HUKAM CHAND ETC v. UNION OF INDIA & Ors.

Prithvi Chand appellant in appeal No. 177 of 1968 is a dis placed 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 Eva cuee 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 entitl ed to the transfer of the land allotted to him as it was included in 8-Ll 72Sup.CI/73 c D F G H 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 objec tions 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 Octo ber 21; 1959 on the ground that it was time barred. The appel lant 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 it originally of the Explanation added to rule 49.

Rule 49 ru; stood read as under : "49. Compensation normally to be paid in the form of land. Except as otherwise provided in this chapter, a dis placed person having verified claim in respect of agri cultural land shall, as far as possible, be paid compen sation 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 agricul tural land which shall be converted into cash at the rate specifi_ed in Rule 56." A B c D E F 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.

" G ' 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 H A B c D E F G H 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 retrospec tive 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 In days for annulment and modification, if so considered proper. 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 retros pective 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. the contention advanced by Mr.

Mehta is well founded. In our opinion, Rules have been framed by .the Central Government in .exer cise 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 rea pect of which the rules may make provisions without prejudice to (1 ) . Sub the generality of the power conferred by sub-section section ( 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 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 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 Legisla- ture 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 Govern ment 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. A B c D E F G In the case of Cannapore Spinning and Weaving Mills Ltd. v. Collector of Customs and CentraJ' Excise, Cochin and Ors. (1) this Court dealt with an explanation which had been added by the . Central Government in purported exe; rcise of the power vested under the Central Excise and Salt Act, 1944. Question arose 11 (I) [1970) 2 S.C.R. 830 A B c D E F G H 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 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 notifi cation 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 purported to be given under Exh. P-12 was beyond the powers of rule making authority. " retrospective effect. Therefore 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 question in the negative, this Court observed : "The Parliament can delegate its legislative power within -the recognised linlits.

Where any rule or regu lation 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 re trospective operation. It will depend on the language employed in the statutory provision which may 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 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 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 opera tion. 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' Houses of Parliament. The act of the Central Government in lay ing 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 Govern ment. A B c D E F 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 It has also been stated that of the appellants may be set aside. this Court need not go in these appeals into the question as whether the allotment in favour of the appellants could be can celled under some other provision of law.

G H We accordingly accept the appeal, set aside the judgment of the High Court and quash the orc!er relating to the cancellation 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. A B