Exemption power under rent control law upheld, but an individual exemption order was struck down for irrelevant reasons.

Section 13 of the Madras Buildings (Lease & Rent Control) Act, 1949 was upheld as a valid exemption power because the Act's preamble and scheme supplied a clear policy of regulating letting, controlling rents, and preventing unreasonable eviction, so the provision was not an unguided discretion under Article 14. At the same time, an individual exemption order under that provision remained subject to judicial review under Article 226 and could be quashed if the Government relied on reasons not germane to the Act's purpose. The majority view treated the stated grounds for exemption as irrelevant to tenant protection, while the dissent considered the order within statutory power.

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Issues: (i) Whether section 13 of the Madras Buildings (Lease & Rent Control) Act, 1949, conferred an unconstitutional unguided and arbitrary power on the State Government in violation of Article 14 of the Constitution. (ii) Whether the Government's order exempting the premises from the operation of the Act was liable to be quashed under Article 226 on the ground that the reasons for exemption were not germane to the policy and purpose of the Act.

Issue (i): Whether section 13 of the Madras Buildings (Lease & Rent Control) Act, 1949, conferred an unconstitutional unguided and arbitrary power on the State Government in violation of Article 14 of the Constitution.

Analysis: The Act's preamble and scheme disclosed a clear legislative policy of regulating letting, controlling rents, and preventing unreasonable eviction of tenants. The power of exemption was not a naked discretion but one to be exercised consistently with that policy. A provision enabling exemptions, even of individual buildings, is not invalid merely because the statute leaves application of the policy to executive judgment, so long as the statute supplies adequate guidance.

Conclusion: Section 13 was held constitutionally valid and not violative of Article 14.

Issue (ii): Whether the Government's order exempting the premises from the operation of the Act was liable to be quashed under Article 226 on the ground that the reasons for exemption were not germane to the policy and purpose of the Act.

Analysis: The exemption order affected statutory protection against eviction and was therefore open to judicial review. The Court held that the Government had to act on grounds relevant to the Act's purpose and that the High Court was not acting as an appellate authority but was examining whether the stated reasons were germane. On the majority view, the reasons relied upon by the Government did not justify withdrawal of the tenant's protection, since the mere expiry of the lease and the circumstances advanced by the Government were not relevant to the policy of preventing unreasonable eviction. The dissenting opinion took the contrary view that the circumstances showed a legitimate use of the exemption power and that the order was within the scope of the Act.

Conclusion: By the majority, the exemption order was quashed as based on irrelevant grounds; the dissent would have upheld the order.

Final Conclusion: The constitutional validity of the exemption provision was sustained, but the particular exemption order was invalidated by the majority as not founded on relevant considerations under the statute.

Ratio Decidendi: A statutory power of exemption is constitutionally valid where the enactment itself supplies a governing policy, but an individual exemption order remains reviewable and can be struck down if it is based on grounds extraneous to that policy and purpose.

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