PUNJAB AND HARYANA HIGH COURT

                                             British Medical Stores

                                                         Vs

                                                L Bhagirath Mal

                                                   (Khosla, J.)

                                                   26.08.1954

                                                 JUDGEMENT

Khosla, J.

( 1. ) THESE (in Civil Revisions Nos. 243, 267 to 273, 274 to 292, 293 to 295 and 296 to 298 of
1951) are several rules which have been obtained by the landlord against the various tenants and
in Civil Revision No. 243 a rule is obtained by the tenants against the landlord, and they are all
directed against appellate orders of District Judge Dulat dated the 15th Jan 1951 varying the
orders of the Rent Controller.

( 2. ) THE landlord Bhagirath Mal, owns four sets of buildings of Chandni Chowk. They are
chemists' Market which is also called Medicine Market, Jai Hind Buildings, Prem Buildings and
deepak Mahal. Civil Revisions Nos. 243 and 274 to 292 relate to Chemists' Market, Civil
revisions Nos. 267 to 273 to Jai Hind Buildings, Nos. 293 to 295 to Prem Buildings and 296 to
298 to Deepak Mahal. All these buildings arc situate in what is called Bhagirath Colony. On the
30th of July 1948 nine tenants of nine shops in Chemists' Market dealing in radios or electrical
goods made an applications to the Rent Controller for fixation of rent under Section 7-A read
with Schedule IV of the Delhi Rent Control Act. The Rent Controller on the 12th August without
indicating in the order that he was as a matter of fact satisfied as to the excessive nature of the
rent fixed between the parties and without there being any indication that that was his objective
view issued a notice to Bhagirath Mal saying that a summary enquiry will be held and directing
him to attend at his office on the 16th August along with all relevant records, plans, account-
books vouchers, etc. , and notice was also given to the nine applicants. The notice was in regard
to these nine tenants only. It appears that after several adjournments the parties appeared and on
the 19th of November some proceedings were taken and statement of Kundan Lal on behalf of
the landlord was recorded. On the 3rd December 1948 a notice was issued to the landlord that the
Rent Controller would inspect the premises on the 6th December 1948, but the landlord informed
him that he would not be in Delhi on that date. On the I2th December 1948 the Rent Controller
inspected the premises in the absence of the landlord and on the 10th of January 1949 he fixed
the standard rent for eighteen shops at Rs. 335/-per mensem. He has noted in this order about the
quality of the building. The value of the land was calculated at Rs. 275/- per square yard, but he
allowed only one-third of the value as the building is only one-storeyed and not a three-storeyed
one and he calculated the value of the plinth area at Rs. 9/8/- per square foot and the standard
rent fixed including ten per cent, for repairs but excluding house tax and charges for consumption
of water and electricity was Rs. 335/- p. m. On appeal being taken to the District Judge the
monthly rent was increased from Rs. 335/-to Rs. 670/- allowing the full value of the land, Both
parties are dissatisfied with this order and have come up to this Court in revision. The Rent
Controller has hot only fixed the rent of the shops for which application was made but has also
fixed the rent of the shops occupied by other persons who never applied and there-fore could not
be parties to the proceedings and also of the vacant shops, and with regard to these shops no
notice seems to have been given. The objection taken by the landlord is that section 7-A read
with Schedule IV is discriminatory inasmuch as it provides a different tribunal and procedure for
determining the standard rent with regard to premises the construction of which was not
completed before the commencement of the Act which was on the 24th March 1947 and that the
method provided by Schedule IV laid down no principles and were vague, indefinite and
unreasonable, that the Rent Controller had no jurisdiction to decide whether the buildings were
completed before or after March 1947 nor could he reduce the rent at which the premises were
first Jet and that in this particular case he had made private enquiries and had invited no evidence
from the contestants and the calculations which he made for fixing the rent were not shown to the
parties for rebutting them if they thought it necessary, and therefore the order of the Controller
was vitiated as it was contrary to the principles of natural justice. I have first to decide as to
which law will govern the present case, the law in force at the time of decision by the Controller
or the law existing on the date the appeal was decided. At the time when the proceedings started
or the Controller gave his decision the case was governed by section 7a and Schedule IV of the
Act. This section provides for the fixation of standard rent of premises in Delhi the construction
of which was not completed before the commencement of this act, The Delhi Rent Restriction
Act came into force on the 24th of March 1947 and Section 7a was added by Section 5 of the
amending Act L of 1947. Thus the premises the construction of which was completed after the
commencement of this Act are governed by a special procedure given in Section 7-A which
makes the provisions of Schedule IV applicable to the determination of standard rent of such
buildings, the relevant portions of which are: "1. . . . . . . 2. If the Rent Controller on a written
complaint or otherwise has reason to believe that the rent of any newly constructed premises is
excessive, he may, after making such inquiry as he thinks fit, proceed to fix the standard rent
thereof. 3. The Rent Controller in fixing the standard rent shall state in writing his reasons
therefore. 4. In fixing the standard rent, the Rent Controller shall take into consideration all the
cirstances of the case including any amount paid or to be paid by the tenant by way of premium
or any other like sum in addition, to rent. ***** 7. For the purposes of an inquiry under paras. 2,
5 and 6, the Rent Controller may (a) require the landlord to produce any book of account,
document or other information relating to the newly constructed premises. (b) enter and inspect
such premises after due notice, and (c) authorise any officer subordinate to him to enter and
inspect such premises after due notice. " Thus according to these provisions, if the Rent
Controller has reason to believe that the rent of any premises is excessive whether an application
has been made to him or not, he can proceed to fix the standard rent and in determining tills rent
he is authorised to look into the accounts of the landlord relating to the newly constructed
premises, enter or inspect the premises though after notice, and this is the material on which, it
appears he has to determine the standard rent. Both under the Act of 1947 before Section 7-A
was inserted in the Act and after the coming into force of the new Act of 1952 no distinction was
and is made as to the tribunals which will determine the standard rent of premises new or old or
the procedure to be followed or the principles on which the standard rent is to be fixed. Thus for
the period during which Section 7-A was in force a different procedure and different tribunals for
determination were prescribed by the Act in regard to premises the constructions of which was
completed before or after, the 24th of March 1947. As I see the provisions of Schedule IV the
Rent Controller could not take cognizance of this matter without giving a finding that he had
reasonable grounds to believe that the rent was in fact excessive. Reference may be made to --
'nakkuda Ali v. Jayaratne', 54 Cal WN 883 (PC) (A), where the words in the Regulation were--
"where the Controller has reasonable grounds to believe. . . . . . . . . . " which were interpreted by
Lord Radcliffe to mean "as imposing a condition that there must in fact exist such reasonable
grounds known to the Controller, before he can validly exercise the power of cancellation" (p.
889 ). The Privy Council disagreed with the interpretation of the House of Lords in -- 'liversidge
v. Anderson'1, where the words used were ". . . . . . has reasonable cause to believe. " no doubt the
words used in the present statute are ". . . . . . has reason to believe" but it appears to me that
these words do not have a different meaning from that given by Lord Radcliffe in--'kakkuda Ali's
case (A)', to the words which I have given above. Thus there was in the absence of an objective
determination no basis for a valid exercise of the power of the Rent Controller. find therefore in
my opinion the subjective i. e. an honest opinion of the Rent Controller does not give to the
Controller the jurisdiction to take cognizance of the matter and this view is in accord with the
decision in -- "nakkuda Ali's case (A)'. At the time when the learned District Judge decided the
appeal the Constitution of India had come into force on the 26th January 1950. The question is
whether the learned District Judge should have decided the appeals in accordance with the law
which prevailed at the time he was deciding the appeal or in accordance with the law which was
in existence at the time when the proceedings were started, i. e. on the 30th of July, 1948, or
when the first Court decided the matter on the 11th of January 1949.

( 3. ) THE landlord petitioner contends that the law in force at the time when the learned District
judge was giving his decision would be applicable to his case. In other words if there was any
change in the law during the pendency of the appeal the learned District Judge should have
decided in accordance with that changed law. Reliance is first of all placed on -- 'quitter v.
Mapleson', (1882) 9 QBD 672 (C), where a landlord brought an action to recover the demised
property under a proviso of re-entry for breach of a covenant to insure. Relief was claimed under
a statute and a judgment was obtained by the plaintiff on the 4th July 1881, but a stay of
proceedings was granted and the plaintiff did not get possession. On the 1st of January 1882 the
Conveyancing and Law of Property Act came into operation which was before the appeal was
heard, and it was held that assuming the judgment of the first Court to have been correct
according to the law as it then stood, the Court of Appeal could grant to the tenant the relief to
which he was entitled according to the law as it stood at the hearing of the appeal and the Court
of Appeal was authorised not merely to make an order which ought to have been made by the
first Court but to make such further or other orders as the case may require. At page 676 Jessel,
M. R. , said: "it was, in my opinion, intended to give appeals the character of rehearings, and to
authorise the court of Appeal to make such order as ought to be made according to the state of
things at the time. " Bowen, L. J. , said at page 678: "if the law has been altered pending an
appeal, it seems to me to be pressing rules of procedure too far to say that the Court of Appeal
cannot decide according to the existing state of the law. " The next case referred to is -- 'attorney-
General v. Birmingham, Tame, and Rea District drainage Board2', where it was held that an
appeal to the Court of Appeal is by way of rehearing, and the Court may make such order as the
Judge of first instance could have made if the case has been heard by him at the date on which
the appeal was heard. At page 801 lord Gorell said: "the Court also has power to take evidence of
matters which have occurred after the date of the decision from which the appeal is brought see
Order LVIII, Rule 4)It seems clear, therefore, that the Court of Appeal is entitled and ought to
rehear the case as at the time of rehearing, and if any authority were required for this proposition
it is to be found in the case of ' (1882) 9 QBD 672 (C)'. " I may here point out that Order LVIII
Rule 4 of the supreme Court Rules of England corresponds to Order 41, Rule 33 of the Code of
Civil procedure in India. The rule accepted by the Federal Court of India is the same. In --
'lachmeshwar Prasad v. Keshwar Lal3, it was held that the Federal Court of India as a Court of
appeal was entitled to take into consideration legislative changes which had supervened since the
decision under appeal was given. At page 6, Gwyer, C. J. , said: "with regard to the question
whether the Court is entitled to take into account legislative changes since the decision under
appeal was given, I desire to point out that the rule adopted by the Supreme Court of the United
States is the same as that, which, I think, commends Itself to all three members of this Court. "
and this rule was laid down in two cases. In -- 'patterson v. State of Alabama'4, Chief Justice
Hughes said: "we have frequently held that in exercise of our appellate jurisdiction we have
power not only to correct error in the judgment under review but to make such disposition of the
cases as justice requires. And in determining what justice does require, the Court is bound to
consider any change, either in fact or in law, which has supervened since the judgment was
entered. " ;

Cases Referred.

1(1942) AC 206 (B)
21912 AC 788 (D)
3AIR 1941 FC 5 (E)
4(1934) 294 US 600 at p. 607 (F)