(1.) THIS is a lessee's appeal arising out of a suit for ejectment filed by the District Board, gurdaspur, with regard to a sarai situate at Pathankot including a portion which was occupied at one time by the office of the E. A. R. O. The building was leased out on 9-8-1945, vide Exhibit P. 5 for one year. The lease was renewed, the last lease being of 28-3-1947, Exhibit P. 1. According to the terms of this lease, the rent was fixed at Rs.

965/- per annum and there was the usual terms that the premises would be vacated on the

expiry of year on 31-3-1948. The suit for ejectment was instituted on 7-7-1952 on the

allegations that the tenant was liable to ejectment on account of the expiry of the period of tenancy and for having altered the building and made constructions without the consent of the landlord. It was claimed that the building in dispute was exempt from the operation of the East Punjab urban Rent Restriction Act, it being Government premised. According to the lessee no such exemption could be claimed as the provision under which such an exemption had been made was unconstitutional. It was further pleaded that the lease was meant to be a permanent one and there could be no ejectment. It was also claimed that the lessee had effected improvements in the building with the knowledge and consent of the plaintiff to the extent for Rs. 40,000/- to which he was entitled to be reimbursed before eviction. As many as 15 issues were framed by the trial court. The suit was ultimately decree on 19-11-1953. This decree was confirmed in appeal by the learned District Judge on 31-8-1954. An appeal was filed in this Court by the lessee on 11-12-1954. On 23-12-1957 the appellant filed a petition under O. 23 R. 3 Civil Procedure Code, alleging that the dispute between the parties had been compromised, vide District Board's Resolution No. 341 D/- 6-10-56 on the terms and conditions mentioned in the Government letter dated 21-7-1949 (produced as Exhibit D. 32 in the case), and punjab Government letter dated 2nd/4th May 1951 (produced as Exhibit D. 1 in the case). A copy was attached giving the terms of the compromise. Along with this petition a copy of an enclosure to the District Board's Resolution dated 6-10-1956 giving the detailed terms of a lease for 25 years was attached. According to clause No. 12 of this enclosure, the new agreement or proposal was not to be effective till the sanction of Government was granted. The enclosure referred to before contained the Sub-committee's report which was approved by the Board on 6-10-1956 in the following terms:

"sub-Committee's report is approved. It may be compromised subject to the modification of condition No. 7 as separately recorded from the date of Government's approval".

The Chairman District Board addressed a communication to the Deputy Commissioner, gurdaspur, on 16-10-1956 which is also to be found among the documents attached to the petition relating to the compromise. In this letter it was stated that the Board had decided to compromise the case and the approval of the Government was sought. On 29-10-1956 the deputy Commissioner wrote to the Vice Chairman of the Board as follows:

"in view of the fact that Government is itself anxious to effect a settlement in the matter you are advised to compromise the cases lodged in the Courts of law if the hearing dates are fixed before the sanction of the settlement arrived at is received from Government".

This obviously had reference to certain other litigation pending between the Board and the appellant relating to rent etc. It further appears from an affidavit of the Secretary of the Board dated 6-1-1958 that the Government declined to give sanction. The orders of the Government were made by the Revenue Minister, Giani Kartar Singh, and may be set out as follows:

"s. H. L. G. should visit the site himself or request Commissioner to do so in order to ascertain if the site can be sold for a good sum. The lessee does not appear to be a deserving one for grant of further leases. Steps should be taken to get the Sarai vacated from him even if that involves litigation".

The question about the compromise was put up before Gosain J. who made an order on 23-12-1957 directing parties to file the necessary affidavits and the replies. Thereafter the appeal has been placed before me for disposal.

(2.) IT is not possible to accede to the contention raised on behalf of the appellant that there has been a compromise between the parties and that the suit had been adjusted wholly or in part by any agreement or compromise within the meaning of O. 23 Rule 3 of the Code of Civil procedure. As pointed out before, the so-called new agreement or proposal was not to be effective until the sanction of Government had been obtained. The Government refused to grant sanction with the result that there was no completed compromise.

(3.) MR. F. C. Mital has next raised the question of the constitutionality of Section 3 of the East punjab Urban Rent Restriction Act, 1949. The aforesaid section is in the following terms:

"the State Government may direct that all or any of the provisions of this Act shall not apply to any particular building or rented land or any class of buildings or rented lands".

It is contended that the Government has been given unfettered discretion to exempt any particular building or class of buildings from the operations of the Act, which was intended to benefit the tenants generally against arbitrary and illegal eviction. Actually a notification dated 5-1-1949 was issued by the State Government by which all Crown property had been exempted from the provisions of the Rent Act. It is urged that by means of the aforesaid notification the very object of the Act is being defeated. Such a provision, according to Mr. Mital, offends the provisions of Art. 19 (1) (f) of the constitution. In support of this he has relied on Satish Chander v. Delhi Improvement Trust, 1957-59 P. L. R. 621: (AIR 1958 Punj 1) which is a Bench decision of this Court declaring the government Premises (Eviction) Act (27 of 1950) ultra vires on the ground that it offended against the fundamental right of property conferred by Art. 19 (1) (f). Certain Allahabad and calcutta decisions were relied upon for holding the aforesaid Act to be unconstitutional. At page 626 (of Pun LR): (at p. 4 of AIR), it was observed by Falshaw J. as follows:

"i consider, however, that there is more force in the view expressed in both the judgments that the powers given to the competent officer under the Act are so wide and capable of abuse and that the protections provided by the Act to the rights of any person effected by orders passed by the competent authority under sections to be enforced are so inadequate that the provisions of the act as a whole amount to interference with the fundamental right of a citizen under Art. 19 (1) (f)to hold property which is not saved by the provisions of clause (5) of the Article".

The learned Judge further considered that the Act in that case was capable of widest possible employment in matters of wholly different nature to the cases mentioned above. In Brigade commander, Meerut v. Ganga Prasad, (S) AIR 1956 All 507, the same Act was declared ultra vires as contravening the provisions of Art. 14 of the Constitution. Article 14 was held to be applicable with full force to a situation where a person occupying Government premises was not afforded the same protection as was afforded to a person occupying private land and differential treatment had no reasonable connection with the objects sought to be achieved. Moreover, the unguided and unfettered discretion of a non-judicial authority to relegate persons similarly situated to different remedies was found to be clearly violative of the principle of equality before the law guaranteed by Article 14. Falshaw J. in Satish Chander's case. 1957-59 pun LR 621: (AIR 1958 Punj 1) did not consider that Art. 14 could be properly invoked with regard to the Government Premises (Eviction) Act 1950 as the Allahabad Court sought to have done. My attention was also called to Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh, 1954 S. C. R. 803: (AIR 1954 SC 224), where the validity of certain provisions of the Uttar pradesh Coal Control Order was involved. Their Lordships of the Supreme Court declared the provisions of clause 4 (3) of the Order void on the ground that the law or order which conferred arbitrary and uncontrolled powers upon the executive in the matter of regulating trade or business in normally available commodities must be held to be unreasonable. It is noteworthy that the executive authorities on whom the so-called unfettered and arbitrary powers had been conferred in the cases cited before me consisted of the competent Officer in once case, and the licensing authority, which meant the District Magistrate of the District, in the other case. Section 3 of the Urban Rent Restriction Act, however, confers powers to make an exemption on the State Government which is very different from conferring powers on an executive official. The State Government does not consist of one individual and whatever decisions are taken by the Government they cannot be regarded exercise of discretion in the same manner as it can be exercised by the District Magistrate or a competent Officer under the Government Premises (Eviction) Act. The authorities which are more in point for deciding the question raised are rampratap v. Dominion of India, AIR 1953 Bom 170, Matajog Dobey v. H. C. Bhari, (S) AIR 1956 SC 44 and Pannalal Binjraj v. Union of India, AIR 1957 SC 397. In the Bombay case it was held that in exempting Government from the operation of the law, by virtue of S. 4 (1) of the Bombay Rents, Hotel and Lodging House Rates Control Act of 1947, the legislature had not created a class of which it could be said that it had no rational connection with the object the legislature wanted to achieve by the Act and that the classification was not unreasonable. At page 173 it has been observed that Art. 14 does not prevent the State in proper cases from exempting certain classes of persons from the application of a particular law, nor does it compel the State to extend the application of a particular law to all classes of subjects or to all territories coming within the jurisdiction of the State. An argument was raised that if the classification was such as was destructive of the very object then that classification was not a permissible classification. It was pointed out in that case by the counsel impugning the validity of S. 4 (1) that the whole object of the Rent Restriction Act was to control rents and to control evictions, and if Government were to be exempted from that legislation then the result should that it would be open to the Government to raise rents and also to evict their tenants. After considering the decisions of their Lordships of the Supreme Court in state of Bombay v. F. N. Balasara, 53 Bom LR 982: (AIR 1951 SC 318) and Charanjitlal v. Union of India, 1950 SCR 869: (AIR 1951 SC 41), Chagla C. J. came to the conclusion that the exemption of the Government from the operation of the Act could not be considered arbitrary and capricious. The learned Chief Justice considered that the underlying assumption of the exemption was that the Government would not increase the rents and would not eject tenants unless it was absolutely necessary in the public interest and unless a particular building was required for a public purpose. While deciding the constitutionality of S. 197 of the Code of Criminal Procedure their lordships of the Supreme Court in Matajog Dobey's case, (S) AIR 1956 SC 44 observed that a discretionary power was not necessarily a discriminatory power and abuse of power was not to be easily assumed where the discretion was vested in the Government and not in a minor official. In Pannalal Binjraj's case, AIR 1957 SC 397, the question before the Supreme Court was whether the power of transfer given to the Commissioner of Income-tax by S. 5 (7a) of the income-tax Act 1922 rendered that provision unconstitutional and no rules or directions had been laid in regard to the exercise of that power. Their Lordships laid down the law quite clearly that the mere fact that a discretion had been vested in the authority concerned was not sufficient to characterize the exercise of discretion as discriminatory. Even if there was a possibility of a discriminatory treatment of persons failing within the same group or category, such possibility could not necessarily invalidate the piece of legislation. If a mala fide order was passed that could be struck down, but the provision itself would not become unconstitutional. The following observation of Bhagwati J. at page 408 are significant:

"it may also be remembered that this power is vested not in minor officials but in top-ranking authorities like the Commissioner of Income-tax and the Central Board of Revenue who Act on the information supplied to them by the Income-tax Officers concerned. This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials".

In view of the discussion above, it must be held that the provisions contained in S. 3 of the urban Rent Restriction Act are perfectly valid.

(4.) MR. F. C. Mital has then attacked the validity of the notification itself. According to him the notification exempts all Crown property from the provisions of the Act and this cannot fall under s. 3, according to which, any property, building or class of building etc. could be exempted. The argument is that S. 3 contemplates a particular building or a class of buildings with reference to the same being residential or non-residential or capable of being classified with reference to the locality or the material used therein. I fail to see any fore in this contention. All properties or buildings which are Crown property would certainly form a class by themselves as the word 'class' must be given its plain meaning and cannot be given a restricted or a narrow meaning as Mr. Mital seeks to give. The next submission of Mr. Mital is that the notification in question could not have a retrospective effect and could not be made applicable to those lease which had created relationship of landlord and tenant prior to the enforcement of the urban Rent Restriction Act, 1949. This argument is obviously based on fallacy. The notification in question was issued on 5-1-1949, under the provisions of S. 3 of the Punjab Urban Rent restriction Act, 1947, (Punjab Act No. VI of 1947). The Act of 1949 came into force on 25-3-1949. The notification was therefore not issued under the Act of 1949, but was issued under a similar provision existing in the previous Act of 1947. The Act of 1947 was repealed by S. 21 of the Act of 1949. By virtue of the provisions of S. 22 of the Punjab General Clauses Act, 1898, the notification issued under the Act of 1947 was to continue in force until it had been superseded by any other notification issued under the new Act. As soon as the notification was made in January 1949, it exempted all Crown property from the provisions of the Act which meant that the protection which was given by the Rent Act to tenants was withdrawn with regard to Crown property. In other words, so far as Crown property was concerned, the ordinary law of the land was to apply in the matter of eviction of the tenants occupying such property. There was no question of taking away any vested rights as the Rent Restriction Act could not be regarded as having created any vested rights in the tenants to remain in occupation of the property. The Rent Act constituted a kind of remedial legislation which gave additional protection to the tenants but could not possibly be regarded as creating any vested rights in them. Therefore, even if a person was living in the Crown property as a tenant prior to the notification he ceased to enjoy the protection given by the Rent Act after the notification.

(5.) THE main defence of the appellant was that a permanent tenancy had been created or had been agreed to be effected. A good deal of emphasis was laid on various letters and documents of the Government which held out a hope that the property in dispute would be leased out to the appellant permanently and that he would not be ejected so long as he paid the rent. There will be an occasion to notice some of this correspondence when the question of compensation for improvements is considered, but suffice it to say with regard to the matter of permanent tenancy that the appellant has completely failed to prove any such tenancy or any agreement by virtue of which such a tenancy would have come into existence. The concurrent findings of the Courts below are also to this effect and Mr. Mital has not been able to show that there is any error involved in those findings.

(6.) MR. F. C. Mital has strenuously contended that even if the appellant is to be ejected he should be given compensation for the improvements. It is claimed that a certain portion marked a, B, C, D and Q in the plan, Exhibit P. 43 was built by the appellant at a cost of Rs. 9,000/- in the year 1946 soon after the property in question had been taken on lease. In 1947 the water and electricity was laid at his cost and another portion D, B, R, S, was constructed at a cost of Rs. 7,000/ -. Reference is invited to the reports and resolutions of the officers of the District Board and the District Board itself. Exhibits D. 22 and D. 21, which showed that the buildings were in such a bad state of repairs that they were estimated to cost about Rs. 12,000/ -. Another sum of Rs. 24,000/- is claimed to have been expended later on in 1951. It is, thus, claimed that about Rs. 40,000/- were expended on these improvements for which compensation must be granted before the appellant can be ordered to vacate the demised premises. The trial court found that the appellant had not produced any evidence to show what the value or the cost of the improvements was, not had he produced any account-books to substantiate his claim to the tune of Rs. 40,000/ -. Mr. Mital, however, urges that his client was not given proper opportunity by the trial Court to produce the evidence on the question of the value of improvements. He has referred me to the proceedings of the trial Court to show that the appellant's evidence had been closed arbitrarily and that he had not been allowed to examine Gurcharan Singh, an overseer, who had prepared an estimate of the improvements, and Ch. Dalip Singh and S. Sher singh, member and Vice-President of the District Board respectively. The question whether proper opportunity had been given or not was considered by the learned District Judge and he was of the opinion that the objection was devoid of all force and that the appellant's conduct showed that his intention was simply to prolong the proceedings. Apart from this, it would be unnecessary to decide this matter if the appellant cannot succeed in showing that he is entitled to compensation for improvements and at the same can be granted to him these proceedings.

(7.) FOR the purpose of claiming compensation Mr. Mital has mainly relied on the provisions of s. 51 of the Transfer of Property Act which provides that when the transferee of immovable property makes an improvement of the property, believing in good faith that he is absolutely entitled thereto, and he is subsequently evicted therefrom by any persons having a better title, the transferee has aright to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell his interest in the property to the transferee at the then market-value thereof, irrespective of the value of such improvement. Although this section does not in terms apply between a landlord and a tenant, compensation has been allowed on the principles contained therein to persons who entered into possession on an agreement that they would be given a permanent lease. Some of the case in which the aforesaid principle was applied are discussed in Maina Sahu v. Balak Das, AIR 1938 Pat 435, but in all those cases, either there was a verbal agreement to create a permanent lease or such facts existed as raised an estoppel against the landlord from contending that a permanent lease was not to come into existence. The learned District Judge has discussed certain authorities according to which even in case of permanent lease expenses incurred in making improvements cannot be allowed under the provisions of S. 51 of the Transfer of Property Act. It is altogether unnecessary to discuss this matter further as there is absolutely nothing on the record which can bring the present case within the rule laid down in AIR 1938 Pat 435, or attract the principle of S. 51 of the Transfer of property Act. It is true that the Government has been acting in a very strange and queer way as is apparent from certain documents on the record . The Secretary to the Punjab Government addressed a letter to the Commissioner, Jullundur Division, dated 4-5-1951, with regard to the ejectment of the appellant. In para 2 of the letter it is stated as follows:

"on further consideration of the matter in its important aspects Government have ordered that the District Board, Gurdaspur should be direc

ted to give the Sarai in question to S. Sadhu Singh on a lease for 25 years on the present rent with the conditions that he shall be sublet the premises or use them for any other purposes and he will not be entitled to any compensation when handing back the premises on the expiry of the aforesaid period of 25 years. If the Board fails to comply with these orders immediately Government will resume control of the Sarai from the Board and lease it out themselves. These orders of the Government may kindly be communication to the board (vide Exhibit D. 1)". Previous to this also a letter had been addressed by the Secretary to Punjab Government to the commissioner, Jullunder Division, on 5-12-1950, calling the attention of the Board to instructions issued by the Punjab Government in an earlier letter dated 21-7-1949 whereby the old tenants and refugees were not be ousted if they agreed to pay rents equal to three times the rents prevailing in 1939. The Government wanted to be apprised of the full facts of the case of the appellant and also whether he agreed to the aforesaid condition or not (vide Exhibit D. 2). In a subsequent letter, Exhibit D. 4, dated 22-4-1952, however, the Government again took a decision that the appellant should be ejected. Thereafter in 1956 during the pendency of the present appeal the Deputy Commissioner wrote a letter to the Vice-Chairman of the Board, dated 29-10-1956, which has already been referred to at an earlier stage, and then finally there are the orders of the Revenue Minister dated 3-5-1957 to the effect that the property in question should be got vacated from the appellant even if that involved litigation. It is unfortunate that the Government should have been changing its decision from time to time as it must have created a semblance of hope in the mind of the appellant that he might be allowed to stay on indefinitely. But that by itself was not sufficient in law to attract the application of S. 51 of the Transfer of Property Act. (8.) FOR all these reasons the judgment of the learned District Judge must be upheld, and the appeal dismissed. In the circumstances of the case there will be no order as to costs in this Court. Ordered accordingly. The appellant will have three months from today to remove the structure etc. and restore the premises in dispute in the condition it was leased out to the lessor. Appeal dismissed.