Prospectively operating delegated rules may validly distinguish past and future allotments without violating Article 14.

Rule 2(h) of the Displaced Persons Compensation and Rehabilitation Rules, 1955 was upheld under Article 14 because the distinction it drew was temporal, separating allotments made before and after commencement of the rule. Made within delegated power under section 40 of the 1954 Act, the rule was not unconstitutional merely because it operated prospectively and altered the legal position from its start date. The allotment in question, made after the rule came into force and in respect of land already within municipal limits, could not be sustained and was held invalid.

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Issues: Whether rule 2(h) of the Displaced Persons Compensation and Rehabilitation Rules, 1955 was unconstitutional under Article 14 of the Constitution of India and whether the allotment made after the rules came into force could be sustained.

Analysis: Section 40 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 empowered the Central Government to make rules to carry out the purposes of the Act. Rule 2(h) defined "urban area" and its proviso treated earlier quasi-permanent allotments in Punjab and PEPSU on the basis of the position as on 15 August 1947. The allotment in question was made after the rules came into force, and the land was already within municipal limits on the date of allotment. The distinction drawn by the rule was only between allotments already made and allotments made after the rule came into force. A rule does not become unconstitutional merely because it operates prospectively and changes the law from the date of its commencement.

Conclusion: Rule 2(h) was not violative of Article 14, and the allotment made after the rule came into force was invalid.

Ratio Decidendi: A prospectively operating rule made within delegated power is not unconstitutional merely because it draws a temporal line between past and future transactions.

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