valluru Basavaiah , wherein it was held as under:
62. From the aforesaid case-law and the statements made by various Law Lords, the following principles (illustrative not exhaustive) would emerge:
1. Every legislation is a prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect on the principle of "Nova constitution futuris formam imponere debet now paranteritus" means - A new law ought to regulate which is to follow, not the past.
2. All laws which effect substantive rights generally operate prospectively and there is a presumption against their retrospectivity if they affect the vested right and obligation unless the legislative intends its clear and unambiguous.
3. While considering the question of retrospective operation of the statute, the right affected must be first considered, whether there is a vested right. The amendment must be considered as a prospective so as to not to cause vested right and if the right is merely procedural, normally it is not treated as a vested right.
4. The intention of the Legislature is always be to gather the words always used by it in plain, grammatical meaning.
5. Retrospective operation of a statute is not to be given so as to impair the existing right or obligation, otherwise than as regards a matter of procedure, unless that effect cannot be effected without doing violence to the knowledge of the enactment. A statute, which impairs vested right or legality of the past transactions or the obligation of a contract should not be held to be retrospective.
6. Even in respect of the amendments, substantive rights cannot be taken away by subsequent amendment, unless specifically enacted by the legislation.
7. The law which only affects the procedural rights is presumed to be retrospective, unless such a construction is textually inadmissible.
8. A statute, which not only changes the procedure, but also creates new rights and obligations, shall be construed to be prospective unless otherwise provided either expressly or by necessary implication.
9. Whether the amendment is brought during the pendency of the suits or actions, whether such amendment has retrospective effect or prospective effect has to be considered with reference to object of the amendment, unless it is expressly provided in the statute. But, however, if the rights and procedures are dealt with together, if the procedural alterations are inextricably linked with the changes simultaneously, it is not permissible to give retrospective effect of operation. Unless, Legislature has enacted such an intention, there is always general presumption that the statute is deemed to be prospective unless otherwise expressly provided.
10. The question whether statute or any provisions in it has retrospective operation has to be determined with reference to the intention of the legislation and it is to be gathered from the language with reference to the object and nature of the rights affected the circumstances under which the statute came to be. The statute which is not declaratory of pre-existing law nor the matter relating to procedure, but affects vested rights cannot be given a greater prospective, retrospective effect than it renders necessary. The test when decided a particular provision of law has to be given retrospective effect or not is not merely considered whether a law of procedure or substantive law, but also any alleged questions existing rights including the rights of action which are substantive rights. If a law destroys an existing right or places language a restriction on it, no retrospective effect would be given unless statute is expressly enacted to that effect.
11. No person can have a vested right in the course of procedure and the plaintiff or defendant has a right of prosecution or defence in the manner prescribed for the time being and if the procedure is altered during the pendency of action, the altered procedure ought to be adopted. Legislature can always provide that pending proceedings shall be effected by an Amendment Act, though in the absence of such any express provision amending Act cannot be held to be governed by the pending proceedings.
12. A new law bringing about a change in forum does not affect pending actions unless there is clear expression to the said effect.
13. Right of appeal is substantive right and it cannot be impaired as taken away by a statute retrospectively unless by specific provision in enactment or by necessary intendment. This right vests with the suitor at the time of institution of original proceedings. Any change in the law relating to appeals after institution of original proceedings which adversely touches this right is presumed not to be retrospective.
14. A change of forum except in pending proceedings is a matter of procedure and therefore, if a new Act requires certain type of original proceedings to be instituted before a Special Tribunal constituted under the Act to the exclusion of Civil Court, all proceedings of that type whether based on old or new causes of action will have to be instituted before the Tribunal
15. The statutes providing for new remedies for enforcement of a existing right are treated as procedural and applied to future as well as the past causes of action.
16. The classification of statute as either substantive or procedural does not necessarily determine whether it may have a retrospective operation. But, a statute of limitation is generally regarded as procedural. However, if its application to a past cause of action has effect of reviving or extinguishing a right of suit such an operation cannot be said to be procedural. Consequently such procedural law is prospective in operation.
17. In the words of DIXON C.J. "The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to the past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption"
18. In the words of S.R. Das, the cardinal rule of construction, however, in the absence of anything in the enactment to show that it has a retrospective operation, it cannot be so construed as to have altering the law applicable to a claim in litigation at the time when the Act was passed. Therefore, if Legislature intends to apply a statute to the pending proceedings, it must indicate an express provision to that effect.
19. In matters of substitution by an amendment, it has to be construed that there is not real distinction between the repeal and an amendment. Whether a provision of an Act is omitted by an Act and the said Act simultaneously re-indicates new provision which substantively covers with certain modifications. In that event, such re-enactment is recorded as having force continuously and modification are treated as changes with effect from the date of the enforcement of the re-enacted provision.
20. It makes no difference in application to these principles that the amendment is by substitution or otherwise. However, the statutes dealing with the procedures in contrast with the substantive rights are presumed to be retrospective, unless such a conclusion is textually inadmissible. If the new Act affects the matters of procedure, then only prima facie it applies to all actions pending as well as future.
21. While the law relating to forum and limitation is procedural in nature while the law relating to right of action and right of appeal even though remedial is substantive in nature, that a procedural statute should not generally be speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. A statute which not only changes the procedure but also creates new rights and obligations shall be construed to be prospective, unless otherwise provided either expressly or by necessary implication.
22. A statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty or attaches a new disability in respect of transactions already past must be presumed to be intended not to have a retrospective effect and as a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, and there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary.
23. Where the rights and procedure are dealt with together, the intention of Legislature may well be that old rights are to be determined by the old procedure and the new rights under substituted section by the new procedure. If the procedural alteration is closely and inextricably linked with the changes simultaneously introduced, it is not possible to give retrospective effect to the procedure unless the Legislature has indicated such an intention either by express words or by necessary implication.
74. The judgment of the Full Bench in Motichand Jain's case (supra) declaring that the Amendment Act 30 of 1989 falling under adjectival law has retrospective effect stands overruled subject to the aforesaid conclusion.
He further submitted that so far as rent of Rs. 2,000/- per month as on the date of filing of the suit cannot be said to be illusory making the tenant to suffer in the hands of a landlord by depriving him of his right to approach the Rent Controller.
8. I have given my earnest consideration to the respective submissions made by all the learned Counsel and gone through the entire evidence on record including the impugned judgments.
9. At the outset, I am of the opinion that the issue is purely academic in nature as of now, since G.O. Ms. No. 636, dated 29-12-1983 has already been amended by Act No. 17 of 2005. May be, it is true that in the -past two decades, there is metamorphosis in the urbanization of Hyderabad City and even the value of the rupee might have fallen down by many times. It is necessary to remember that the question for consideration in this Second Appeal is not raised by the landlord, but it is raised by the tenant. When the G.O. was issued in the year 1983, the Rent Control Act was not made applicable under it for the buildings those who were less than, 10 years old and which were getting the rent more than Rs. 1,000/- per month. Admittedly, the rent for the suit schedule property is Rs. 2,000/- per month and the suit was filed in the year 1997 i.e., within a period of 15 years from the date of G.O. Ms. No. 636. The G.O. contemplated applicability of the Rent Control Act for the premises, which were getting a rent upto Rs. 1,000/- and the rent of the suit flat was Rs. 2,000/- per month. Therefore, neither it can be said that in the year 1997, the G.O. has become unreasonable or illusory in view of passage of time. Now, the G.O. itself has been amended making a provision as to non-applicability of the Act to the buildings, which are below 15 years of age and where the rent is more than Rs. 3,500/-per month. The just passage of 15 years cannot be said to be a passage of time, which made G.O. Ms. No. 636, dated 29-12-1983 unreasonable, illusory and nugatory. Even in the judgment relied upon by the learned Counsel for the appellant in Malpe Vishwanath Acharya's case (supra), it was held "taking all the facts and circumstances into consideration, we have no doubt that the existing provisions of the Bombay Rent Act, 1947 relating to the determination and fixation of the standard rent can no longer be considered to be reasonable. The said provisions would not have been struck down as having now become unreasonable and arbitrary, but we think it is not necessary to strike down the same in view of the fact that the present extended period of Bombay Rent Act comes to an end on 31-3-1998.... We, accordingly, dispose of these appeals without granting any immediate relief, but we hold that the decision of the High Court upholding the validity of the impugned provisions relating to standard rent was not correct. We, however, refrain from striking out the said provisions as the existing Act elapses on 31-3-1998 and we hope that a new Rent Control Act will be enacted with effect from 1-4-1998 keeping in view the observations made in this judgment insofar as fixation of standard rent is concerned". That was the Act of 1947 and the matter was being examined by the Supreme Court in December, 1997. Bombay Rent Control Act was almost a pre-independence Act. Whereas, in the case on hand, G.O. Ms. No. 636, dated 29-12-1983 was issued in exercise of the power vested under Section 26 of the Rent Control Act in the year 1983 and when the suit was filed in the year 1987, it cannot be said that the provisions of the G.O. have become unreasonable and illusory by passage of time. Even otherwise, the fast economic development and urbanization of Hyderabad City was taken note of by the Legislature and it has amended G.O. Ms. No. 636, dated 29-12-1983 by Act No. 17 of 2005. Therefore, declaring G.O. Ms. No. 636, dated 29-12-1983 as illusory and unreasonable as of now does not arise. The judgments relied upon by the learned Counsel for the appellant have no direct bearing on the question that arises for consideration in this Second Appeal.
10. The next question that falls for consideration is whether the amendment to Section 32 of the Rent Control Act by Act No. 17 of 2005 amounts to substitution and whether it is applicable to all pending cases also. There cannot be any dispute as to the fact that the appeal is a continuation of the suit. But, that does not mean that law, which is amended in the year 2005 shall be made applicable to the facts of the present case and the same is nothing but amounting to applying the law with retrospective effect and reversing the findings of fact in the Second Appeal. learned Counsel for the appellant contended that may be, it is not applicable to those cases, which have attained finality, but it must be made applicable to all the pending cases and this being one of the pending cases, the new law must be made applicable and as such, it must be deemed that the Civil Court is inherently lacking jurisdiction and only the Rent Controller has jurisdiction to deal with the matter. I am afraid, I cannot agree with the said submission. In this case, admittedly, both the Courts below in unequivocal terms have found that the appellant committed default in payment of rent; therefore, he is liable to be evicted. Even to hold that the change in the law during the pendency of the appeal has to be taken into account and will govern the rights of the parties, it has to be seen that if the new law speaks a language, which expressly or by clear intendment, takes-in,91 even pending matters, the Court of trial as well as the Court of appeal must have regard to the intention so expressed and the Court of appeal may give effect to such law even after the judgment of the Court of first instance. In this case, it may be apt to note the amended provision of law i.e. Section 32(c) of the Rent Control Act as amended by Amendment Act 17 of 2005, which read as under:
32. Act not apply to certain buildings:--The provisions of this Act shall not apply,--
(a)&(b)....
(c) to any building the rent of which as on the date of commencement of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control (Amendment) Act, 2005, exceeds rupees three thousand and five hundred per month in the areas covered by the Municipal Corporation in the State and rupees two thousand per month in other areas.
11. The above provision speaks in clear terms that the amendment is not applicable to any building, the rent of which as on the date of commencement of Amendment Act 17 of 2005 exceeds Rs. 3,500/- per month in the areas covered by the Municipal Corporations in the State and Rs. 2,000/- per month in other areas. Prior to the enactment of the Rent Control Acts by various State Legislatures, the legal relationship between the landlord and tenant was governed by the provisions of the Transfer of Property Act. A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 provided protection to the tenants from drastic enhancement of rent by the landlord as well as eviction, except on certain specific grounds. By Amendment Act 17 of 2005, the Legislature enhanced the protection to the tenants, who were paying Rs. 3,500/- or below as monthly rent. If the tenants were sought to be evicted prior to the Amendment Act, the landlords could not have taken advantage of the provisions of the Rent Control Act, if the rent is more than Rs. 1,000/- per month. The tenant would enjoy the statutory protection so long as the statute remained in force and was applicable to him. If the statute is substituted by a fresh provision making the Act applicable to the premises, which is more than 15 years old and getting less than Rs. 3,500/- per month rent which came into force on 28-4-2005, the protection can be claimed by the tenant. Rather, the provisions will also apply to the premises, which had already been let out at the monthly rent upto Rs. 3,500/- when the amendment came into force on 28-4-2005. In fact, in Vallabhaneni Lakshmana Swamy's case (supra), every conceivable situation has been taken into consideration by a Larger Bench of this Court and at Paragraph-62 of the said judgment, as many as 23 such principles were laid down. Retrospective operation of a statute is not to be given so as to impair the existing right or obligation, otherwise than as regards a matter of procedure, unless that effect cannot be effected without doing violence to the language of the enactment. A statute, which impairs vested right or legality of the past transactions or the obligation of a contract should not be held to be retrospective in operation. A statute, which not only changes the procedure, but also creates new rights and obligations, shall be construed to be prospective unless otherwise provided either expressly or by necessary implication and when an amendment is brought during the pendency of the suits or actions, whether such amendment has retrospective effect or prospective effect has to be considered with reference to object of the amendment and not otherwise. The amendments brought during the pendency of the suit or actions, shall not affect the vested right of the parties, which accrued to them before the amendment of the provision. Legislature can always provide that pending proceedings shall be effected by an Amendment Act. In the absence of any such express provision, the amending Act cannot be held to govern the pending proceedings. The general rule of common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to the facts or events that have already occurred in such a way as to confer or impose or otherwise affects the rights or liabilities, which the law had defined by reference to the past events. The presumption against retrospective operation is strong in cases in which the statute, if operated retrospectively, would prejudicially affect vested rights or the illegality of the past transactions, or impair contracts, or impose new duty or attach new disability in respect of past transactions or consideration already passed. A statute cannot be called to have retrospective effect because a part of the requisites for its action is drawn from a time antecedent to its passing. The general scope and purview of the amended Act does not take away or impairs rights vested agreeably to existing laws in retrospective. Even in a case where the law made justly and for the benefit of individuals and the community as a whole, as in this case, may relate to a time antecedent to their commencement, but the presumption against retrospectivity may, in such cases, be rebutted by necessary implications from the language employed in the statute. It cannot be said to be an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section, which had to be construed. The question is whether on a proper construction, the Legislature may be said to have so expressed its intention. In the instant case, there is no clear intendment of the legislative language as to its applicability either expressly or impliedly to the pending matters. In other words, the amended provision of law is applicable from the date of commencement of the Amendment Act i.e., 28-4-2005. Therefore, I am of the opinion that the amended law through Amendment Act No. 17 of 2005 has no retrospective effect. When a beneficial legislation is amended to take more number of people into its fold in view of the peculiar circumstances, that does not mean that the same is applicable with retrospective effect i.e. the date from which the original Act itself was enacted and also for the cases which are pending in the Courts, particularly in the absence of any clear intendment of the Legislature as to its applicability with retrospective effect. Therefore, the lower appellate Court was justified in refusing to consider the validity of G.O. Ms. No. 636, dated 29-12-1983 on the premise that such an issue has already been decided by a Full Bench of this Court.
12. In cases of this nature, the terms of contract entered into as on the date of commencement of the contract, both on law and facts, have to be taken into consideration for the purpose of deciding the Us between the parties and not the amended provisions particularly when the amended provision is neither expressly nor impliedly retrospective in its nature, as discussed above. Otherwise, it results in disastrous consequences of reopening and reconsidering of the cases, which went ordeal enquiry, pending decades together and dismissing the cases on the ground of inherent lack of jurisdiction of the civil Court. Such is not the intention of the Legislature.
13. For all the above reasons, the Second Appeal fails and is liable to be dismissed. Accordingly, the Second Appeal is dismissed; but without any order as to costs.
14. After pronouncement of the judgment, learned Counsel for the appellant requested for granting some time to the appellant to deliver vacant possession of the suit schedule property.
15. Time of three months from today is granted to the appellant, subject to his filing a written undertaking that he would deliver vacant possession of the property within the above stipulated time and would not create any third party interest in the property.