Binding Supreme Court law governs rent-control exclusion, and lower courts cannot disregard an earlier declared position.

A Supreme Court declaration on a rent-control exclusion provision binds all courts under Article 141, and a High Court cannot ignore that binding position or treat an earlier contrary view as continuing good law. The text further notes that the validity and continued operation of the exclusion provision cannot be denied merely because rent levels change; any policy shift lies with the Legislature. On that basis, the rent-control regime was treated as governing the dispute, the civil court's jurisdictional challenge failed, and the connected matter followed the same controlling legal principle.

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Issues: (i) Whether Section 31 of the Karnataka Rent Control Act could be treated as valid and applicable so as to exclude the premises from the rent control regime on the basis of rent exceeding the statutory limit. (ii) Whether, in view of the applicability of the Act, the Civil Court lacked jurisdiction and the parties had to work out their remedies before the Rent Court.

Issue (i): Whether Section 31 of the Karnataka Rent Control Act could be treated as valid and applicable so as to exclude the premises from the rent control regime on the basis of rent exceeding the statutory limit.

Analysis: The Court held that the law declared by it in relation to the equivalent rent-control exclusion provision was binding on all courts under Article 141 of the Constitution of India. Once the Supreme Court had applied that law to the Karnataka Rent Control Act in later proceedings, the High Court was not free to prefer an earlier contrary view or to treat the earlier High Court decision as continuing good law. The Court further observed that the validity and continued operation of the rent-control exclusion provision could not be denied merely because the rent level had changed, and that policy change was a matter for the Legislature.

Conclusion: The provision was treated as applicable and the contrary High Court view was held unsustainable.

Issue (ii): Whether, in view of the applicability of the Act, the Civil Court lacked jurisdiction and the parties had to work out their remedies before the Rent Court.

Analysis: Since the Supreme Court had already held that the rent-control position governed the dispute, the direction of the High Court to pursue remedies under the Rent Control Act was not correct. The decree of the trial court was therefore restored, and the High Court's approach excluding the civil decree was set aside. In the connected matter, the Court followed the same earlier legal position and upheld the High Court's view, but granted time to vacate.

Conclusion: The Civil Court decree was restored in the first appeal, while the connected appeal was dismissed on the same governing legal principle.

Final Conclusion: The judgment reaffirmed that subordinate courts must follow the law declared by the Supreme Court, and that the rent-control exclusion provision governed the dispute according to the binding Supreme Court position, leading to restoration of one decree and dismissal of the connected challenge.

Ratio Decidendi: A High Court cannot disregard or re-evaluate a legal position already declared by the Supreme Court on the same statutory scheme, and such declaration binds all courts under Article 141 of the Constitution of India.

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