Judges: Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah and S. Ravindra Bhat, JJ.

Facts:

The appeal under Section 13(2) of the Chhattisgarh Rent Control Act, 2011 (Rent Control Act) has been by the Appellant-tenant against an order of the Rent Control Tribunal, confirming an order passed by the Rent Control Authority, whereby an application filed by the Respondent-landlord for eviction of the Appellant-tenant Under Section 12 of the Rent Control Act has been allowed. The maintainability of petition has been challenged on ground that State of Chhattisgarh prima facie lacked legislative competence to enact law i.e. Section 13(2) of the Rent Control Act, providing for statutory appeals directly to the Supreme Court, from the orders of a Tribunal.

After hearing, the Bench of present court being of the view that the appeal involved a substantial question of law as to the interpretation of the Constitution has referred the appeal to the Chief Justice of India, for assignment to a Constitution Bench of this Court, in terms of Article 145(3) of the Constitution. The Chief Justice has referred the appeal to present Bench.

Issues:

(i) Whether Section 13(2) of the Rent Control Act is ultra vires the Constitution of India, by reason of lack of legislative competence of the Chhattisgarh State legislature to enact the provision?

Law:

Chhattisgarh Rent Control Act, 2011 - Section 13(2) - (1) Notwithstanding anything to the contrary contained in this Act, a landlord and/or tenant aggrieved by any order of the Rent Controller shall have the right to appeal in the prescribed manner within the prescribed time to the Rent Control Tribunal. (2) Appeal against an order of the Rent Control Tribunal shall lie with the Supreme Court.

Contentions:

Appellant

(i) The Rent Control Act has been enacted by the Chhattisgarh State Legislature, in exercise of legislative power conferred by Entry 18 of List II, that is, the State List in the Seventh Schedule to the Constitution of India.

(ii) Section 13(2) of the Rent Control Act does not confer any additional jurisdiction to the Supreme Court, which the Supreme Court did not otherwise possess. Section 13(2) of the Rent Control Act confers appellate jurisdiction to the Supreme Court of India, which the Supreme Court, in any case, always had and still has Under Article 136 of the Constitution.

(iii) Entry 77 enables the Union Parliament to legislate with regard to the constitution, organization, jurisdiction and powers of the Supreme Court of India. The scope of this Entry cannot be widened to include the appellate jurisdiction of the Supreme Court.

(iv) Article 138(1) provides that the Supreme Court shall have such further jurisdiction and powers with respect to any of the matters in the Union List, as Parliament may by law confer. This provision can only be understood to include the original jurisdiction of the Supreme Court. Article 138(2) provides that the Supreme Court shall have such further jurisdiction and powers with respect to any matter, as Government of India and the Government of any State may, by special agreement, confer, if Parliament by law provides for exercise of such jurisdiction and powers by the Supreme Court.

(v) Section 13(2) of the Rent Control Act is in consonance with Article 138, read with Article 200 of the Constitution of India, which enables the State Legislature to enact law curtailing the jurisdiction of the High Court, subject to the assent of the President of India.

(vi) If, in the opinion of the Governor, any Bill, if it becomes law, would so derogate from the powers of the High Court, as to endanger the position which the High Court is by the Constitution, designed to fill, the Governor is not to assent to the bill, but reserve the same for the consideration of the President.

(vii) A law which curtails powers of the High Court may be validated by Presidential assent. The State Legislature can restrict the appellate power of the High Court by providing for direct appeals to the Supreme Court.

(viii) A comparative reading of Articles 138(2) and Article 200 show that the State can make a law conferring appellate jurisdiction on the Supreme Court in the following two conditions: (i) When Government of India and Government of any State agree to confer jurisdiction and power on the Supreme Court [Article 138(2)]; (ii) When the President assents to the Bill forwarded by the Governor of the State [second proviso to Article 200]

(ix) In this case, the conditions of Article 138(2) and the Second proviso to Article 200 have both been complied with. The President has, on reference by the Governor, assented to the Bill, which has resulted in a new enactment.

(x) As per Article 74 of the Constitution, the President is to act as per the aid and advice of the Council of Ministers. So, assent by the President, on the aid and advice of the Council of Ministers, tantamounts to compliance with the conditions in Article 138(2) of the Constitution, as Presidential assent on the aid and advice of the Council of Ministers, means agreement between the State Government and the Government of India to confer appellate jurisdiction and power to the Supreme Court in relation to orders of the Rent Control Tribunal.

(xi) It was settled law that in case of any inconsistency between the provisions of the Constitution and the provisions of any statutory enactment, the various articles of the Constitution and the various provisions of the statutory enactments should be harmoniously construed.

(xii) The Rent Control Act has not conferred any jurisdiction on the Supreme Court, which it did not earlier possess. Article 136 provides for appeal to the Supreme Court against any order of any Court or Tribunal. Section 13(2) of the Rent Control Act is only in consonance with or may be an extension of the powers of the Supreme Court Under Article 136.

Attorney General for India/Respondent

(i) Section 13(2) of the Rent Control Act which provides for direct appeal to the Supreme Court of India, from any order passed by the Rent Control Tribunal, set up under the Rent Control Act, is unconstitutional, the same being beyond the legislative competence of the State Legislature of Chhattisgarh.

(ii) Lack of legislative competence of the Chhattisgarh State Legislature, to enact Section 13(2) of the Rent Control Act, is evident from a mere reading of three entries in the Seventh Schedule of the Constitution of India, that is, Entry 77 of List 1 (Union List), Entry 65 of List II (State List) and Entry 46 of List III (Concurrent List).

(iii) It would be seen that Entry 77 of List I, read with Article 146(1) of the Constitution, confers on Parliament the exclusive jurisdiction to legislate with regard to the jurisdiction and powers of the Supreme Court of India. Furthermore, Entry 65 of List II, as well as Entry 46 of List III, prohibit a State Legislature from legislating in regard to the jurisdiction of the Supreme Court of India. The clear scheme and architecture of these entries is buttressed by other provisions in the Constitution, which confer only on Parliament the competence to legislate in regard to the Supreme Court of India.

(iv) The fact that the Rent Control Act had been reserved for the assent of the President of India, Under Article 200 of the Constitution, and had received the assent of the President in terms of Article 201, would not in any manner alter the extent of legislative competence of the State Legislature. This is for the reason that, neither the Governor of any State, nor the President of India, may confer legislative competence on any legislative body, whether Parliament or a State Legislature, contrary to the provisions of the Constitution.

Analysis:

(i) Parliament and the State Legislatures derive their power to make laws from Article 245(1) of the Constitution of India and such power is subject to and/or limited by the provisions of the Constitution. While Parliament can make law for the whole or any part of the territory of India, the State Legislature can only make laws for the State or any part thereof, subject to the restrictions in the Constitution of India.

(ii) While Parliament has exclusive power Under Article 246(1) of the Constitution to make laws with respect to the matters enumerated in the Union List, the State Legislature has exclusive power to make laws with respect to matters enumerated in the State List, subject to Clauses (1) and (2) of Article 246 of the Constitution. Along with the Union Legislature, the State Legislature is also competent to enact laws in respect of the matters enumerated in the Concurrent List, subject to the provisions of Article 246(1) of the Constitution.

(iii) The Supreme Court has been established Under Article 124 of the Constitution of India and derives its jurisdiction and powers from Articles 131 to 145 of the Constitution thereof. There is no provision in the Constitution which provides for direct appeal to the Supreme Court, from an order of a Tribunal constituted under any law enacted by a State Legislature.

(iv) Entry 18 of the State List enables the State Legislature to enact law with respect to land, including rights in and over land, land tenures including relation of landlord and tenant and the collection of rent. The State Legislature being clothed with power to enact law in respect of land tenures, including the relation of landlord and tenant and the collection of rent, it had legislative competence to enact the Rent Control Act, in so far as the same regulates the relationship of landlord and tenant and the collection of rent.

(v) On a conjoint reading of Article 323B and Articles 245 and 246 of the Constitution of India with Entry 18 of the State List in the Seventh Schedule, there can be no doubt that the State Legislature was competent to enact law to provide for adjudication and trial of all disputes, complaints and offences relating to tenancy and rent, by a Tribunal.

(vi) The Chhattisgarh State Legislature was thus competent to enact the Rent Control Act, to the extent that it provides for the adjudication of original disputes relating to tenancy and rent by the Rent Controller, and creates a Tribunal to decide appeals from orders of the Rent Controller, but subject to the exception, as discussed hereafter.

(vii) However, Section 13(2) of the Rent Control Act, providing for direct appeal to the Supreme Court from orders passed by the Rent Control Tribunal, is not ancillary or incidental to the power of the Chhattisgarh State Legislature to enact a Rent Control Act, which provides for appellate adjudication of appeals relating to tenancy and rent by a Tribunal. In enacting Section 13(2) of the Rent Control Act, the Chhattisgarh State Legislature has overtly transgressed the limits of its legislative power.

(viii) Both the Union legislature and the State Legislature derive their power to legislate from Article 245 of the Constitution of India. It is axiomatic that the legislature of a State may only make laws for the whole or any part of the State, while Parliament may make laws for the whole or any part of the territory of India. There is no provision in the Constitution which saves State laws with extra-territorial operation, similar to Article 245(2) of the Constitution which expressly saves Union laws with extra-territorial operation, enacted by Parliament. The Chhattisgarh State Legislature, thus, patently lacks competence to enact any law which affects the jurisdiction of the Supreme Court, outside the State of Chhattisgarh.

(ix) Entry 18 of the State List, which only enables the State Legislature to legislate with regard to land, land tenures, landlord tenant relationship, collection of rents etc. does not enable the State Legislature to enact law conferring appellate jurisdiction to the Supreme Court in respect of orders passed by an Appellate Rent Control Tribunal, constituted under a state law.

(x) Under Article 136 of the Constitution, the Supreme Court does not act as a regular court of appeal. The power of the Supreme Court Under Article 136 of the Constitution is not to be confused with the appellate power ordinarily exercised by appellate courts and Tribunals under specific statutes. Article 136 of the Constitution does not confer a right of appeal on any party, but confers a discretionary power on the Supreme Court to interfere in appropriate cases. This power can be exercised in spite of other provisions for appeal contained in the Constitution, or any other law. While exercising power Under Article 136 of the Constitution, the Supreme Court does not re-appreciate evidence which has been appreciated by the Trial Court and the High Courts, unless extraordinary circumstances exist. It is only where the High Court has completely missed the real point requiring adjudication or has missed or ignored the relevant material, would the Supreme Court be justified in getting into evidence for the purpose of preventing grave injustice to a party.

(xi) An appeal, on the other hand, is a continuation of the original proceedings. Where there is a statutory appeal from an appellate order of the Tribunal, the appellate court is obliged to rehear the case, re-appreciate and re-analyze the evidence on record, adjudicate the correctness of the order impugned and correct errors both of fact and of law that the Tribunal may have made.

(xii) Article 200 of the Constitution relating to the passage of Bills except money Bills, requires Bills passed by the Legislative Assembly of a State, or in case of a State having a Legislative Council, a bill passed by both the houses of the Legislature of the State, to be presented to the Governor for assent. Such Bills become law on receipt of assent of the Governor.

(xiii) The second proviso to Article 200 of the Constitution mandates the Governor not to assent, but reserve for the consideration of the President, any Bill, which in the opinion of the Governor would, if it became law, so derogate from the powers of the High Court, as to endanger the position which that Court is, by the Constitution, designed to fill.

(xiv) The second proviso to Article 200 of the Constitution, however, is not attracted in the case of Section 13(2) of the Rent Control Act, since it does not derogate from any power of the High Court. It is well settled that there is no inherent right of appeal. Right of appeal is conferred by Statute. A Statute is not invalid only because it has no provision of appeal to the High Court.

(xv) Presidential assent makes no difference in case of legislative incompetence. Presidential assent cannot and does not validate an enactment in excess of the legislative powers of the State Legislature, nor validate a statutory provision, which would render express provisions of the Constitution otiose. Presidential assent cures repugnancy with an earlier Central Statute, provided the State Legislature is otherwise competent to enact the Statute.

(xvi) Section 13(2) of the Rent Control Act purports to confer a right of statutory Second Appeal to the Supreme Court. Even in case of concurrent findings of the Rent Controller and Rent Control Tribunal, where no serious question of law were involved, an appeal would have to be entertained and decided. Such a provision which mandates the Supreme Court to consider an appeal is clearly beyond the legislative competence of the State Legislature, as argued by the learned Attorney General. Article 200 of the Constitution as observed above does not and cannot validate an ultra vires enactment, which the concerned Legislature lacked competence to enact.

(xvii) Article 138(2) of the Constitution provides that the Supreme Court shall have such further jurisdiction and powers with respect to any matter as the Government of India and the Government of any State may by special agreement confer, if Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court.

(xviii) It is difficult to accept that reservation of a Bill for Presidential assent and consequential grant of Presidential assent, tantamounts to special agreement between the Government of India and the State Government, because the President acts on the aid and advice of the Council of Ministers.

(xix) A special agreement means an independent agreement arrived at between the Government of India and the Government of a State through deliberations and negotiations and not just an approval of legislation by the President on the aid and advice of the Council of Ministers.

(xx) In any case, the Supreme Court may exercise further jurisdiction pursuant to a special agreement between the Government of India and the State Government on any particular issue, provided Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court. Parliament has not enacted any such law enabling the Supreme Court to exercise jurisdiction in respect of a subject matter agreed upon between the Government of India and the State Government. Article 138(2) of the Constitution is not attracted.

(xxi) The judgment of this Court in H.S. Yadav has rightly declared Section 13(2) of the Rent Control Act ultra vires the Constitution and beyond the scope of the power of the State legislature.

Conclusion:

(i) The State Legislature lacked legislative competence to enact Section 13(2) of the Rent Control Act. Therefore, Section 13(2) of the Rent Control Act is ultra vires to the Constitution of India and so, null and void and of no effect.

Important Precedents:

(i) L Chandra Kumar v. Union of India and Ors, MANU/SC/0261/1997

(ii) H.S. Yadav v. Shakuntala Devi Parakh