1994 (10) TMI 301 - SC - Indian Laws

Court validates Delhi Rent Control Act's rent exemption above Rs. 3500, clarifies prospective application

The court upheld the constitutional validity of Section 3(c) of the Delhi Rent Control Act, 1958, which exempts premises with monthly rent exceeding Rs. ... - Issues Involved:1. Constitutional validity of Section 3(c) of the Delhi Rent Control Act, 1958.2. Interpretation of Section 3(c) regarding its prospective or retrospective application.3. Definition of 'rent' in the context of Section 3(c).Summary:1. Constitutional Validity of Section 3(c):The primary issue was whether Section 3(c) of the Delhi Rent Control Act, 1958, which exempts premises with monthly rent exceeding Rs. 3500 from the Act's provisions, is ultra vires Article 14 of the Constitution. The appellant argued that this classification was arbitrary and discriminatory, failing to consider factors such as locality, size, and the period of tenancy. The court, however, upheld the classification, stating that it was a matter of legislative policy aimed at balancing the interests of landlords and tenants and boosting house-building activity. The court emphasized that legislative classifications need not be mathematically precise and are permissible if they have a rational nexus with the statute's objectives.2. Prospective or Retrospective Application of Section 3(c):The appellant contended that Section 3(c) should not apply to tenancies created before the amendment came into force on 1-12-1988, as it would affect vested rights. The court rejected this argument, stating that the amendment partially repealed the Delhi Rent Control Act, withdrawing protection from tenants paying Rs. 3500 or more as monthly rent. The court noted that tenants only had a right to take advantage of the statute while it was in force, and this right did not constitute a vested right that could not be altered by subsequent legislation.3. Definition of 'Rent' in Section 3(c):The appellant argued that 'rent' in Section 3(c) should be construed as 'standard rent' rather than the actual rent paid. The court dismissed this argument, clarifying that the legislature did not use the term 'standard rent' in Section 3(c). The court stated that the term 'rent' should be understood in its ordinary meaning and that the provision aimed to exclude tenants who could afford to pay more than Rs. 3500 per month from the Act's protection. The court emphasized that the exact amount of monthly rent paid on the relevant date was the determining factor for applying Section 3(c).Conclusion:The court dismissed the appeal, upholding the constitutional validity of Section 3(c) of the Delhi Rent Control Act, 1958, and clarifying its prospective application and interpretation of 'rent.' The court emphasized the legislative intent to balance the interests of landlords and tenants and to boost house-building activity.