# HUKAM CHAND ETC v. UNION OF INDIA & OTHERS

- **Citation:** [1973] 1 S.C.R. 896
- **Court:** Supreme Court of India
- **Decided:** 1972-08-22
- **Case number:** Civil Appeals Nos. 1031, 1094'.--1095 of 1967
- **Bench:** K. S. Hegde, P. Jaganmohan Reddy, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hukam-chand-etc-v-union-of-india-others-5736
- **Pages:** 8

## Headnote

Displaced Persons (Compensation and Rehabilitation)
Act,
1954S.40--Rule making power-Does not confer power to nuike rules retroactively,
Rule making:--Retroactive rule making-Provision for laying on the
-Table 11:ould not prevent courts from deciding rule ultra vires.
Rule 49 of the Displaced Persons (Compensation and Rehabilitation)
Act, 1954, framed in exercise of the powers conferred by S.40 of the
Act, provided that displaced person having verified claim· in respect of
a,Rncultural land. had to be, as far as possible, paid con1pensation
by
al!o(;ncnt of agricultural land.
By amendment No. XXXIX dated February 1960. the Central Government added an Explanation to rule 49
wl1ich. stated that the expression 'agricultural lan:.l' 1neant agricultural
land situated in a rural area.
The Explanation \Va'5. to be d.ee1ned always
to have been inserted.
On the question whether the Central Government
.had the power to give retrospe.:tivc effect to the Explanation.
HELD : The Central Government acted in. excess of its power in so
far as ir gave retorspective effect to the Explanation to rule 49.
There is no provision in S.40 which, either expressly or by
neces~
sarv iinplication, show that the Central Governn1ent had been vested
with power to make rules with retrospective effect.
The
extent
and
amplitude of the rule making power would depend upon and be g~··zrned
by the lan~ua~e of the section.
An authority vested with the power ot
making subordinate legislation ha,~ to act within the limits of its po\ver
and cannot transgress the same. i.9000]
Cannapore Spinning and Weaving Mills Ltd. '" Collector of Castoms
and Centml Excise, Cochin and Ors. r,1970] 2 S.C.R. 830, B.S. Vadera
ttc. v. Union of India and Others, [.1968] 3 S.C.R. 575 and The Income
Tax Officer. A/leppy v. M. C. Ponnoose and Others etc. [I969J 2 S.C.C.
352, referred to.
The fact that the rules framed under the Act have to be laid before
eac!h f{ouse of Parliament \vould not confer va1idity on a rule if it is
. · made not in confirmitv with S.40 of the Act.
The act of the Central
Government in" Jaying the rules before Parlia1ncnt v.:ou1d not prevent the
·Courts !'rom scrutinizing the validity of the rules and holding thetn to
he 11/!m vires. [9020]
. · .Cr;;;es oo Statute Lpw. Sixth Edition. pp. 304-306 referred to.
· f"()VIL APPELLATE JURISDICTION :
Civil Appeals Nos. 1031,
1094'.--1095 of 1967.
.
'}6J?.PMl by special leave under Article 136 and 133 of the
· • '(:qr;,<;fitti.tion oF India frcm the common judgment dated Septem-
• • tefi 3. 1966 ~ind April 21, 1966 of the Punjab High Com! at
....... ·
.. :_
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HUKAM CHAND v. UNION (Khanna, J.)
897
Delhi (Circuit Bench) in Letter Patent Appeal No. 60-DI Hl65
and Letter Patent Appeal Nos. 59-D/62 and 73-D/65 respectively
and
Civil Appeal No. 177 of 1968.
Appeal by certificate from the judgment and decree dated
April 21, 1966 of the Punjab High Court at Delhi (Circuit
Bench) in Letters Patent Appeal No. 58-D of 1962.
S. K. Mehta, R. A. Gupta. K. R. Nagaraja and M. Qamwwldin, for the appellants (in all the appeals).
L. N. Sinha, Solicitor-General of India, S. P. Nayar
and
B. D. Sharma for the respondents (iiJ. all the appeals).

## Text

896
HUKAM CHAND ETC.
v.
UNION OF INDIA & OTHERS
(with connected appeal)
August 22, 1972
(K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.]
Displaced Persons (Compensation and Rehabilitation)
Act,
1954S.40--Rule making power-Does not confer power to nuike rules retroactively,
Rule making:--Retroactive rule making-Provision for laying on the
-Table 11:ould not prevent courts from deciding rule ultra vires.
Rule 49 of the Displaced Persons (Compensation and Rehabilitation)
Act, 1954, framed in exercise of the powers conferred by S.40 of the
Act, provided that displaced person having verified claim· in respect of
a,Rncultural land. had to be, as far as possible, paid con1pensation
by
al!o(;ncnt of agricultural land.
By amendment No. XXXIX dated February 1960. the Central Government added an Explanation to rule 49
wl1ich. stated that the expression 'agricultural lan:.l' 1neant agricultural
land situated in a rural area.
The Explanation \Va'5. to be d.ee1ned always
to have been inserted.
On the question whether the Central Government
.had the power to give retrospe.:tivc effect to the Explanation.
HELD : The Central Government acted in. excess of its power in so
far as ir gave retorspective effect to the Explanation to rule 49.
There is no provision in S.40 which, either expressly or by
neces~
sarv iinplication, show that the Central Governn1ent had been vested
with power to make rules with retrospective effect.
The
extent
and
amplitude of the rule making power would depend upon and be g~··zrned
by the lan~ua~e of the section.
An authority vested with the power ot
making subordinate legislation ha,~ to act within the limits of its po\ver
and cannot transgress the same. i.9000]
Cannapore Spinning and Weaving Mills Ltd. '" Collector of Castoms
and Centml Excise, Cochin and Ors. r,1970] 2 S.C.R. 830, B.S. Vadera
ttc. v. Union of India and Others, [.1968] 3 S.C.R. 575 and The Income
Tax Officer. A/leppy v. M. C. Ponnoose and Others etc. [I969J 2 S.C.C.
352, referred to.
The fact that the rules framed under the Act have to be laid before
eac!h f{ouse of Parliament \vould not confer va1idity on a rule if it is
. · made not in confirmitv with S.40 of the Act.
The act of the Central
Government in" Jaying the rules before Parlia1ncnt v.:ou1d not prevent the
·Courts !'rom scrutinizing the validity of the rules and holding thetn to
he 11/!m vires. [9020]
. · .Cr;;;es oo Statute Lpw. Sixth Edition. pp. 304-306 referred to.
· f"()VIL APPELLATE JURISDICTION :
Civil Appeals Nos. 1031,
1094'.--1095 of 1967.
.
'}6J?.PMl by special leave under Article 136 and 133 of the
· • '(:qr;,<;fitti.tion oF India frcm the common judgment dated Septem-
• • tefi 3. 1966 ~ind April 21, 1966 of the Punjab High Com! at
....... ·
.. :_
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HUKAM CHAND v. UNION (Khanna, J.)
897
Delhi (Circuit Bench) in Letter Patent Appeal No. 60-DI Hl65
and Letter Patent Appeal Nos. 59-D/62 and 73-D/65 respectively
and
Civil Appeal No. 177 of 1968.
Appeal by certificate from the judgment and decree dated
April 21, 1966 of the Punjab High Court at Delhi (Circuit
Bench) in Letters Patent Appeal No. 58-D of 1962.
S. K. Mehta, R. A. Gupta. K. R. Nagaraja and M. Qamwwldin, for the appellants (in all the appeals).
L. N. Sinha, Solicitor-General of India, S. P. Nayar
and
B. D. Sharma for the respondents (iiJ. all the appeals).
The Judgment of the Court was delivered by
Khanna, J. This judgment would dispose of four appeals
No. 1031, 1094 and 1095 of 1967 and 177 of 1968 which are
directed against the judgments of the
Punjab High Court.
Appeals Nos. 1094 of 1967, 1095 of 1967 and 177 of 1968 have
been filed on certificate of fitness granted by the High .Court, while
appeal N . l 031 of 1967 has been filed by special leave.
The
common question which arises for determination in these four
appeals is whether in exercise of the powers conferred by section
40 of the Displaced Persons (Compensation and Rehabilitation)
Act, 1954 (Act 44of1954) (hereinafter referred to as the Act),
the Central Government could amend rule 49 of the Displaced
Persons (Compensation and Rehabilitation) Rdes, 1955 (hereinafter referred to as the rules) with retrospective effect.
Arguments have been addressed in appeal No. 177 of 1968 and
it is stated that the decision in that appeal would govern the other
appeals also.
Prithvi Chand appellant in appeal No. 177 of 1968 is a displaced person from West Pakistan.
He filed a petition under
article 226 of the Constitution in the High Court on the allegation
that he was the owner of agricultural land and buildings in West
Pakistan. After partition he settled permanently in village Tihar
in the Union Territory of Delhi.
The claim of the appellant was
verified in respect of agricultural land for four standard acres and
9t units.
In November 1953 the Additional Custodian of Evacuee Property (Rural) allotted barani agricultural land measuring
28 bighas and 16 biswas situated in village Tihar to the appellant
and delivered him possession thereof. The appellant claimed to be
in possession of the land since then.
He also claimed to have
spent more than Rs. 3,000/- on effecting improvements on the
land. On July 10, 1959 the settlement Officer-cum-Managing
Officer issued nqtice ~o the appellant stating ,that he was not entitled to the transfer of the land allotted to him as it was included in
8-Ll 72Sup.CI/73
898
SUPREME COURT REPORTS
[1973] 1 S.C.R.
urban limits and was of the value of more than Rs. 10,000/-. The
appellant was called upon to show cause why the allotment of
land, except in respect of one Khasra number valued below
Rs. 10,000/- be not cancelled. The' appellant preferred objections against the proposed action, but his objections were rejected.
The allotment of land was cancelled, except in respect of one
Khasra number, viz. No. 1489, measuring 4 bighas 16 biswas,
which was valued at Rs. 9,680/-. Appeal filed by the appellant
was dismissed by the Assistant Settlement Commissioner on October 21; 1959 on the ground that it was time barred. The appellant then filed a writ petition in the High Court./
The writ petition was dismissed by learned Single Judge on the
ground that the departmental counsel had stated during the course
of arguments that the department was willing to give the benefit
ef the new rules to the appellant. In Letters Patent filed by the
appellant controversy centred on the point as to what was the effect
of the Explanation added to rule 49. Rule 49 ru; it originally
stood read as under :
"49. Compensation normally to be paid in the form
of land.
Except as otherwise provided in this chapter, a displaced person having verified claim in respect of agricultural land shall, as far as possible, be paid compensation by allotment of agricultural land.
Provided that
where any such person wishes to have his claim satisfied
against property other than agricultural land, he may
purchase such property by bidding for. it at an open
auction or by tendering for it and in such a case the
purchase price of the property sqall be adjusted against
the compensation due on this verified claim for agricultural land which shall be converted into cash at the rate
specifi_ed in Rule 56."
In 1960 the following explanation was added to the above rule :
c
"Explanation :-In this rule and in the other rules
of this chapter, the expression 'agricultural land' shall
mean the agricultural land situated in a rural area."
The amendment was given a retrospective effect by providing that
the explanation was to be deemed always to have been inserted :
vide amendment No. XXXIX dated February 11, 1960 made by
the Central Government acting under section 40 of the Act.
The
case set up on behalf of the respondents was that in view of the
Explanation, which incorporated the policy laid down in an earlier
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HUKAM CHAND v. UNION (Khanna, !.)
899
press note, the land which could be allotted under the above . rule
was only rural land and not land situated in urban area. As the
land in dispute was situated in urban area, and was of the value
of more than Rs. 10,000/-, the same, it was submitted, could be
transferred only by means of sale and not by means of allotment.
As against that the contention advanced on behalf of the appellant
was that the Explanation to rule 49. could not be given retrospective effect as the Central Government had 1111 power to amend rule
49 retrospectively.
This contention on behalf of the appellant
did not find favour with the learned judges of the High Court.
Reference in this context was made lll the fact that the rules made
under section 40 of the Act had to be laid under sub-section ( 3)
of that section before each House of Parliament for a period of 30
days for annulment and modification, if so considered proper. In
the result the appeal was dismissed.
Mr. Mehta on behalf of the appellants in the four appeals has
argued in this C0urt that rule 49 could not be amended with retrospective effect and that the Explanation added to the rule could not
operate from a date prior to th<U on which it was added as a result
of amendment made in February 1960. The view taken by the
High Court, according to the learned counsel, was incorrect.
As
against that, the learned Solicitor General has canvassed for fhe
correctness of the view taken by the High Court and has submitted
that the Central Government could give retrospective effect to the
Explanation added to rule 49.
In our opinion, the contention
advanced by Mr. Mehta is well founded.
Rules have been framed by .the Central Government in .exercise of the powers conferred by section 40 of the Act. According
to sub-section ( 1) of that section, the Central Government may,
by notification in the official gazette, make rules to carry out the
purposes of the Act. Sub-section (2) mentions the matters in reapect of which the rules may make provisions without prejudice to
the generality of the power conferred by sub-section (1 ) .
Subsection ( 3) reads as under :
"(3) Every rule made under this section shall be
laid as soon as may be after it is made before each
House of Parliament while it is in session for a period of
thirty days which may be comprised in one oession or
in two successive sessions and if before the expiry of the
se.ssion in which it is so laid or the session immediately
following, both Houses agree in making any modification
in fhe rule, or both Houses agree that the rule should
not be made, the rule shall thereafter hi).ve effect only in
such modified form or be of no effect, as the case may
900
SUPREME COURT REPORTS
[1973] 1 S.C.ll.
be, so however, that any such modification or annulment
shall be without prejudice to the validity of anything
previously done under that rule."
Perusal of section 40 shows that although the power of making
rules to carry out the purpose8 of the Act has been conferred upon
the Central Government, there is no provision in the section which
may either expressly or by necessary implication show that the
Central Government has been vested with power to make rules
with ·retrospective effect.
As it is section 40 of the Act which
empowers the Central Government to make rules, the rules would
have to conform to that section. The extent and amplitude of the
rule making power would depend upon and be governed by the
language of the section. If a particular rule were not to fall within
the ambit and purview of the section, the Central Government in
such an event would have no power to make that rule. Likewise,
if there was nothing in the language of section 40 to empower the
Central Government either expressly or by necessary implication,
to make a rule retroactively, the- Central Government would be
acting in excess of its power jf it gave retrospective effect to any
rule.
The underlying principle is that unlike Sovereign Legislature which has power to enact laws with retrospective operation,
authority vested with the power of making subordinate legislation
has to act within the limits of its power and cannot transgress the
same.-
The initial difference between subordinate legislation and
the statute laws lie.s in the fact that a subordinate law making body
is bound by the terms of its delegated or derived authority and
that court of law, as a general rule, will not give effect to the rules,
thus made, unless satisfied that all the conditions precedent to the
validity of the rules have been fulfilled (see Craies on Statute Law,
p. 297 Sixth Edition).
The learned Solicitor General has not been able to refer to
anything in section 40 from w\lich power of t!le Central Government to make retrospective rules may be inferred. In the absence
of any such power, the Central Government, in our view, acted in
excess of its power in so far as it gave retrospective effect to the
Explanation to ·rule 49. The Explanation, in our opinion, could
not operate retrospectively and would be effective for the future
from the date it was added in February 1960.
In the case of Cannapore Spinning and Weaving Mills Ltd. v.
Collector of Customs and CentraJ' Excise, Cochin and Ors. (1)
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this Court dealt with an explanation which had been added by the .
Central Government in purported exe;rcise of the power vested
11
under the Central Excise and Salt Act, 1944. Question arose
(I) [1970) 2 S.C.R. 830
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HUKAM CHAND v. UNION (Khanna, J.)
901
whether the explanation had a retrospective effect.
The Court
referred in this context to the rule making power of the Central
Government under the aforesaid Act and observed :
_"Dr. Seiyed Muhammad, learned Counsel for the
department did not support the impugned demand on the
basis of the retrospective effect purported to have been
given to the explanation referred to earlier by the notification dated February 16, 1963 (Exh. P-12) for obvious
reasons. The rule making authority had not been vested
with the power under the Central Excise and Salt Act to
make rules with retrospective effect.
Therefore the
retrospective effect purported to be given under Exh.
P-12 was beyond the powers of the rule making
authority."
In the case of The Income Tax Officer, Alleppy v. M. C.
Ponrwose and Others etc.( 1) this Court dealt with a notification
dated August 14, 1963 which empowered the revenue officials,
including the Tehsildar, to exercise the powers of a tax recovery
officer undel' the Income Tax Act, 1961 in respect of arrears. The
notification was given retrospective effect. · Question which arose
for determination was whether the State Government could invest
the Tehsildar with such powers retrospectively.
Answering this
question in the negative, this Court observed :
"The Parliament can delegate its legislative power
within -the recognised linlits.
Where any rule or regulation is made by any person or authority to whom such
powers _have been delegated by the Legislature it may or
may not be possible to make the same so as to give retrospective operation.
It will depend on the language
employed in the statutory provision which may in
express terms or by necessary implication empower the
authority concerned to make a rule or regulation with
retrospective effect.
But where no such language is to
be found it has been held by the courts that the persons
or authority exercising sμbordinate legislative functions
cann~t make a rule, regulation or bye-law which can
operate with retrospective effect."
Reference was made in the above cited cas:: to an earlier decision
of this Court in B. S. Vadera etc. v. Union of India & Others(')
wherein it had been observed with reference to rules framed under
the proviso to article 309 of the Constitution that those rules
could be made with retrospective operation.
V adera's case was
distinguished on the ground that the view expressed therein was
(I) (1969] 2 S.C.R. 3S2.
(2) [19681 3 S.C. R. S75.
902
SUPREME COURT REPORTS
[1973] l S.C.R.
based upon the language employed in the proviso to article 309
that any rules so made shall have effect subject to the provisions
of any such Act. It was also observed :
"As the Legislature can legislate prospectively as well
as retrospectively there Gan be hardly any justification for
saying that the President or the Governor should not be
able to make rules in the same manner so as to give them
prospective as well as retrospective operation.
For these
reasons the ambit and content of the rule making power
under article 309 can furnish no analogy or parallel to
the present case."
We are, therefore, of the opinion that the Explanation added
to rule 49 in the present case cilTu"J.ot be-given retrospective operation.
The fact that the rules framed under the Act have to be laid
before each House of Parliament would not confer validity on a
rul~ if it fo made not in conformity with section 40 of the Act.
It would appear from the observations on pages 304 to 306 of th~
Sixth Edition of Craies on Statute Law that there are three kinds
of laying:
(i) Laying without further procedure :
(ii) Laying subject to negative resolution :
(iii) Laying subject to affirmative resolution.
The !aying referred to in sub-section ( 3) of section 40 is of the
second category because the above sub-section contemplates that
the rules would have effect unless modified or annulled by' the
Houses of Parliament. The act of the Central Government in laying the rules before each House of Parliament would not, how~ver,
prevent the courts from scrutinising the validity of the rules and
holding them to be ultra vires if on such scrutiny the rules are
f1mnd to be beyond the rule making power of the Central Government.
It has also been submitted by the learned Solicitor General that
in case this Court finds that the Explanation. to rule 49 could not
be given retrospective effect, the appeals may be allowed· and the
impugned orders about the cancellation of the al!Otrnent in favour
of the appellants may be set aside. It has also been stated that
this Court need not go in these appeals into the question as to
whether the allotment in favour of the appellants could be cancelled under some other provision of law.
We accordingly accept the appeal, set aside the judgment of
the High Court and quash the orc!er relating to the cancellation
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HUKAM CHAND v. UNION (Khanna, J.)
903
of allotment of the lands in dispute in favour of lhe appellants.
The appellants shall be entitled to costs of this Court as well as
those incurred in the High Court.
One hearing fee.
Court fee
in appeal No. 177 of 1968 should be realised from the appellants
in that appeal.
K.B.N.
Appeal allowed.