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Issues: (i) Whether section 7A and the Fourth Schedule of the Delhi and Ajmer-Marwara Rent Control Act, 1947 violated Article 14 of the Constitution of India; (ii) whether the Rent Controller's procedure in fixing standard rent offended the principles of natural justice; (iii) whether the premises in dispute were newly constructed premises so as to attract section 7A and whether the High Court was justified in interfering with concurrent findings on that question.
Issue (i): Whether section 7A and the Fourth Schedule of the Delhi and Ajmer-Marwara Rent Control Act, 1947 violated Article 14 of the Constitution of India.
Analysis: The scheme of the Act drew a distinction between premises completed before and after 24 March 1947, but that classification was held to rest on a rational basis. The law treated newly constructed premises differently because of the changed cost structure, the rise in prices, the need to encourage construction after the acute shortage of accommodation, and the possibility of excessive rents in the post-1947 period. The procedure under the Fourth Schedule was also not arbitrary, since reasons had to be recorded, relevant circumstances had to be considered, inspection and requisition powers were controlled, and an appeal lay to the District Judge.
Conclusion: Section 7A and the Fourth Schedule were held not to be unconstitutional and not violative of Article 14.
Issue (ii): Whether the Rent Controller's procedure in fixing standard rent offended the principles of natural justice.
Analysis: The landlord was repeatedly called upon to produce documents and to submit his case, was granted several adjournments, was informed of inspection, and was given further time to file a written statement. The record showed repeated non-cooperation on the landlord's part. In such circumstances, the use of local inquiry, inspection, and material gathered in the landlord's absence did not amount to denial of a fair hearing, since the party had been given a real opportunity to participate and to adduce evidence.
Conclusion: No breach of natural justice was found in the actual proceedings before the Rent Controller.
Issue (iii): Whether the premises in dispute were newly constructed premises so as to attract section 7A and whether the High Court was justified in interfering with concurrent findings on that question.
Analysis: On the evidence, the Rent Controller and the District Judge had found in one set of appeals that the buildings or parts in question were completed after the relevant date, and in the other set that the second-floor flats were newly constructed. The question whether the premises were newly constructed was a jurisdictional fact, but where that fact had been found on clear evidence by two authorities, the High Court ought not to have disturbed it merely on a different view of the material. Findings supported by evidence were not open to interference in revision on the grounds taken.
Conclusion: The finding that the premises were newly constructed was upheld, and the High Court's interference was held unjustified.
Final Conclusion: The appeals succeeded, the impugned High Court orders were set aside, and the orders of the District Judge were restored in the appeals where that was appropriate, while the matter in the remaining appeal was directed to be decided afresh in accordance with law.
Ratio Decidendi: A statutory classification based on a real difference in the nature and timing of construction is valid under Article 14, and where a party has been given repeated opportunity to participate, ex parte inquiry and inspection do not violate natural justice; concurrent factual findings supported by evidence should not be displaced in revision merely because a different inference is possible.
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