M/S STYLE (DRESS LAND) ETC. ETC. versus UNION TERRITORY,CHANDIGARH AND ANR.

Citation: [1999] SUPP. 1 S.C.R. 591 · Decided: 18-08-1999 · Supreme Court of India · Bench: S. SAGHIR AHMAD · Disposal: Case Partly allowed

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Judgment (excerpt)

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MIS STYLE (DRESS LAND) ETC. ETC. 
v. 
UNION TERRITORY, CHANDIGARH AND ANR. 
AUGUST 18, 1999 
[S. SAGHIR AHMAD AND R.P. SETHI, JJ.] 
Capital of Punjab (Development and Regulation) Act, 1952-Sections 
3 and 22-Act enacted at a time when the construction of a new capital of 
A 
B 
the then Punjab at Chandigarh was in progress-Power of Central 
Government in respect of transfer of land and buildings in Chandigarh- C 
Lease of commercial flats entered into with Government-Sharp increase in 
rent from Rs. 2, 671 to 14000 per month-Increase of rent challenged in writ 
petitions before High Court-Held, combined reading of Sections 3 and 22 
indicate the existence of an obligation on the Central Govemment to make 
rules regulating terms and conditions relating to transfer of property-but D 
failure to frame rules will not render the transfer of property made under the 
terms of the lease as j//egal, void or inoperative-Thus High Court rightly 
concluded that procedure adopted and made the basis for enhancing the 
rent, could not be termed arbitrary, discriminatory and unreasonable. 
Constitution of India, 1950 : 
E 
Article 14: 
Discrimination & Arbitrariness-Central Government authorised to 
make rules under Section 3 of the Capital of Punjab (Development and 
Regulation) Act, 1952 relating to transfer of property and leasing it out-. F 
No such rules framed by the Central Government-Held, though not legally 
obliged to make the rules, it was obliged to take such steps for allaying 
apprehensions of the citizens regarding discrimination and arbitrariness. 
Exercise of such power in the absence of Rule-Held, is required to be 
fair and reasonable and actuated by considerations which could be termed G 
as arbitrary or discriminatory-Rule of law-Administrative law-Absence 
of rules. 
Articles. 226 and 136-Judicial review-Government contract with 
private individuals-Held, covered-Administrative law-Judicial review. 
H 
591 
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... 
A 
592 
SUPREME COURT REPORTS [1999] SUPP. I S.C.R. 
Administrative Law: 
Administrative orders-Judicial Review-Scope of-Held, the Court 
can look into the reasons given by the Government in support oj its action 
but cannot substitute its own reasons-Further, the courts are more concerned 
with the decision making process than the decision itself-Administrative 
B order-Extraneous and irrelevant reasons-Such orders are required to be 
struck down. 
Principles of Natural justice-Compliance of-In administrative action-
Administrative orders affecting the rights of the citizens to the property or 
C attributes of property-Held, required to be taken in consonance with rules 
of natural justice. 
Interest-Payment of-On the arrears of rent-For the period of stay 
order of a Court-Held, High Court was not wrong in directing the payment 
of interest on the amount of arrears of rent for the period when the stay order 
D was obta~ned till the time the writ petition was dismissed-However, I 8% 
allowed by High Court reduced to Js<Yo-Civil Procedure Code, 1908, Order 
39 S.34 . 
Appellants took on lease certain commercial premises in Chandigarh 
from the Respondent-lessor in or about the years 1963-64 but the lease were 
E executed between the Lessor and the Lessees in May 1968 on payment of 
monthly rent of Rs. 525. The lease was initially for a period of five years 
and was renewable only once for another term of five years with 20% 
increase in the rent reserved under the deed. After the expiry of initial 
period of 10 years, the rent of the leased premised was increased to Rs. 
F 
2,671/- per month w.e.f March 1983. The lessees challenged the increase in 
rent by filing a writ petition in the High Court but were not successful. 
Respondents again issued notices to the appellants/Lessees that w.e.f M~rch 
1992 the rent was being increased to Rs. 14,000 per month and called upon 
the Lessees to renew fresh lease deed on these terms and conditions. 
Appellants once again approached the High Court by filing a writ petition. 
G However the writ petitions were dismissed by a Division Bench with a direction 
that if the appellants convey their consent to the terms and conditions 
incorporated in the impugned notices within three months, the respondents 
were to renew the lease granted to such of the appellants subject to their 
paying arrears of rent within six months. For the period during which the 
payment of the rent at the rates specified in the impugned notices remained 
H stayed by the High Court, the ap

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