DELHI CLOTH AND GENERAL MILLS LTD. versus S. PARAMJIT SINGH AND ANOTHER

Citation: [1990] SUPP. 2 S.C.R. 218 · Decided: 09-10-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Dismissed

Judgment (excerpt)

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B 
c 
D 
DELHI CLOTH AND GENERAL MILLS LTD. 
v. 
S. PARAMJIT SINGH AND ANOTHER 
OCTOBER 9, 1990 
[S. RANGANATHAN, T.K. THOMMEN AND 
P.B. SAWANT, JJ.] 
Constitution of India, 1950: Article J4.-Classification of tenants 
on basis of annual income-Validity of-Section J(J)(iii), Jammu and 
Kashmir Houses and Shops Rent Control Act, 1966-Validity of 
Jammu and Kashmir Houses and Shops Rent Control Act, 
1966: Section J(J)(iii)-Protection to tenants on the basis of annual net 
income of tenant-Whether permissible-Classification-Whether vio-
lative of Article 14 of Constitution-Income-Concept of-Net income 
-Meaning of. 
Words & Phrases-Words 'income' and 'net income' meaning of. 
The appellant, a tenant, claimed protection of the Jammu and 
Kashmir Houses and Shops Rent Control Act, 1966. The courts below 
disallowed the claim, on the grouud that clause (iii) of sub-section (3) of 
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Section 1, read with the Explanation was attracted in respect of the 
appellant. 
The appellant challenged the validity of clause (iii) of sub-section 
(3) of Section 1 of the Jammu and Kashmir Houses and Shops Rent 
Control Act, 1966 before the High Court on the ground that it violated 
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Article 14 of the Constitution. The High Court, following its earlier 
decision in the J & K Bank Ltd. v. State of J & K & Another, AIR 1987 
J & K 18 upheld validity of the clause. 
In the appeal before this Court, the appellant-tenant contended (i) 
that the clause was discriminatory and arbitrary, because it drew an 
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artificial distinction between tenants on the basis of their income, in 
that while those tenants earning net income below Rs.40,000 per annmn 
were protected by the beneficial provisions of the Act, those with annual 
net income in excess of the st~iutory limit of Rs.40,000 were unreason-
ably and unfairly denied tli< l'rotection and this statutory discrimina-
tion placed them at the mercy of the landlords, who could easily evict 
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them by recourse to the far less restrictive provisions of the Transfer of 
218 
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D.C.M. v. S. PARAMJIT SINGH 
219 
Property Act, 1882 and on the strength of their agreements of lease, (ii) 
that the clause did not take into account the nature of the building, or 
A 
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the need and income of the landlord or any other factor and withheld or 
extended protection solely on the fmancial capacity of the tenant, which 
could vary from year to year, depending upon the nature of his business 
and other factors, thus exposing the tenant to eviction when the busi-
ness was prosperous, but protecting him when the business declined 
and income fell, (iii) that "income" was not a clear and precise concept; 
limiting it to net income did not make it clearer, and the Act did not 
indicate the permissible deductions for arriving at the "net" and (iv) 
that the Section was invalid because it was too broad or vague and any 
classification based on such vague differentia was unintelligible and, 
therefore, violative of Article 14; and in any view, the classification 
sought to be made between persons falling on either side of the specified C 
income had no reasonable relation to the object sought to be achieved 
by the statute. 
Dismissing the above appeal, and another similar. appeal (Civil 
Appeal No. 1370of1987), this Court, 
o 
HELD: 1.1 The object of the Jammu and Kashmir Houses and 
Shops Rent Control Act, · 1966 is undoubtedly to protect the weaker 
section of tenants from unreasonable eviction and unfair rent. At the 
same time, the legislature did not desire to discourage persons from 
constructing buildings. Thus, while protection is afforded to deserving 
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tenants, construction of new buildings is encouraged by exempting 
buildings occupied by richer classes of tenants from the provisions of the 
Act. While a building is covered by the Act when occupied by a tenant 
whose annual net income is less than the specified amount, the protec-
tion is withheld when the same building is occupied by a richer tenant 
whose annual net income is higher than the specified amount. Where a F 
building is occupied by more than one tenant, the applicability of tbe 
Act to each of them wonld depend upon his net income. It is the tenant 
that the legislature intends to protect and not the landlord or his bnild-
iug. The test adopted by the legislature for this purpose is with refe-
rence to the tenant's net income, whether accruing inside or, outside the 
State, as on the date of the landlord's application for eviction as well

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