RAGHUNATH GOPAL MANJIRE & Anr. v. THE COMPETENT AUTHORITY & Ors.

At the outset we may state the necessary facts in relation to two appellants-Shri R. C. Manjire and Shri A. L. Raghavan Nair, appellants 1 and 2 respectively. Although the said two appellants had purported to file the writ petition and the writ appeal in the High Court on behalf of themselves and other industrial worker tenants of tl]e Board residing in Tilak Nagar; Chembur, Bombay, and they pur ported to follow up the matter by filing the special leave petition in a I A B 196 SUPREME COURT REPORTS [1978) 2 S.C.R. representative capacity, the appeal was, however, argued, as it appears. due to non-compliance of some stay order passed by this Courtby the other workers, as if it was an appeal by the said two appellants only. Any way that will not be of any material consequence because our de cision in this appeal, obviously, will govern the rights and liabilities of the other industrial workers similarly situated. The first appellant who was an industrial worker employed with Premier Automobiles Ltd., Kurla was allotted tenement No. 54/1916 as per the tenancy agreement dated the 19th January, 1959, executed in Form II appended to the Regulations. The subsidised rent fixed was Rs. 27 /- per month plus the monthly service charges of Rs. 6/-. Similarly appellant no. 2 who was an industrial worker employed with tenement no. 26/921 in Indian Rare Earths Limited was allotted Tilak Nagar at the same subsidised rent of Rs. 27 /- per month plu~ the monthly Eervice charges of Rs. 7.50. The allotment to him was also made sometime in the. year 1959 on the basis of a similar agree .. Such allotments are said to have been made in respect · of ment. about 4,000 tenents. · A notice dated the 10th of October, 1972 was given to appellant no. 2 by the Board stating therein : "Tenements constructed under the Subsidised Industrial Housing Scheme are allotted to the Industrial Worker whose monthly income does not exceed Rs. 350/- on payment of Those who have crossed the wage subsidised rent only. limit of Rs. 350/- p.m. subsequently are not entitled to re tain the tenements, nor are they entitled to get subsidy rent. The question of eviction of workers who had crossed the prescribed wage limit of Rs. 350/- p.m. has been consi dered sympathetically and the Government have been oleased to order that such tenants who have exceeded wage limit Rs. 350/- should be allowed to retain the tenements chargiug them graded increase w.e.f. 20.4.66 as, under : - -i-. ( 1) Wage group of workers between Rs. 351/- to Rs. 425/- p.m. 40% of tl)e interest charges on the subsidy for construc tion of the house. (2) Wage group of workers between 80% -do-- Rs. 426/- to Rs. 500/- p.m. JI (3) Persons who are exceeding the limit of Rs. shall be charged full economic rent. 500/- (4) In partial modification of the above, the Government have been pleased to charge w.~.f. 26.11.59 sq.% of the interest charges on the subsidy for construction tenants whose ol the house from industrial worker RAGHUNATH v. COMPETENT AUTHORITY (Untwalia,· !.) 197 monthly/income is in the range of Rs. 350/- to Rs. 500/-. (5) On enquiry from your employers M/s Indian Rare Earths Ltd. · it is learnt that your income exceeded Rs. 350/- p.m. w.e.f. 1.11.67. You are as such allowed to avail the concession to pay the subsidised rent for 3 months from that date, and you are liable to be charged graded rent from 1.2.68. In view of the above orders of the Government, you have been :assessed graded rent/economic rent as detailed below : -

#1. Income between Rs. 350/- to Rs. 425/- from = Rs. 48.00

1.2.68 to 30.4.69 @ 40% i. e. Rs. 3.20 p.m.

#2. Income between Rs. 425/- 1.5.69 to 30.9.69 @ 80% i.e. Rs. 6.40 p.m . and 500 from = Rs. 32.00 • :3. Income between above Rs. 500/- from 1-10-69 to 30-6-72 (Diff, between as per standard E.C. and eco. rent dt. 6-12-71 & @SQ% 27.02 = Rs. 891.66 23.11.71 Total Rs. 971.66 The total amount thus payable by you for the period from 1.2.68 to 30.6.72 works out to Rs. 971.66; you are reque$led to pay the above arrears within JO days.from the date of issue of this letter. · be presumed that you are not accepting the You are further advised to start paying rent from 1.7.72 onward at increased rate of Rs. 55.68 p.m. inclusive of ser vice charges as your monthly income is in the range of Rs. 351/- to 425, 426 to Rs. 500/- and above Rs. 500/- p.m. If you fail to pay the increased amount as intimated, it will increase and are not interested to retain the tenement and further action as permissible will be pursued to effect the· recovery of amount and to take vacant possession of the tenement from you." A similar notice dated the 30th January, 1973 was given to appel- 1ant no. 1 stating therein that in his case the income limit had exceeded -prior to 20.4.66 and he was liable to be charged graded rent w.e.f. that date. Accordingly arrears of rent to the tune of Rs. 2,154,91 were <lemanded from him for the period 20.4.66 to 31.12.72 and he was ask-· ed to pay on and from 1st of January, 73 an increasedrate of rent of Rs. 56.26 per month inclusive of service charges. The appellants filed a writ petition in the High. Court challenging ·the enhanced demand of rent from them both for the past and the future A B c D E F G H A B c D E F G H 198 SUPREME COURT REPORTS (1978] 2 S.C.R. periods. Their writ petition was dismissed by a learned Single Judge of the High Court and their writ appeal failed before the Di1·ision Bench in view of another Division Bench decision of the Hi2h Court . given a few months earlier in an identical matter in the case-of some other industrial workers. Hence this appeal in which the only ques tion to be decided is about the demand for the arrears of enhanced rent. Regulation 3 says : "All residential tenements constructed or reconditioned under the Housing Programme approved by the Government shall be classified in accordance with Government's directions into (i) those exclusively reserved for Industrial Workers. and (ii) those open to the general public for the low income groups (including Industrial Wcrkers.)" The relevant portion of Regulation 4 runs thus :--· "Tenements in class (i) shall be let at such subsi dised rents as Government may, by special orders fix, while tenements in class (ii) shall be let at the economic rent cal culated in accordance with the formula decided by Govern ment from time to time." • Eligibility for the unreserved tenements as per Regulation 6 was. limited by the maximum total income of all the earning 1nen1 bers of the applicant's family proposing to lodge together. As per Regula tion 7 "the maximum limit of family income in relation to subsidised rents shall be Rs. 350/- per mensem and .in relation to economic rent Rs. 5\lO/- per mensem." In accordance with Regulation 19 the successful applicants were required to execute an agreement in Form II appended to the Regulations. As already stated, the two ~ppellants executed the agreement in Fann II and over and above that on date of the execution of the agreement also gave an nndertaking writing which to all intents and purposes fonns part of the agreement. It may, in passing, be stated here that some forms of undertaking are also appended to the Regulations but the relevant undertaking with which we are concerned in this appeal was of a different nature, yet undoubtedly was binding on the appellants. We may refer to some relevant clauses of the agreement executed' by the appellants. They are : - "2. To pay such increase in the said monthly rent and other charges as the Board may consider it fit or expedient to impose on acccunt of any increase in such rates, taxes cesses or other service charges or on account of any additions and/or alterations to or any conveniences provided at the said premises or the building in which tl1e same are situate.

#17. The tenancy will be terminable by either side giving; to the other, one clear calender month's notice ....... . RAGHUNATH v. COMPETENT AUTHORITY (Untwalia, J.) 199 J 6-A. As the said premises have been let out to me at a subsi- dised rent by reason o! my being an Industrial worker governed by the factory act 1948 the tenancy shall cease forthwith as soon as I cease industrial worker. to be an B. In June and December every year necessarily and at any other time if and when required by the Board I shall supply a certificate that I continue to be an Indus trial worker and other detailed information about the total monthly income i.e. pay, allowances etc. of my~elf and all the earning members of family residing with me together with necessary certificates from the respective employers of each such earning member.

#20. The tenancy shall be subject to the provisions of the Maharashtra Housing Board Act, 1948 and the Rules, Regulations and bye-laws thereunder for the time being in force. ,

#22. I agree that the undertakings in the application form and other undertakings signed by me this day and attached to the Tenancy Agreement forn1 part of this tenancy agreement." The relevant words of the undertakin~ read as follows :-- "This is to record that I. R. G. Manjire have been allot ted by the Maharashtra Housing Board tenement No. 1916 in Block No. 54 at Government Housing Colony, Chemhur with effect from 9.1.59 by virtue of my being an Industrial Worker and that the subsidised rent for the above wnement inclusive of service charges has been provisionally fixed at Rs. 27 /- per month and the service charges have also been provisionally fixed at Rs. 6/- per month and are liable to be I record that I have agreed and undertaken to increased. a.nd pay the rent and service charges including water tax other charges as may be from time to time be levied and/or fixed by or on behalf of the Board to accept its decisio!l--as fin&! and binding. I have also agreed and bound myself to pay lo the Board the excess being the difference between the present and the revised rate of rent and service charges from the date of allotment on receipt of such intimation from or on behalf of the Estate Manager, Maharashtra Housing Board, Bonibay and to accept the revised rate of rent and ser- vice charges for the future as well." A B C D E F G Intitially the question which was canvassed before us and falls for our determination is whether the Board was entitled to charge enhanc- ed rent as per the terms of the Regulations, the agreement and undertaking on the ground that on the crossing of the wage mentjoned in Regulation 7 the tenant became liable to pay enhanced H rent as soon as he crossed the maximum wage limit. The High Court has taken the view that the Regulations are not statutory Regulations and have not the force as such. But this seems to be contrary to the ;-i 200 SUPREME COURT REPORTS (1978) 2 S.C.R. A B c D E F G decision of this Court in Sukhdev Singh & Ors. v. Bhagatram Sardar Singh Raghuvanshi and anr. (') For the decision of the point at issue, however, it will not make any difference. No Regulation clear ly provides the effect of crossing the maximum limit of family income. As per R•~gulation 4 tenements in class (i) or in cfass (ii) can be let out at such subsidised rents as Government may by special orders fix or at the economic rent calculated in accordance with the formula decided by Government from time to time. Different subsidised rents. reducing or enhancing the amount of subsidy can be fixed by the Government from time to time. But one thing is clear, even in absense of any specific Regulation in that regard, that on the crossing of the maximum wage limit, the industrial worker shall not be entitled continue in the tenement let out to him on the subsidised rent fixed on the basis of the income limit as per Regulation 7. Out of the conse quences mentioned hereinafter, either one or the other may follow. He may cease to be a tenant unless and until the tenement is allotted him on the basis of the increased wage limit or he may be liable pay the economic rent or full economic rent on the crossing of the wage limit. Even assuming that this result does not automaticaJ!y follow, on the general principles of law in absence of a clear Regula tion being there, the tenancy could be terminated by one months' notice as per clause (17) of the agreement. The terms cf the agreement and the undertaking are also ambiguous and not clear enough to entitle the Board to clain1 enhanced rent from an industrial worker on his. cro; sing the particular wage -limit. The terms are capable of an interpretation which may be favourable either to the Board or to the industrial worker. The High Court has interpreted them in favour of the fonner. Although we are not prepared to say that the interpretation' put by the High Court is necessarily wrong, because of the ambiguity of the language, as we shall presently show, we do not propose to rest our judg ment on such interpretation of the terms only. agreement is concerned with increase in the monthly rent and other charges as the Board may consider fit or expedient to impose "on acconnt of any increftSe in such rates, taxes cesses or other service charges or an account of any additions and/or alterations to or any con veniences provided at the said premises or the building in which t'1e same are situate." The said clause does not'cover a ca'se of incr~ase of rent by rednction of snbsidy on the ground of increase in the wage limit. Clause (18-A) provides that the tenancy shall cease as soon as the tenant ceases to be an industrial worker. But then clanse (18-B) requires him to ¢ve certain information including a detailed information about his total monthly family income. The purpose of this requirement obvionsly is to find out whether a particular industrial worker .has crossed the wage limit, if so, when. Yet, as a follow up action, no clear clause is to be fonnd in the agreement providing for rednction of subsidy and increase of rent on the crossing of a particular wage limit. Clause (2) of H Similarly the phraseology of the undertaking which we have extrac ted above is also too vagne and ambignous to enable us to say tl'lat that (I) [1975] 3 S,C.R. 619. RAGHUNATH v. COMPETENT AUTHORITY (Untwalia, J.) 201 that the It is no doubt true that the undertaking mentions by itself can undoubtedly lead to the conclusion that the Board could A enhance the rent on the crossing of the wage limit by an industrial worker. the rent fixed was provisional and that the worker undertook to· pay the rent and service charges as may from time to time be levied and fixed by and on behalf of the Board. But in the sentence following the said words the use of the expression "date. of allotment" created the difficulty in our straightaway 6Ccepting the interpretation put by , B the High Court as correct. ·wordiilgs in It appears to us the undertaking .are capable of the meaning that the ?ubsidised rent It could he incre~ed and originally fixed was a provisional one. enhanced by the Board even from the date of allotment and· the indust- rial worker would be liable to pay the same. But we remained curious to know as to why a clear provision was not made either in the Regu lations or in the agreement and the undertaking to say, as obviously it C could be done, as to what will be the consequences which would follow when an industrial worker crossed the maximum wage limit. Mr. Sanghi for the appellants and M/s S. T. Desai and V. S. Desai for the respondents Board and State of Maharashtra endeavoured to put inter pretatioos which were favourable to their respective clients. But reel- ing some difficulty in accepting either of the two rival contentions to our satisfaction. we proceeded to examine further the additional sub- D missions made on behalf of the Board. Aud that to our mind put the matter beyond any doubt. Our attention was drawn to letter No. 5/24/62-HI dated the 20th April, 1966 written by the Government of India, Ministry of Works, Housing and Urban Development to the Housing Secretaries of Governments drawing their attention to the earlier letter dated the. 19th January, 1966 of the Government of India, the relevant portion of which says- "that the recommendation of the Housing Minister's Con- ference held at Chandigarh in December, 1964, regarding retention of houses built under the subsidized Industrial Hous- ing Scheme by allottees on their crossing the wage-limit of Rs. 350/- per moilth, has been considered fu~her by the Government of India and the following decisions have been taken.:- (i) An eligible worker, so long as be remains as industrial worker, may be allowed to retain the house allotted to him even after crossing the prescribed wage limit of Rs. 350/- p.m. till he reaches the wage limit Rs. 500/- p.m. (ii) No worker· who has crossed the wage limit of Rs. 500/- p.m. should be allowed to retain the house from the date his wages exceed the above mentioned limit. (iii) Workers, who cross the wage limit of Rs. 350/- p.m. should not be allowed to retain the houses on the full E ' F G H \ ~. ~ ' " • l. --"L.. .,..:) 202 SUPREME COURT REPORTS [1978] 2 S.C.ll. .A :n In their case the element of subsidy subsidized rent. in rent should be gradually reduced and they should be required to pay additional charges over and above the subsidized rent, as follows::- Wage Group of Workers A dditiom1l charge!· \!) Rs. o~l/- to KS. 4Lj; p.m. (2) Rs. 426/- to Rs. 500/ p.m. the interest 40% & 80/'o of charges on construction of the house res pectively. the subsidy Paragraphs (3) and (5) of the letter dated the 20th of April, 1966 state further as follows : "(3) These workers, who having crossed the wage limit of Rs. 350/- p.m. are entitled to pay subsidized rent for in accordance with the ·a period of three months instructions contained in this Ministry's letter No. 5/1/164-HI, dated the 30th April, 1964, may be allowed to avail of this concession for the above mentioned period of three months only and thereafter they will be required to pay additional charges as indi cated in sub-para 1 (iii) above. (5) The State Governments are requested to take further action in pursuance of the above decision." Pursuant to the letter aforesaid the State Government wrote to the Board, a letter dated the 8th July, 1967 stating therein :-- .E F G H It was however pointed out by the "I am directed to state that tenements constructed under the Subsidized Industrial Housing Scheme ar'~ allotted to industrial Workers whose monthly income does not exceed Rs. 350/-. Accountant industrial General, Maharashtra, Bombay, workers who had crossed the income limit of Rs. 350 1- ner ·In month were being charged subsidized rent by the Board. the absence of any clear and specific provisions it was all along assumed that the income limit laid down under the Scheme is to be enforced only at the time of initial allotment. that certain

#2. The question of eviction of workers who had crossed the prescribed wage limit of Rs. 350/- per month was discus sed in the 8th Housing Minister Conference held at Chandi garh in December, 1964 and as a result the Government of lndia have directed the State Government to take action in pursuance of the decision contained in letter No. 5 /24/62/HI, dated the 20th April. 1966 (copy cnciosed).

#3. The instructions contained in the Government India's letter referred to above. have been examined and it has now been decided by Government as follows : - ( i) The industrial workers who have crossed the wage limit of Rs. 350/- but whose wages do not exceed • ' _J RAGHUNATH v. COMPETENT AUTHORITY (Untwalia, !.) 203 Rs. 500/- should be charged additional rent over arid above the subsidized rent in accordance with the decisions contained in the Government of fodia le.tter from the said date, as follows, after giving them \]ue notices as required under the Regnlations. ;wage group of workers Additional charges <(1) Rs. 351/- to Rs. 425/- per month .(2) Rs. 426/- to Rs. 500/- per month interest 40% & 80% of the charges on construction of the house, res- p~ctively." subsidy (ii) The industrial workers who have crossed income limit of Rs. 500/- p.m. on 20th April, 1966, or from a subsequent date, should be charged economic rent from this date. Arrangements may however, be made to provide them accommodation under the Middle Income Group Housing Scheme, to the extent possible and in. the event of their refusing to pay economic rent or agreeing to shift to the tenements provided for them under the Middle Income Group Housing Schm1e, necessary steps for eviction should be taken." It appears pursuant to the direction of the State Government con tained in their letter dated the 8th July, 1967, notices started being given to the various industrial workers. Of course, the notices which were given to the appellants were after great delay of about more than ·five years. Nonetheless the demand made in the notice is in accor dance with the said direction of the State Government. Section 73A of the Act provides : - "The State Government may give the Board such direc tions as in its opinion are necessary or expedient for carry ing out the purposes of this Act. It shaU be the duty of the Board to comply with such directions." in uo sense either contrary It is manife1,t that the directions given by the State Gover!l'tnent in their letter dated the 8th July, 1967 would be squarely covered the provision of law aforesaid and the Board was obliged to comply with it. The direction was Regulations or to the terms of the agreement and the undertaking. On the other hand, it was for the purpose of removing the ambiguitv which had remained in them. It was quite fair and reasonable to rc<luce the subsidy and demand the enhanced or the economic rent, as the case may be, on the crossing of a particular wage limit. Appellant no. I had crossed that wage limit before the 20th of April, 1966. Demand of enhanced rent on and from that date was in no way contrarv to the law, the Regulations and the tertns of the agreement and the under taking. It was within the power of the State Government to ~ive the direction charging the enhanced rent from a back period as and when. the maximum wage limit liad been· crossed by a particular industrial worker, of course, giving him the concession of three month~ period. A B c D E F G II \ 204 SUPREME COURT REPORTS [1978] 2 S.C.R. A B Mr. Sanghi's contention that no demand for enhanced rent or economic rent in respect of a period prior to the giving to the notice could Lt must be be made is not sound and hence not acceptable to us. emphasised, as we have already indicated above, that the industrial worke:r was not entitled to insist to continue in the tenancy on a parti cular subsidized concessional rate of rent which had been initially fixed on the basis of his being below the wage limit of Rs. 350/- per month in relation to his family income. ) For the reasons stated above, we affirm the decision of the High Court althongh on a somewhat different basis and dismiss this appeal. In the circumstances, however, we shall make no order as to cos.ts. S. R Appeal dismissed