Supreme Court of India Clarifies Parliamentary Supremacy over State Amendments in Concurrent List Subjects: Implications for Section 106 of the Transfer of Property Act

Introduction

The Supreme Court of India, in the case of Naeem Bano Alias Gaindo v. Mohammad Rahees & Anr. (2024 INSC 1000), addressed a critical issue regarding the interplay between State amendments and subsequent Parliamentary legislation on subjects within the Concurrent List of the Constitution. The case revolved around the applicability of Section 106 of the Transfer of Property Act, 1882 (T.P. Act), as amended by the State of Uttar Pradesh (U.P.) and later by the Parliament. The key issue was whether the U.P. amendment to Section 106 remained valid after Parliament enacted its own amendment to the same provision. This decision has significant implications for landlords and tenants, as well as for understanding the constitutional principles governing legislative competence and repugnancy under Article 254 of the Constitution of India.

Background of the Case

The appellant, Ms. Naeem Bano alias Gaindo, is the landlord of a property in dispute, and the respondent, Mr. Mohammad Rahees, is the tenant occupying the said property. The landlord issued an eviction notice to the tenant on July 24, 2015, under Section 106 of the T.P. Act, seeking termination of the tenancy. The notice period stipulated conformed to the provisions of Section 106 as amended by the Parliament in 2002. However, the tenant contested the validity of the notice, arguing that it did not comply with the U.P. amendment to Section 106, which required a longer notice period.

The tenant's contention was upheld by the lower courts, leading the landlord to approach the High Court of Allahabad under Article 227 of the Constitution. The High Court, noting that a larger Bench was considering a similar issue (the correctness of notice periods under the conflicting amendments), decided to defer the case until the larger Bench provided its answer. Aggrieved by the delay and the continuation of the interim order, the landlord appealed to the Supreme Court.

Summary of the Judgment

The Supreme Court set aside the High Court's order, holding that the High Court ought to have resolved the issue without awaiting the decision of the larger Bench. The Court clarified that the Parliamentary amendment to Section 106 of the T.P. Act supersedes the prior State amendment by U.P. The Court reasoned that, under the proviso to Article 254(2) of the Constitution, a subsequent law enacted by Parliament prevails over an earlier State law, even if the State law had received Presidential assent. Consequently, the notice issued by the landlord under the amended Section 106 was valid, and the High Court was directed to dispose of the tenant's revision petition on merits expeditiously.

Analysis

Precedents Cited

The Supreme Court relied on several landmark judgments to interpret Article 254 of the Constitution and its application to the case at hand:

1. Zaverbhai Amaidas v. State of Bombay ([1955] SCR 799): The Court noted that Article 254(2) resembles Section 107(2) of the Government of India Act, 1935, with the proviso expanding Parliamentary powers. It emphasized that Parliament can override State laws even if they have Presidential assent.
2. Gauri Shankar Gaur v. State Of U.P. ([1993] Supp.1 SCR 667): This case underscored that State laws inconsistent with Union laws are void to the extent of the inconsistency. It also reaffirmed the Parliament's power to repeal or amend such State laws under the proviso to Article 254(2).
3. Innoventive Industries Ltd. v. ICICI Bank ([2017] 8 SCR 33): The Court extracted principles regarding repugnancy and Parliamentary supremacy, highlighting that subsequent Union legislation would prevail over prior State laws in the Concurrent List.

Legal Reasoning

The crux of the Court's reasoning lies in the interpretation of Article 254 of the Constitution, which addresses inconsistencies between Central and State legislation on Concurrent List subjects. The Court examined the following key points:

Concurrent Legislative Competence

Both Parliament and State Legislatures have the authority to legislate on subjects in the Concurrent List, such as "Transfer of Property other than agricultural land" (Entry 6, List III). Accordingly, the U.P. Legislature validly amended Section 106 of the T.P. Act in 1954, and this amendment was operative in the state.

Application of Article 254(1)

Article 254(1) establishes that in cases of repugnancy between a State law and a Union law, the Union law prevails. However, Article 254(2) provides an exception where the State law, if it has received Presidential assent, prevails within that State, notwithstanding any inconsistency with an earlier Union law.

Proviso to Article 254(2)

The proviso to Article 254(2) stipulates that Parliament retains the power to enact laws repugnant to State laws and can override State legislation even if it had Presidential assent. This reflects the principle of Parliamentary supremacy within the constitutional framework.

Implied Repeal and Repugnancy

The Court held that the subsequent Parliamentary amendment to Section 106, effective from December 31, 2002, impliedly repealed the U.P. State amendment due to repugnancy. The amendments could not operate concurrently as they prescribed different notice periods and conditions for the termination of leases.

By applying the doctrine of implied repeal, the Court recognized that when two laws cannot stand together due to inconsistency, the later law (in this case, the Parliamentary amendment) prevails.

Impact on Future Cases and the Law

This judgment has far-reaching implications:

• Clarity on Legislative Competence: It reaffirms the principle that in Concurrent List subjects, Parliamentary legislation overrides State legislation in cases of repugnancy, especially when the Parliament enacts a subsequent law.
• Uniform Application of Laws: The decision ensures uniformity in the application of Section 106 of the T.P. Act across India, preventing discrepancies due to differing State amendments.
• Guidance for Courts: Lower courts are guided to apply the Parliamentary amendment to Section 106 even in states where previous State amendments existed, expediting litigation related to eviction notices and lease terminations.
• Tenant-Landlord Relations: The judgment affects the procedural requirements for terminating tenancies, impacting both landlords and tenants regarding notice periods and the validity of eviction notices.
• Constitutional Interpretation: It provides a precedent for interpreting Article 254, aiding in resolving future conflicts between State and Union laws on Concurrent List subjects.

Complex Concepts Simplified

Understanding Article 254 of the Constitution

Concurrent List: The Constitution divides legislative powers between the Parliament and State Legislatures. The Concurrent List includes subjects where both can legislate.

Repugnancy: When a State law conflicts with a Union law on a Concurrent List subject, the laws are said to be repugnant if they cannot operate harmoniously.

Article 254(1): If there's a conflict (repugnancy) between State and Union law, the Union law prevails, and the State law is void to the extent of the conflict.

Article 254(2): An exception where if the State law conflicting with an earlier Union law has Presidential assent, it prevails within the State.

Proviso to Article 254(2): This clause empowers Parliament to override State laws, even those with Presidential assent, by enacting a subsequent law on the same subject. The Parliamentary law will then prevail.

Doctrine of Implied Repeal

When a later law contradicts an earlier one, and both cannot operate together, the earlier law is deemed to be repealed by implication. This ensures that the legal system remains coherent, with newer laws reflecting current legislative intent prevailing over older, conflicting statutes.

Conclusion

The Supreme Court's decision in Naeem Bano Alias Gaindo v. Mohammad Rahees & Anr. reinforces the constitutional principle of Parliamentary supremacy in the context of Concurrent List subjects. By clarifying that the Parliamentary amendment to Section 106 of the T.P. Act supersedes the earlier State amendment by U.P., the Court ensures legal uniformity and predictability. This judgment serves as a crucial precedent for resolving conflicts between State and Union legislation, emphasizing that subsequent Parliamentary laws will prevail over State laws, even those with Presidential assent, under the proviso to Article 254(2) of the Constitution.

The ruling has significant practical implications for the termination of leases and eviction proceedings across India, particularly in states that had their own amendments to Section 106. It underscores the importance for legal practitioners and litigants to stay abreast of Parliamentary legislation, recognizing its paramountcy in the constitutional framework.