Rent control exemption for newly constructed buildings upheld; suits filed during the exemption period could still proceed and be executed.

Section 3 of the East Punjab Urban Rent Restriction Act, 1949 was upheld as valid because the exemption power was treated as controlled and guided by the Act's policy, not as excessive delegation. The exemption notification dated 24 September 1974 was read to protect eviction suits instituted during the five-year exemption period, allowing civil courts to decree and execute those suits even after expiry of that period. The classification between old and newly constructed buildings was also upheld as based on an intelligible differentia with a rational nexus to the object of encouraging new construction and increasing accommodation.

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Issues: (i) Whether section 3 of the East Punjab Urban Rent Restriction Act, 1949, empowering the Central Government to exempt any building or class of buildings from the Act, suffered from excessive delegation and constitutional invalidity. (ii) Whether the notification dated 24 September 1974, read with the earlier exemption notification, validly applied section 13 so that suits for ejectment instituted during the five-year exemption period could be decreed and executed even after expiry of that period. (iii) Whether the exemption notification created an impermissible discrimination between tenants of old buildings and tenants of newly constructed buildings.

Issue (i): Whether section 3 of the East Punjab Urban Rent Restriction Act, 1949, empowering the Central Government to exempt any building or class of buildings from the Act, suffered from excessive delegation and constitutional invalidity.

Analysis: The power of exemption was treated as an ancillary and controlled legislative power rather than an unguided transfer of essential legislative function. The scheme of the Act, its object of regulating rent and eviction, and the settled purpose of granting limited exemption to newly constructed buildings provided the necessary policy guidance. The provision had already been upheld in earlier decisions, and no fresh ground was found to disturb that view.

Conclusion: Section 3 was held valid and not vitiated by excessive delegation.

Issue (ii): Whether the notification dated 24 September 1974, read with the earlier exemption notification, validly applied section 13 so that suits for ejectment instituted during the five-year exemption period could be decreed and executed even after expiry of that period.

Analysis: The exemption was construed in light of its object, namely, to encourage new construction and thereby increase accommodation. The notification was held to protect the landlord's suit instituted within the exemption period, while preserving the civil court's jurisdiction to pass and execute a decree even if the exemption period expired during the pendency of the suit. The expression extending the effect of the notification beyond the exemption period was read as safeguarding rights that crystallised upon institution of the suit, not as enlarging the exemption indefinitely. The challenge based on earlier contrary cases under different statutes was rejected as those enactments did not contain an express provision preserving jurisdiction in the same manner.

Conclusion: The notification was held valid, and civil courts retained jurisdiction in suits instituted during the exemption period.

Issue (iii): Whether the exemption notification created an impermissible discrimination between tenants of old buildings and tenants of newly constructed buildings.

Analysis: Classification by reference to the date and nature of construction was treated as an intelligible differentia with a direct nexus to the object of the rent control legislation. The exemption for newly constructed buildings was held to further the broader policy of increasing accommodation and did not amount to hostile or arbitrary discrimination.

Conclusion: The classification was upheld as reasonable and non-discriminatory.

Final Conclusion: The challenge to section 3 and the exemption notification failed, and the tenants were not entitled to prevent eviction proceedings or execution merely because the five-year exemption period expired during the pendency of suits instituted within that period.

Ratio Decidendi: A statutory exemption granted to newly constructed buildings may validly preserve the civil court's jurisdiction to decide and execute suits instituted within the exemption period, and such a classification does not offend constitutional guarantees when it is rationally connected to the object of the rent control law.

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