Rajasthan High Court - Jaipur
Rakesh Kumar Goyal And Anr vs M/S Supreme Motors And Ors on 19 April, 2011
Author: Mn Bhandari
Bench: Mn Bhandari
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR ORDER SB Civil Writ Petition No. 7716/2010 Ramesh Kumar Goyal & anr Vs M/s Supreme Motors, 25, Transport Nagar, Jaipur & ors 19.4.2011 HON'BLE MR. JUSTICE MN BHANDARI Mr Sudesh Bansal - for the petitioners Mr GP Sharma - for respondents BY THE COURT:
By this writ petition, a challenge has been made to the order dated 21.4.2010, whereby, review petition preferred by the respondents No.1 to 3 was allowed.
Brief facts concerned to the case are regarding revision of rent in view of provisions of section 6 of the Rajasthan Rent Control Act, 2001 (for short 'the Act of 2001'). The Rent Tribunal revised the rent by enhancing it at the rate of 7.5% annually. The appeal so preferred against the order was dismissed by the Appellate Rent Tribunal, Jaipur. Respondents, thereupon, preferred a review petition on the ground that by amending section 6 of the Rajasthan Rent Control Act, 2001, increase of rent by 7.5% annually has been substituted by 5% annually and the said amendment came into effect while the appeal was pending ignored by the Appellate Rent Tribunal while disposing of the appeal. The review petition was accordingly considered and allowed taking amendment to be retrospective.
Learned counsel for petitioners submits that the amendment cannot be considered retrospective in nature unless so construed and intended by the legislators and is specifically provided in the amendment. Mere use of word substituted in the amendment does not mean that it has been given retrospective effect, hence, the order passed in the review petition deserves to be set aside more so when the aforesaid issue has already been settled by this court in the case of Daljeet Singh & six others vs Appellate Rent Tribunal, Sri Ganganagar & ors reported in 2009 (1) DNJ (Raj) 2671 and in the case of Ravi Kumar Garg Vs The Appellate Rent Tribunal & ors (SB Civil Writ Petition No.4504/2005, decided on 7.8.2009 at Jaipur Bench).
Learned counsel for respondents, on the other hand, submits that the amendment is retrospective in nature and the aforesaid issue has been decided by this court in the case of Sita Devi & anr Vs Bishamber Dayal reported in 2008(3) WLC (Raj) 662. Learned counsel further placed reliance on the judgments in the case of Board of Control for Cricket, India and anr Vs Netaji Cricket Club and ors reported in AIR 2005 SC 592 and Jagdish Prasad vs Kapoor Chand & ors reported in 1978(1) RCR 61.
I have considered the submissions of learned counsel for the parties and scanned the matter carefully.
Since the issue is in regard to section 6 of the Act of 2001 thus it would be gainful to quote the original provision as well as the amended provision for ready reference -
6. Revision of rent in respect of existing tenancies.
(1) Notwithstanding anything contained in any agreement, where the premises have been let out before the commencement of this Act, the rent thereof shall be liable to be revised according to the formula indicated below:-
(a) where the premises have been let out prior to lst January, 1950, it shall be deemed to have been let out on lst January, 1950 and the rent payable at that time shall be liable to be increased. at the rate of 7.5 % per annum and the amount of increase of rent shall be merged in such rent after ten years. The amount of rent so arrived at shall again be liable to be increased at the rate of 7.5 % per annum in similar manner upto the year of commencement of this Act.
(b) where the premises have been let out on or after lst January, 1950, the rent payable at the time of commencement of the tenancy shall be liable to be increased at the rate of 7.5 % per annum and the amount of increase of rent shall be merged in such rent after ten years. The amount of rent so arrived at shall again be liable to be increased at the rate of 7.5 % per annum in similar manner upto the year of commencement of this Act.
Illustration :- If the rent was Rs. 100 per month on 1st January, 1950, it shall become Rs. 175/- per month on lst January, 1960. It shall become Rs. 306.30 per month on 1st January, 1970 and Rs. 536.30 per month on 1st January, 1980.
(2) Notwithstanding anything contained in sub-section (1), where the period of ten years for merger of increase of rent under sub-section (1) is not- completed upto the year of the commencement of this Act, the rent at the rate of 7.5 % per annum shall be increased upto the year of the commencement of this Act and the amount of increase of rent shall be merged in rent.
(3) The rent arrived at according to the formula given in sub-sections (1) and (2) shall, after completion of each year from the year of commencement of this Act, again be liable to be increased and paid at the rate of 5 % per annum and the amount of increase of rent shall be merged in such rent after ten years. Such rent shall further be liable to be increased at similar rate and merged in similar manner till the tenancy subsists.
(4) The rent revised as per formula given under sub-section (1) or sub-section (2) shall be payable, after the commencement of this Act, from the date agreed upon between the landlord and the tenant or where any petition is filed in a Rent Tribunal, from the date of filing of such petition.
The aforesaid provision was amended by the Rajasthan Amendment Act of 2005. Under section 6 of the amended Act of 2005 clauses (a) and (b) of sub-section 1 and sub-section (2) of section 6 were amended and are thus quoted hereunder.
3. Amendment of section 6 of the Rajasthan Act No.1 of 2003 In section 6 of the principal Act, -
(i) in clause (a) of sub-section (1), for the existing expression 7.5%, wherever occurring, the expression 5% shall be substituted;
(ii) in clause (b) of sub-section (1), for the existing expression 7.5% wherever occurring, the expression 5% shall be substituted;
(iii) the existing illustration appearing after clause (b) of sub-section (1) shall be deleted;
(iv) in sub-section (2), for the existing expression 7.5%, the expression 5% shall be substituted.
Perusal of the original section 6 shows that increase in the rent was provided at the rate of 7.5% annually, however, by amendment Act of 2005 the expression 7.5% has been substituted to 5%.
The main issue for my consideration is as to whether amendment is having retrospective as word substituted has been used in the amendment.
For consideration of the issue, it would be appropriate to refer judgments of the Hon'ble Apex Court as well as the judgment already rendered by this court in the case of Sita Devi (supra). In the case of Sita Devi (supra) the amendment has been considered to be retrospective. In the case of Daljeet Singh and Ravi Kumar Garg (supra) it has been applied prospectively. Under the aforesaid circumstances, there exist conflicting judgments. The matter could have been referred to the Larger Bench for consideration, however, after considering the fact that the judgments of the Hon'ble Supreme Court are having complete answer to the issue, it has been dealt with in this judgment itself.
The Hon'ble Supreme Court considered the same controversy in the case of Maharaja Chintamani Saran Nath Shahdeo Vs State of Bihar and ors reported in AIR 1999 SC 3609. Therein, Bihar Land Reforms Act (30 of 1950), section 25(4) was substituted by Bihar Act 15 of 1974. By virtue of the amendment, compensation was restricted to three times to the net income. Considering the substitution of the original provision by way of an amendment, it was taken to be prospective in absence of any indication to this effect. Paras 18, 19, 25, 26, 28 of the aforesaid judgment are quoted thus -
18. We shall next refer the provisions of Sub-section (2) of Section 1 and Section 6 of the Amending Act, 1974.
1 ...
(2) - It shall come into force at once.
6 - Amendment of Section 25 of the Bihar Act No. 30 of 1950 : In place of the Sub-section (4) of Section 25 of the above Act following sub-section shall be substituted:
(4) After the net income from royalties has been computed under Sub-sections (2) and (3), the Compensation Officer shall proceed to determine the amount of compensation to be payable to the intermediary in accordance with the rates prescribed under Sub-section (1) of Section 24.
19. Before amendment under Section 25 computation of compensation payable for mines and minerals could be fixed by agreement under Section 25(4)(a) failing which it was to be referred under Section 25(4)(b) to the Tribunal and the Tribunal could award compensation at the rate not less than three and not more than twenty times of net income from royalties as may appear to the Tribunal to be fair and equitable. In view of the amendment of Sub-section (4) to Section 25 of the Act, Compensation Officer had to determine the amount of such compensation in accordance with the rates prescribed under Section 24(1)(1). The maximum limit for such compensation as provided under Section 24(1)(1) was three times of net income.
Whether the maximum limit of rate of compensation would be twenty times under Section 25(4)(b) by the Tribunal or three times of net income from royalties under Section 6 of the Amending Act of 1974 would depend on interpretation, whether the amending Act of 1974 has got retrospective effect.
25. We are unable to accept the contention of the respondent-State that Section 6 of the Amending Act of 1974 is retrospective. In Sub-section (2) of Section 1 the legislature clearly stated that Act would come into force at once i.e., from the date of publication in the Gazette. Neither in Section 6 or any other section of the amending Act it was mentioned that the Act would have retrospective effect. If we hold that the Act would have retrospective effect it would go against the intention of the legislation.
26. Applying the Golden Rule of construction as stated by this Court in Garikapatti Veeraya (Supra) in the amending Act there was nothing to show that the Act would have retrospective effect. As "the essential idea of a legal system is that current law should govern current activities". We hold that rate of compensation shall have to be determined in accordance with the provisions of the Act which was in force at the time compensation was payable i.e., un-amended Sub-section (4) of Section 25 of the Act would apply. Moreover, the amending Act affects the substantive right of the appellant, therefore, it would have prospective operation. There is also no express or implied provisions in the amending Act to indicate that the Act will have retrospective effect. We, therefore, hold that the amending Act would apply prospectively.
28. The contention of the learned Counsel, Mr. Agrawal in respect of legislation by substitution has no force inasmuch as same rule of construction has to be applied while dealing with such a legislation. We may also refer to the decision of this Court in Union of India v. C. Rama Swamy and Ors. . In this case a new rule namely Rule 16-A was inserted in All India Services (Death-cum-Retirement Benefits) Rules, 1958. In respect of this substituted rule this Court held that the effect of rule being substituted by new rule clearly was the old rule, which stood substituted, could under no circumstances have any application at least from the date when it ceased to exist.
Perusal of the paras of the judgment quoted aforesaid shows that mere use of word substituted in the amendment cannot be taken to be retrospective in absence of any intention to this effect. The amendment Act was given prospective effect as it was affecting the substantive right of the appellant therein.
The case in hand is similar to the aforesaid inasmuch as amendment affects the substantive right exist and determined in favour of the landlord. An application under section 6 can be filed only by the landlord and if rate of increase is substituted by 5% per annum and given retrospective effect, then it affects substantive right of the landlord.
It is informed that in large number of cases, orders have attained finality before the amendment, thus taking amendment to be retrospective will lead to unsettle the matters already settled. The aforesaid judgment gives complete answer to the issue raised herein.
In the case of Ramkanali Colliery of BCCL vs Workmen by Secy., Rashtriya Colliery Mazdoor Sangh & anr reported in (2001) 4 SCC 236, issue came up for consideration before the Hon'ble Apex Court regarding amendment in section 14 of the Coal Mines (Nationalisation) Act, 1973. Therein, a dispute was raised by the employees, who were not continued in employment despite the clear indication to this effect under section 14 of the Act of 1973. The management therein refused to re-employ workmen due to amendment in section 14 by way of substitution. The expression substituted has been explained by the Hon'ble Supreme Court to mean that when there is repeal of the provision with introduction of another provision in place thereof by a single exercise, expression substituted is used. It was held that there is no distinction between repeal and amendment or substitution in such cases. If the vested right is taken away by amendment then it is to be treated as retrospective. In the case referred aforesaid, original section 14 was providing continuation of the employees on nationalisation of coal mines in the year 1973. Therein, the employees raised plea that they were the employees of the Coal Mines as on 1.5.1973 though not allowed to work. The management therein came up with the plea that before passing of the award by the Industrial Tribunal, section 14 was substituted by way of amendment of 1986 thus the Industrial Tribunal should not have passed the award contrary to the amended provision of 1986, more so, when the award was passed in the year 1987. It was contended that by virtue of amendment in the year 1986, original section 14 was substituted by the new provision and thereby the original provision of section 14 stood deleted from the original date. The Hon'ble Supreme Court did not accept the aforesaid contention, rather, it was held that the Industrial Tribunal has rightly given effect to the original provision of section 14 of the Act of 1973. Paras 8 and 9 of the aforesaid judgment is quoted thus -
8. The argument advanced now is that protection available under Section 14 is no longer available on the date when the award was made and, therefore, contended that the award is a nullity. The decision in Bhubaneshwar Singh & Anr. vs. Union of India & Ors., 1994 (6) SCC 77, is in the context of enactment of law reviewing the defect pointed out in a judgment and retrospectively enacting the law so as to render the judgment of the court ineffective thus enacting a validating provision was considered. What happened in that case was courts took the view that the sale price of the stock of extracted coal lying at the commencement of the appointed date had to be taken into account for determining the profit and loss during the period of management of the mine by Central Government. Thereafter, the Coal Mines Nationalisation Laws (Amendment) Ordinance and Act, 1986 was issued. Section 19(2) of the Principal Act as introduced by the Amending Act and Section 19 of the Amending Act providing that the amount payable as compensation shall be deemed to include and deemed always to have included in the amount required to be paid to the owner in respect of all coal in stock on the date immediately before the appointed date. The said Amending Act was held to be valid as it altered the basis of the principal Act with retrospective effect as a result of which court' judgment was rendered ineffective and, therefore, this Court upheld the said provision. That decision can have no application to the present case nor are we concerned with the validity of the provisions of the enactment in question. What we are concerned in the present case is the effect of the expression substituted used in the context of deletion of sub-clauses of Section 14, as was original enacted. In Bhagat Ram Sharma vs. Union of India & Ors., 1988 Supp. SCC 30, this Court stated that it is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and a new provision substituted. If there is both repeal and introduction of another provision in place thereof by a single exercise, the expression substituted is used. Such deletion has the effect of the repeal of the existing provision and also provide for introduction of new provision. In our view there is thus no real distinction between repeal and amendment or substitution in such cases. If that aspect is borne in mind, we have to apply the usual principles of finding out the rights of the parties flowing from an amendment of a provision. If there is a vested right and that right is to be taken away, necessarily the law will have to be retrospective in effect and if such a law retrospectively takes away such a right, it can no longer be contended that the right should be enforced. However, that legal position, in the present case, does not affect the rights of the parties as such.
9. The Act came into force on 1.5.1973 and the employees (including former employees whose services were terminated) will continue to hold such employment as if nationalisation had not taken place. In the present case, the finding of the Tribunal is that the employees in question had not ceased to be employees but were merely not allowed to do work. This finding of fact arrived at on appreciation of evidence, cannot be faulted with at all. Hence, the right enforced by the employees will not attract the amended provision of the Act which came into force on 15.12.1986.
Perusal of para 9 of the judgment quoted above shows that right enforced by the employees were not affected by the amended provision of the year 1986. This is more so when the award was passed after an amendment thus substitution of the provision by way of amendment was not taken as retrospective. The judgment referred to above also covers the controversy raised herein. The legal position is clearly coming out from the judgment referred to aforesaid. Whenever the word substituted is used in the amendment, it means that the original provision has been repealed by inserting new provision in that place and if it does not take away vested rights by clear indication, provision has to be applied prospectively.
In the case of Garikapati Veeraya Vs N Subbiah Choudhary and ors reported in AIR 1957 SC 540, five Judges Bench of the Hon'ble Supreme Court considered the general effect of the amendment. It came to the conclusion that statues should be interpreted to respect the vested right. The golden rule of construction is that in absence of anything in the enactment to have retrospective operation, it cannot be so construed to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. Para 25 of the said judgment is quoted hereunder for ready reference -
25. In construing the articles of the Constitution we must bear in mind certain cardinal rules of construction. It has been said in Hough v. Windus, 1884-12 Q.B.D. 224 at 237(V)that "statutes should be interpreted, if possible, so as to respect vested right". The golden rule of construction is that, in the absence of anything in the enactment to ,show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. Leeds and County Bank Ltd. V. Walker, (1883) 11 QBD 84 at p.91 (W); Moon v. Durden, (1848) 2 Ex 22: 76 RR 479 at p.495 (X). The following observation of Rankin C.J. in Sadar Ali v. Dalimuddin,(K) (supra) at p. 520 (of ILR Cal): (at p.643 of AIR) is also apposite and helpful: "Unless the contrary can be shown the provision which takes away the jurisdiction is itself subject to the implied saving of the litigant's right." In Janardan Reddy v. The State, 1950 SCR 940 at pp.946, 947): (AIR 1951 SC 124 at pp.126-127) (Y) Kania C.J. in delivering the judgment of the Court observed that our Constitution is generally speaking prospective in its operation and is not to have retroactive operation in the absence of any express provision to that effect. The same principle was reiterated in Keshavan Madhava Menon v. The State of Bombay 1951 SCR 228: (AIR 1951 SC 128) (Z)_ and finally in Dajisaheb Mane v. Shankar Rao Vithal Rao, 1955-2 sCR 872 at pp. 876-877: (S) AIR 1956 SC 29 at p.31 (Z1) to which reference will be made in greater detail hereafter.
Perusal of the aforesaid para shows the golden rule of construction of amendment.
If the case in hand is taken note of, the landlord making an application for increase of rent is to be determined on the rates applicable at the time for which increase of rent has been claimed. The amendment in the provisions by way of substitution of expression 7.5% to 5% should not be construed to mean that expression 7.5% never existed. In fact, it will lead to absurdity. As stated above, many of the claims made by the landlord had attained finality in absence of appeal or review before the amendment and in those cases landlord is getting increase of rent at the rate of 7.5% annually, till the amendment. However, at the same time, where appeal was pending or review has been filed, increase of rent, if permitted at the rate of 5% annually even for the period prior to the amendment then one and same provision is having separate effect, which is nothing but results in absurdity and otherwise it takes away the vested right. The expression substituted is wrongly taken as if the original provision never existed. The Hon'ble Apex Court has explained the word substituted and held that the aforesaid word is used when there is repeal or amendment in the Act and, at the same time, new provision is inserted. Thus, when two events take place simultaneously in making amendment, the expression substituted is used and, otherwise, the golden rule of interpretation is to treat it to be prospective.
In the case of Balwant Singh vs Darshan Singh & ors reported in 2006(1) WLC (SC) Civil 567, an application was filed by the plaintiff for production of additional evidence in view of rule 17-A of the CPC as existed on the date of the application. The said rule was then amended/ omitted in the year 1999 giving effect from 1.7.2002. The Hon'ble Apex Court held that amendment cannot affect the order already passed as the application was to be governed by the provision then existed while the application was filed and decided by the trial court.
Same view has been taken by the Hon'ble Supreme Court in the case of The Sales Tax Officer, Ward II, Moradabad and ors vs Oriental Coal Corporation, Moradabad reported in AIR 1988 SC 648.
In the case of Mithilesh Kumari and another vs Prem Behari Khare reported in AIR 1989 SC 1247 the Hon'ble Supreme Court held in para 21 as under -
21. We read in Maxwell that it is a fundamental rule of English Law that no statute shall be construed to have retrospective operation Unless such a construction appears very clearly at the time of the Act, or arises by necessary and distinct implication. A retrospective operation is, therefore, not to be given to a statute so as to impair existing right or obligation, otherwise than as regards matter of procedure unless that effect cannot be avoided without doing violence to the language of the enactment. Before applying a statute retrospectively the Court has to be satisfied that the statute is in fact retrospective. 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. However, a statute is not properly called a retrospective statute because a part of the requisites for its action is drawn from a time antecedent to its passing. We must look at the general scope and purview of the statute and at the remedy sought to be applied, and consider what was the former State of Law and what the legislation contemplated. Every law that takes away or impairs rights vested agreeably to existing laws is retrospective, and is generally unjust and may be oppressive- But laws 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. 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. Craise on Statute Law, 7th Ed. writes that the general rule of law that statutes are not operated retrospectively may be departed from (a) by express enactment and (b) by necessary implication from the language employed, and the author goes on to say:
"If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give if such an operation. "Baron Parke," said Lord Hatherley in Pardo v. Bingham, did not consider it an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which has to be construed, and said that the question in each case was whether the legislature had sufficiently expressed that intention. In fact, we must look to the general scope and purview of the statute, and at the remedy sought to be applied, and consider what was the former state of the law, what it was that the legislature contemplated." But a statute is not to be read retrospectively except of necessity .... In Main v. Stark, Lord Selborne said: "Their lordships, of course do not say that there might not be something in the context of an Act of Parliament, or to be collected from its language, which might give towards prima facie prospective a larger operation, but they ought not to receive a larger operation unless you find some reason for giving it .... In all cases it is desirable to ascertain the intention of the legislature." He went on: "Words not requiring a retrospective operation, so as to affect an existing statute prejudicially, ought not to be so construed", but in Renold v. Att. Genl. For Novo Scotia it was held that this rule did not extend to protect from the effect of a repeal a privilege which did not amount to an accrued right." (pp. 392-393).
Perusal of the aforesaid para also shows that as to under what cases, amendment can be considered to be retrospective and otherwise to be prospective in application.
From the judgments referred above, it comes out that in which cases amendment can be taken as retrospective. First principle is that if it takes away vested rights by express provision in the amendment then it can be taken as retrospective, otherwise, in absence of any express provision, the amendment has to be taken as prospective. Mere use of the word substituted should not mean that amendment is retrospective in all circumstances. The word substituted has already been given meaning by the Hon'ble Supreme Court, wherein, it has been held that if the provision is repealed by the amendment with insertion of new provision, the word substituted is used. Accordingly, the word substituted has to be given interpretation.
In the case in hand, original provision of section 6 of the Act of 2001 was providing increase of rent at the rate of 7.5% annually and, accordingly, rights were claimed and determined in favour of the landlord. Several cases attained finality in absence of appeal or review and further litigation. However, in few cases, matter remained pending at the appellate stage or even review petition was filed. In such cases, if amended provision is taken to be retrospective, increase of rent would be determined at the rate of 5% annually thus there would be two sets of landlord; one getting increase of rent at the rate of 7.5% annually till amendment and others at the rate of 5% annually even for the period prior to amendment. Aforesaid situation leads to absurdity and, in such circumstances, the Hon'ble Supreme Court held that the provision has to be taken as prospective to avoid absurdity.
It would not be out of place to clarify here that from the date of amendment, the increase of rent would be permissible at the rate of 5% annually thus while giving interpretation to amended provision of section 6, the proper view is to allow increase of rent at the rate of 7.5% annually till the amendment in the Act of 2001 and, thereafter, at the rate of 5% annually from the date of amendment. This will avoid any absurdity or existence of two sets of landlords under same set of circumstances apart from avoiding settled matters to be unsettled.
So far as judgment in the case of Sita Devi (supra) is concerned, a detailed judgment has been given and, therein, the word substituted has also been considered, but, now, in view of the judgment of the Hon'ble Supreme Court in the case of Maharaja Chintamani Saran Nath Shahdeo Vs State of Bihar and ors reported in AIR 1999 SC 3609 (supra) and other cases, substitution of a provision by way of amendment has been taken to be prospective in nature unless it take away vested right.
In the present matter, substitution of the provision under section 6 has no intention to take away vested right in favour of the landlord. Thus, the amendment has to be taken prospective in nature.
Since a complete answer of the issue exists in the light of the judgments of the Hon'ble Supreme Court in the cases referred to above, I am of the opinion that increase of rent would be permissible at the rate of 7.5% per annum till the amendment and, subsequent to the amendment, it would be at the rate of 5% per annum.
In view of the aforesaid, writ petition is allowed and impugned order dated 21.4.2010 passed by the Appellate Rent Tribunal, Jaipur in review petition is set aside. The increase of rent is ordered to be determined as indicated above. No order as to costs.
(MN BHANDARI), J.
bnsharma All corrections made in the judgment/ order have been incorporated in the judgment/ order being emailed.
(BN Sharma) PS-cum-J