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Smart Summary

Factual and Procedural Background

This reference was made by the Civil Judge, Senior Division, Nasik, arising from a suit filed on April 18, 1952 for recovery of arrears of rent and for ejectment. Before the learned Civil Judge the defence was that the suit was not maintainable because s. 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 confers jurisdiction to hear rent suits upon the Civil Judges, Junior Division. The specific question referred to the Court was whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947 (as amended by Bombay Act XLIII of 1951) applied to premises situate in the cantonment area of Deolali.

Legal Issues Presented

  1. Whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947 (as amended by Bombay Act XLIII of 1951) applies to premises situated in the cantonment area of Deolali.
  2. Whether, under the Constitution, the State Legislature was competent to extend the operation of the Bombay Rents Act to cantonment areas (in light of entries in the Seventh Schedule, particularly entry (3) in List I and entry (18) in List II).
  3. Whether, in consequence of the Act's application (if any), the competent court to try the rent suit was the Civil Judge, Junior Division, rather than the Civil Judge, Senior Division.

Arguments of the Parties

Mr. Desai's Arguments

  • Under the Constitution, power to control rents in cantonment areas is vested in Parliament by List I of the Seventh Schedule; thus the State could not extend the Bombay Rents Act to cantonment areas.
  • The Amending Act XLIII of 1951, which extended the operation of the Bombay Rents Act up to March 31, 1953, trespassed upon the field reserved for Parliament and was therefore invalid as applied to cantonment areas.
  • The language of entry (3) in List I (which contains the phrase "including the control of rents") is broader than the corresponding provision under the Government of India Act and shows that Parliament has power to control rents in cantonment areas generally, not merely in relation to regulation of house accommodation by requisition/acquisition/allocation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
A.C Patel v. Vishwanath Chade(2) Held that regulation of house accommodation (in the context of cantonments) referred to requisitioning, acquiring or allocation of property and did not include relations between landlord and tenant. The Court relied on this reasoning to distinguish parliamentary power over house accommodation from State power over landlord–tenant relations; it supported the conclusion that State legislation could regulate landlord–tenant relations in cantonments.
A.C Patel's case(3) Addressed the grammatical construction of the word "including" as an expression of extension rather than limitation. The Court accepted the grammatical observation but analysed the scope of the "including the control of rents" phrase, concluding that the extended power for Parliament related only to rents associated with regulated house-accommodation (e.g., houses acquired/requisitioned/allocated), not private landlord–tenant rents.

Court's Reasoning and Analysis

The Court approached the question by construing the relevant entries of the Seventh Schedule so as to avoid conflict between Union and State powers. It noted the established principle that the entries in the Union, State and Concurrent Lists should be reconciled where possible and that the Constituent Assembly was not to be taken as intending a conflict between Parliament and State legislatures.

The Court observed that entry No. (18) of List II of the Seventh Schedule corresponds in substance to entry (21) of List II under the Government of India Act and grants the State Legislature power to legislate regarding relations of landlord and tenant and collection of rents. The Bombay Rents Act deals with such relations and collections.

The Court analysed the expression in entry (3) of List I ("including the control of rents") and concluded that this phrase must be read in relation to the preceding phrase "house accommodation." The Court held that Parliament's additional power was intended to cover control of rents only insofar as those rents were associated with the regulation of house accommodation (for example, houses acquired, requisitioned, or allocated for accommodation purposes). It was not intended to transfer to Parliament general power to control rents between private landlords and tenants in cantonment areas.

On that basis the Court concluded that the State Legislature was competent to enact the Amending Act XLIII of 1951 and apply it to the Cantonment area of Deolali. Consequently, s. 28 of the Bombay Rents Act, which confers jurisdiction on Civil Judges, Junior Division, applied; the Civil Judge, Senior Division was not the competent forum for the rent suit.

Holding and Implications

Core Ruling: REFERENCE REJECTED

Direct effects on the parties:

  • The Court held that the State Legislature was competent to extend the Bombay Rents Act (by Amending Act XLIII of 1951) to the cantonment area of Deolali.
  • Accordingly, s. 28 of the Bombay Rents Act applies and the competent court to try the rent suit is the Civil Judge, Junior Division rather than the Civil Judge, Senior Division.
  • The reference was rejected and there was no order as to costs.

Broader implication: The opinion construes the phrase "including the control of rents" in entry (3) of List I as limited to rents connected with regulation of house accommodation (such as houses acquired or requisitioned for accommodation), thereby leaving general regulatory power over landlord–tenant relations and collection of rents with State legislatures under List II. The opinion does not announce a broader novel principle beyond this interpretive conclusion.

Answer accordingly.

K.B.S

    F.E Darukhanawalla v. Khemchand Lalchand

    Chagla, C.J:—

    This is a reference made by the Civil Judge, Senior Division, Nasik, and it arises out of a suit field before him for the recovery of arrears of rent, and for ejectment. The suit was filed on April 18, 1952, and the contention raised before him was that the suit was not maintainable in view of s. 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which confers jurisdiction to hear rent suits upon the Civil Judges, Junior Division; and the question that the learned Judge had to consider was, whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, as amended by Bombay Act XLIII of 1951 applied to the premises in question, which were situate in the cantonment area of Deolali.

    Mr. Desai, who has appeared before us to support the Reference and the view taken by the learned Judge, viz., that the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, does not apply to cantonment areas has contended, that under the Constitution power to control rents with regard to properties situate in the cantonment areas is conferred upon Parliament by List I of the Seventh Schedule of the Constitution, which is an Union List, and when the Legislature extended the operation of the Bombay Rents, Hotel and Lodging House Rates Control Act LVII of 1947 up to March 31, 1953, by the Amending Act XLIII of 1951 it trespassed upon the field reserved for Parliament, and the extension of the Act was not valid.

    Mr. Desai says that whatever might have been the position when Bombay Act LVII of 1947 was passed, which was passed under the Government of India Act, the position under the Constitution is different, and the legislation must be considered from the point of view, whether under the Constitution the State Legislature is competent to enact laws controlling rents in cantonment areas.

    Now, a similar matter came up for consideration before a Division Bench consisting of myself and my brother Dixit. [A.C Patel v. Vishwanath Chade(2)]. There we had to consider whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, applied to cantonment areas of Kirkee; and the contention there put forward by Mr. Kotwal for the petitioner was that the Act did not apply because of entry (2) in List I of the Government of India Act, which conferred upon the Central Legislature the power to legislate with regard to regulation of house accommodation in cantonment areas. We rejected that contention holding that regulation of house accommodation meant requisitioning of property, acquiring of property or allocation of property, but not the question of relations between landlord and tenant; and when the Legislature was dealing with relations of landlord and tenant, it was legislating under the power conferred upon it by entry (21) in List II.

    Mr. Desai contends that whatever might have been the position under the Government of India Act, under the Constitution entry (3) in List I, which has taken the place of part of entry (2) in List I, is framed in a language which is different from the language used in the Government of India Act: and what is emphasized is that in entry (3) in List I we now find the expression ‘including the control of rents,’ which makes it clear that Parliament has not only the power of regulating the housing accommodation, but also the power of controlling rents in cantonment areas; and therefore, it is urged, that when the State Legislature extended the operation of the Bombay Act. LVII of 1947, up to March 31, 1953, by the amending Act XLIII of 1951, it was not competent to apply that extension to cantonment areas.

    In our opinion that contention is not tenable. It is a well settled principle of construction of various entries in the Seventh Schedule to the Constitution that as far as possible an attempt must be made to reconcile entries in the Union List, the State List and the Concurrent List, and that we must avoid attributing to the Constituent Assembly an intention of bringing about a conflict between the powers of the State Legislatures and the Parliament. In List II of the Seventh Schedule we have an entry in identical terms with entry (21) in List II of the Government of India Act, and that entry is No. (18). Therefore even under the Constitution a State Legislature has been given the power to legislate with regard to matters which concern the relation of landlord and tenant and collection of rents. It cannot be disputed that the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, deals with relations of landlord and tenant and collection of rents. The question then is, whether it was the intention of the Constituent Assembly that the State Legislature should have no power to legislate with regard to relations of landlord and tenant and collection of rents with regard to properties which are situate in the cantonment areas although those properties might be owned by private owners and might be tenanted by private individuals. Did the Constituent Assembly intend that merely because a house was situate in a cantonment area the State Legislature cannot regulate relations between landlord and tenant, although both—the landlord and tenant—were private persons.

    In our opinion it is not necessary to limit the power of the State Legislature with regard to its legislative competence conferred upon it under entry (18) of List II, because it is clear that what the expression ‘including the control of rents’ in entry (3) in List I means that the control of rents contemplated by this entry is in relation to ‘the house accommodation’ which expression precedes the expression ‘including the control of rents’. It is true that we have taken the view in A.C Patel's case(3) that on the proper grammatical construction the expression ‘including’ is an expression of extension, and not the expression of limitation. Therefore, Mr. Desai is right that the Constituent Assembly wanted to confer upon the Parliament a power additional to the power that was enjoyed by the Central Legislature under the Government of India Act.

    But the question is what was the nature of that additional power. It is clear that the nature of that additional power was that the Parliament should not only regulate house-accommodation in the sense of acquiring, requisitioning or allocating houses in cantonment areas, but may also, in respect of the houses so acquired, requisitioned, or allocated, control rents. Therefore the control of rents with which Parliament could deal is not control of rents which had no relationship with the house accommodation which had to be regulated for the purposes of accommodation. It was not the intention of the Constituent Assembly to confer upon Parliament the power to control rents between private landlords and tenants; that power was left to the State Legislatures under List II. It was only when rents had to be controlled as something additional to the regulation of house accommodation in the cantonment area that the power of Parliament arose to deal with that subject. Therefore, in our opinion, the State Legislature was competent to enact the Amending Act XLIII of 1951, and to apply it to the Cantonment area of Deolali.

    Therefore the contention taken before the learned Judge was a sound one, that in view of s. 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, the competent court was not the court of the Civil Judge, Senior Division, but the Court of the Civil Judge, Junior Division. We must, therefore, reject the reference.

    The reference is therefore rejected. No order as to costs.

    Answer accordingly.
    K.B.S
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    Comments

    F.E Darukhanawalla v. Khemchand Lalchand
    (Aug 18, 1953)