# M. L. MANCHANDA & ORS v. UNION TERRITORY OF CHANDIGARH & ORS - **Citation:** [1977] 3 S.C.R. 327 - **Court:** Supreme Court of India - **Decided:** 1975-04-28 - **Case number:** Civil Appeal No. 1744 of 1976 - **Bench:** V. R. Krishna Iyer, Jaswant Singh - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-l-manchanda-ors-v-union-territory-of-chandigarh-ors-7223 - **Pages:** 7 ## Headnote Punjab. Industrial Housing Rules, 1972, R.4(3), whether ultra vires the Punjab Industrial Housing Act, 1956-Whetlur operates retrospectively. A B The appellants and respondents Nos. 3 tQ 37 herein, were allottees of house3 in Chandigarh constructed by the State Government for low paid industrial C workers under the Industrial Housing Scheme subsidised by the Central Government. The Labour Inspector, Union Territciry, Chandigarh gave them notices i.n terms of the proviso to rule· 4(3) of the Punjab Industrial Housirfg Rules, 1956, as' amended vide Notification dated November 7, 1972, to show cause why their allotments should not be cancelled. The income· of each of them exceeded Rs. 350/ - per mensem, which disentitled them to retain their allotments. The appellants and the· said respondents filed a joint petition in the High Court for a writ to quash the amendment to rule 4, and to restrain the Government from cancelling their allotments and evicting them. The writ petiD tion was dismissed. The appellants contended firstly, that rule 4(3) was ultra vires the Punjab Industrial Housing Act, 1956 as it took out industrial workers with income exceeding Rs. 350/- p.m. from the scope of section 2(e) of the Act which defines industrial workers; and secondly, that the authority competent to make. rules u/s. 24 of the- Act cannot frame rules having retrospective effect, and as the amended rule- 4(3) operates retrospectively it is invalid. Dismissing the appeal by special leave, the Court, E HELD: ( 1) The allotment of accommodation to an industrial worker is not unconditional but is subject to conditions which can be changed unilatera1ly by the Government from time to thne by altering the rules in exercise' of the powers conferred on it under section 24 of the Act. Section 24 specifically emF powers the State Government to make rules to provide inter aliaJor the manner of allotment of accommodation and conditions relating to its occupation. The impugned amendment which squarely falls within the purview of the aforesaid provisions of section 24, was validly made, and was not ultra vires. [331 G~H. 331 (a)·Cl (2) Section 7 of the Act embodies a deeming provision and gives a mandate to treat a person as an unauthorised occupant not only if he ceases to be an industrial worke·r under the Act, but also if being an allotteo, he ceases tOi fulfil any ?f the .Pr~scribed conditions then in force, including the one relating to the hm1t of his rncome, and thereby becomes amenable to action under section 9(2) of the Act. [33J(a)·A·B] G (3) The proviso to rule 4(3) clearly shows that the allotment of an indus· trial ':vorker whose income exceeds Rs. 350/- per mensem is to stand cancelled not from the date whe11 his income started exceeding Rs. 350 /· per mensem H but ~n the expiry of one month's notiee in writing of the cancellation. The rule IS not mtended to operate retrospectively on industrial workep!'llants and the aforesaid respondents thereupon filed a joint writ petition, being writ petition No. 1819 of 1975 under Articles 226 and 227 of the Constitution in the High Court of Punjab and Haryana for issue of an appropriate writ, order or direction quashing the said notices and notification No. 7480-4H(8)-72/21542 da!ed November 7, 1972 amending Rule 4 of the Rules and restraining respondents I and 2 from proceeding with the cancellation of their respective allotments and evictmg them from the houses. They contended that the aforesaid rule 4 as amended was ultra vires the Act ln so far as it carved out an exception to the statutory definition of 'industrial worker' as contained in section 2 ( e) of the Act within the scope of which they admittedly fell. The High Court repelled their contention and dismissed their writ petition by its judgment dated April 28, 1975. Aggrieved by this judgment and order, the appellants and the said respondents made an application to the High Court for issue of a certificate of fitness under Article 133 of the Constitution which was refused by the High Court by its order dated May 9, 1975. Thereupon they moved this Conrt for special leave under Article 136 of the Conslitution which wa's granted. ' • M. L. MANCllANDA v. u. T. OF CHANDIGARH (Jaswant Singh, J.) 331 Appearing in support of the appeal, Mr. Ramamurthy has reiterated before us that since the appellants and respondents 3 to 3 7 are admittedly industrial workers as defined in clause ( e) of section 2 of the Act, the impugned rule 4 which is designed to cancel their allotment, on the ground that their salary exceeded Rs. 350/- per mensem i's clearly repupant to that clause and as such utra vires and invalid as it takes out industrial workers with income exceeding Rs. 350/- per mensem from the scope of the definition. He has further ,contended that since the authority competent to make rules under section 24 of the Act cannot frame any rule having a retrospective effect and the impugned rule-rule 4(3) as amended operates retrospectively, the same is invalid. He ha·s lastly urged that the impugned notification is also invalid as it makes hostile and arbitrary discrimination against industrial workers whose income exceeds Rs. 350/- per mense.m, and thereby violates the guarantee enshrined in Article 14 of the Constitution. We shall deal seriatim with all the three contentions raised by Mr. Ramamurthy. Before embarking on that task, we consider it appropriate to scan the scheme of the Act. Section 3 of the Act clearly states that the Act shall be applicable to houses constructed by the State Government for the occupation of industrial workers under the Industrial Housing Scheme subsidised by the Central Government. The scheme, as evident from the affidavit of the Home Secretary, Chandigarh Government, is meant for the benefit of the low aid industrial workers and economically weaker sections of the community. Section 9(1) of the Act provides that the occupation by any person of a house shall at all times be subject to such conditions relating to its occupation as may be prescribed, or as may be intimated from time to time by the Labour Commissioner. Section 7 of the Act sets out the circumstances in which a person shall be treated to be in unauthorised occupation of any house. Clause (b) of the section explicity states that a person shall be deemed to be in unauthorised occupation "where being an allottee he has by reason of cancellation of an allotment under sub-section (2) of section 9 ceased to be entitled to occupy the house". Sub-section (2) of section 9, which is necessary to be referred to at this stage and which because of the rwn-obstante clause contained in its opening part overrides all other laws for the time being in force, authorises the Labour Commissioner after giving notice to the allottee and considering the explanation tendered by him to cancel the allotment under which a house is held or occupied by him. Section 24 of the Act not only empowers the State Government generally to make rules to effectuate the purposes of the Act but also specifically confers on it the power to make rules to provide inter alia for the manner of allotment of accommodation and conditions relating to its occupation [see section 24(2)(ii)] as also for the matters which are to be or may be prescribed [see section 24(2)(x)]. A conspectus of the aforesaid provisions of the Act leaves no room for doubt that the allotment of accommodation to an industrial worker is not unconditional but is subject to conditions wbich can be changed unilaterally by the Government from time to time by altering the rules in exercise of the powers conferred on it A B c D E F G H A B c D E F G H 331(a) SUPREME COURT REPORTS [1977] 3 S.C.R. under section 24 of the Act. Se<:tion 7 of the Act which embodies a deeming provision gives a mandate to treat a person as an unauthorised occupant not only if he ceases to be an industrial worker under the Act but also if being an allottee, he ceases to be entitled to eccupy the accommodation by reason of cancellation of the allotment under sub-section (2) of section 9 of the Act. A combined reading of se<:- tioru; 7 and 9 of the Act goes to show that if at any time a person be<:omes an unauthorised occupant of the house by reason of his ceasing to be an industrial worker or by otherwise ceasing to fulfil any of the prescribed conditions then in force including the one relating to the limit of his income, he becomes amenable to action under se<:tion 9(2) of the Act. The result is that even though the allotree may continue to be an industrial worker, still the allotment under which he holds a house can be cancelled if his occupation becomes nn· authorised on any one of the grounds laid down in section 7 of the Act. We are, therefore, satisfied that the impugned amendment which squarely falls within the purview of the aforesaid provisions of · section 24 of the Act was validly made and the contention urged by Mr. Ramamurthy that it is ultra vires is misconceived and untenable. We may state here in passing that the aforesaid scheme being meant for the benefit of the low paid industrial workers and the number of the houses constructed thereunder being very limited, the Government cauld legitimately evolve the method which it did to disentitlc industrial workers like the appellants whose monthly salaries appear to range between Rs. 974.71 and Rs. 186L27 and the aforesaid respondents whose monthly income is also relatively large to retain the houses in question. The contention of Mr. Ramamurthi that the impugned rule is retroactive in operation is also devoid of merit. A careful study of the proviso to rule 4(3) of the Rules which appears to have been inserted to allay fears and remove misapprehensions would show that the rule is not intended to operate retrospe<:tively on industrial workers who had been allotted and were in occupation of industrial houses immediately before the amendment of the Punjab Industrial Housing (Chandigarh First Amendment) Rules, 1972. It unequivocally states that allotment of an industrial worker who is in occupation of an industrial house in pursuance thereof immediately before the amendment of the Punjab Industrial Housing (Chandigarh First Amendment) Rules, 1972 shall not be cancelled without one month's notiee in writing. The proviso therefore clearly shows that the allotment of an industrial worker whose income exceeds Rs. 350/- per mensem is to stand cancelled not from the date when his income started exceeding Rs. 350/- per mensem but on the expiry of one month's notice in writing of the cancellation. The second contention raised by Mr. Ramamuithi is also, therefore, repelled. The third contention advanced by the learned counsel on behalf of the appellants not having been raised before the High Court cannot be permitted to be raised at this stage. The contention can also not be allowed to be raised in view of the Presidential Order dated June 27, ' • M. L. MANCHANDA v. u. T. OF CHANDIGARH (Jaswant Singh, J.) 33 I(b) 1975 promulgated under clause (1) of Art. 359 of the Constitution suspending inter alia Article 14 of the Constitution for the period during which the proclam<1tion of emergency made under clause ( l) of Article 352 of the Constitution on December 3, 1971 and on June 25, 1975 are both in force. A For the foregoing reasons, we do not find any merit in this appeal which is dismissed but in the circumstances of the case without any order a as to costs. Counsel for the appellants submits that he may be given time for vacating thei premises. We grant time till 31st August 1977 on the undertaking given by the counsel that vacant possession will be given on or before \hat date. M.R . Appeal dismissed.