Historical rent-fixation formula upheld where no demonstrable arbitrariness or unreasonableness was shown.

Section 4 of the East Punjab Urban Rent Restriction Act, 1949, fixing fair rent by reference to pre-1939 rent levels with specified increases, was upheld against challenge under Articles 14 and 19(1)(g). The Court held that rent-fixation policy must be assessed in the context of the State legislature's chosen scheme and objectives, and a provision is not invalid merely because other States adopt different methods. In the absence of demonstrable arbitrariness or unreasonableness, the historical base for fair rent did not by itself render the provision unconstitutional.

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Issues: Whether Section 4 of the East Punjab Urban Rent Restriction Act, 1949, which fixes fair rent by reference to the rent prevalent during the twelve months prior to 1 January 1939 and permits specified increases, is ultra vires the Constitution as arbitrary, unreasonable, and violative of Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The challenge was founded on the contention that pegging fair rent to 1938 levels was unfair in view of post-war price rises and that other State rent laws adopted different methods. The Court held that the validity of such legislation must be judged in the context of the conditions and policy choices of the particular State legislature. Article 14 does not permit striking down one State law merely because another State has adopted a different rent-fixation scheme. Legislative wisdom in selecting the method of fair rent fixation is not, by itself, a ground for invalidation. Having regard to the object of the Act, namely restriction of increase in rent, and the statutory scheme allowing increases from the 1938 base, the provision was not shown to be unreasonable or arbitrary per se.

Conclusion: The constitutional challenge to Section 4 failed and the provision was upheld as valid.

Ratio Decidendi: A rent-control provision fixing fair rent with reference to historical rent levels is not unconstitutional merely because another State has adopted a different formula; legislative choice in rent-fixation policy will not be struck down under Article 14 or Article 19(1)(g) absent demonstrable arbitrariness or unreasonableness.

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