Supreme Court Strikes Down Direct Appeal Provision Under Chhattisgarh Rent Control Act (2019)

Introduction

Date of the Judgment: 10 December 2019

Citation: Not Available

Judges: Arun Mishra, J., Indira Banerjee, J., Vineet Saran, J., M.R. Shah, J., S. Ravindra Bhat, J. (Constitution Bench)

Can a state legislature create a law that allows direct appeals to the Supreme Court from a state rent control tribunal? The Supreme Court of India recently addressed this critical question of legislative competence in a case concerning the Chhattisgarh Rent Control Act, 2011. The core issue was whether the state legislature had the authority to enact a provision for direct appeals to the Supreme Court, bypassing the High Court, and whether such a provision was constitutionally valid. This judgment clarifies the division of legislative powers between the Union and the States, particularly regarding the jurisdiction of the Supreme Court.

Case Background

The case originated from an eviction application filed by a landlord (respondent) against a tenant (appellant) under the Chhattisgarh Rent Control Act, 2011. The Rent Control Authority allowed the eviction, and this decision was upheld by the Rent Control Tribunal. The tenant then appealed directly to the Supreme Court, citing Section 13(2) of the Rent Control Act, which allows for such direct appeals.

Timeline

Course of Proceedings

The case reached the Supreme Court after the Rent Control Tribunal upheld the eviction order. Initially, a two-judge bench of the Supreme Court questioned the maintainability of a direct appeal from a state tribunal to the Supreme Court, noting the potential lack of legislative competence of the State of Chhattisgarh to enact such a provision. Subsequently, another bench, after hearing the Advocate General for the State of Chhattisgarh, referred the matter to a Constitution Bench due to the substantial question of law regarding the interpretation of the Constitution.

Legal Framework

The Supreme Court examined several key articles of the Constitution, including:

• Article 124: Establishes the Supreme Court.
• Article 130: Specifies the seat of the Supreme Court.
• Article 131: Defines the original jurisdiction of the Supreme Court.
• Articles 132-134A: Outline the appellate jurisdiction of the Supreme Court concerning High Court decisions.
• Article 135: Deals with the jurisdiction and powers of the Federal Court under existing law.
• Article 136: Grants the Supreme Court special leave to appeal.
• Article 137: Grants the Supreme Court the power to review its judgements.
• Article 138: Discusses the enlargement of the jurisdiction of the Supreme Court.
• Article 139: Grants the Supreme Court the power to issue certain writs.
• Article 139A: Discusses the transfer of certain cases.
• Article 140: Grants the Supreme Court ancillary powers.
• Article 141: Declares the law declared by the Supreme Court to be binding on all courts.
• Article 142: Discusses the enforcement of decrees and orders of the Supreme Court.
• Article 143: Grants the President the power to consult the Supreme Court.
• Article 144: Requires all civil and judicial authorities to act in aid of the Supreme Court.
• Article 145: Grants the Supreme Court the power to make rules.
• Article 200: Pertains to the assent to Bills by the Governor.
• Article 201: Pertains to Bills reserved for consideration.
• Article 245: Defines the extent of laws made by Parliament and State Legislatures.
• Article 246: Specifies the subject matter of laws made by Parliament and State Legislatures.
• Article 247: Grants Parliament the power to provide for the establishment of certain additional courts.
• Article 248: Grants Parliament residuary powers of legislation.
• Article 262: Discusses the adjudication of disputes relating to waters of inter-State rivers.
• Article 348: Discusses the language to be used in the Supreme Court and High Courts.
• Article 323B: Deals with the establishment of tribunals.

The Court also referred to the Seventh Schedule of the Constitution, specifically:

• Entry 77 of List I (Union List): Deals with the constitution, organization, jurisdiction, and powers of the Supreme Court.
• Entry 18 of List II (State List): Pertains to land, land tenures, and the relationship between landlord and tenant.
• Entry 65 of List II (State List): Concerns the jurisdiction and powers of all courts, except the Supreme Court, with respect to matters in the State List.
• Entry 46 of List III (Concurrent List): Concerns the jurisdiction and powers of all courts, except the Supreme Court, with respect to matters in the Concurrent List.

The core issue revolved around the interpretation of these provisions to determine whether the Chhattisgarh State Legislature had the power to enact Section 13(2) of the Chhattisgarh Rent Control Act, 2011, which allows for direct appeals to the Supreme Court.

Arguments

Appellant’s Arguments:

• The appellant argued that the Chhattisgarh State Legislature was competent to enact the Rent Control Act under Entry 18 of List II (State List), which deals with land and landlord-tenant relations.
• It was contended that Section 13(2) of the Rent Control Act does not confer any additional jurisdiction to the Supreme Court that it did not already possess, as the Supreme Court has appellate jurisdiction under Article 136 of the Constitution.
• The appellant argued that the scope of Entry 77 of List I (Union List), which empowers the Union Parliament to legislate on the constitution, organization, jurisdiction, and powers of the Supreme Court, should not be widened to include appellate jurisdiction.
• The appellant asserted that Article 138(2) allows the Government of India and any State Government to confer further jurisdiction and powers to the Supreme Court by special agreement, if Parliament provides for it by law.
• It was argued that the Presidential assent to the Rent Control Act, under Article 200 of the Constitution, validated Section 13(2) and that the President acted on the aid and advice of the Council of Ministers, which amounted to an agreement between the State and Union Governments.
• The appellant relied on the judgment of Puthiyadath Jayamathy Avva vs. K.J. Naga Kumar, which stated that a State law assented to by the President would prevail over an earlier Union law.
• The appellant emphasized that the expression “derogate from the powers of the High Court” in Article 200 refers to the inherent powers of the High Court under Articles 226 and 227, which were not affected by the Rent Control Act.
• It was submitted that Section 13(2) is only in consonance with the powers of the Supreme Court under Article 136.

Respondent’s Arguments:

• The Attorney General for India argued that Section 13(2) of the Rent Control Act, which provides for direct appeals to the Supreme Court, is unconstitutional due to the lack of legislative competence of the Chhattisgarh State Legislature.
• It was contended that Entry 77 of List I (Union List), read with Article 146(1), confers exclusive jurisdiction on Parliament to legislate on the jurisdiction and powers of the Supreme Court.
• The respondent argued that Entry 65 of List II (State List) and Entry 46 of List III (Concurrent List) prohibit State Legislatures from legislating on the jurisdiction of the Supreme Court.
• The Attorney General submitted that the Presidential assent under Article 201 does not alter the legislative competence of the State Legislature, as neither the Governor nor the President can confer legislative competence on a legislative body.
• The respondent cited K.K. Poonacha vs. State of Karnataka, which stated that Presidential assent does not validate a law that is beyond the legislative competence of the State.
• The Attorney General referred to the decision of H.S. Yadav vs. Shakuntala Devi Parakh, which struck down a similar provision as ultra vires.
• The respondent argued that the State Legislature lacks competence to enact laws affecting the jurisdiction of the Supreme Court outside the State of Chhattisgarh.
• It was argued that Entry 18 of the State List does not enable the State Legislature to circumvent Entry 64 of the State List or Entry 46 of the Concurrent List.
• The respondent argued that Article 323B does not enable a State Legislature to expand the jurisdiction of the Supreme Court by enacting a provision for further statutory appeal.
• It was contended that Article 136 does not confer a right of appeal but a discretionary power, and it should not be confused with the appellate power exercised by appellate courts.

Submissions of Parties

Issues Framed by the Supreme Court

The primary issue framed by the Supreme Court was:

1. Whether Section 13(2) of the Chhattisgarh Rent Control Act, 2011, is ultra vires the Constitution of India due to a lack of legislative competence of the Chhattisgarh State Legislature to enact the provision.

Treatment of the Issue by the Court

Authorities

Cases Relied Upon by the Court:

• United Provinces vs. Atika Begum [AIR 1941 FC 16]: Established that legislative power extends to all ancillary matters.
• Samsher Singh vs. the State of Punjab and Anr. [AIR 1974 SC 2192]: Discussed the role of the President acting on the aid and advice of the Council of Ministers.
• Puthiyadath Jayamathy Avva and Ors. vs. K.J. Naga Kumar and Ors. [AIR 2001 KER 38]: Held that a State law assented to by the President prevails over an earlier Union law.
• K.K. Poonacha vs. State of Karnataka and Ors. [(2010) 9 SCC 671]: Stated that Presidential assent does not validate laws beyond legislative competence.
• H.S. Yadav vs. Shakuntala Devi Parakh [Civil Appeal No.5153 of 2019]: Struck down a similar provision as ultra vires.
• N. Natarajan vs. B. K. Subba Rao [(2003) 2 SCC 76]: Held that Article 136 confers a discretionary power on the Supreme Court.
• Dhakeshwari Cotton Mills Ltd. vs. Commissioner of Income Tax, West Bengal [AIR 1955 SC 65]: Held that Article 136 is not deterred by the finality given by a statute to decisions of a Court or Tribunal.
• L Chandra Kumar vs. Union of India and others [AIR 1997 SC 1125]: Held that the power of the High Court under Articles 226/227 is an inviolable basic feature of the Constitution.

Legal Provisions Considered by the Court:

• Article 124: Establishment and constitution of the Supreme Court.
• Article 130: Seat of the Supreme Court.
• Article 131: Original jurisdiction of the Supreme Court.
• Articles 132-134A: Appellate jurisdiction of the Supreme Court concerning High Court decisions.
• Article 135: Jurisdiction and powers of the Federal Court under existing law.
• Article 136: Special leave to appeal by the Supreme Court.
• Article 137: Review of judgments or orders by the Supreme Court.
• Article 138: Enlargement of the jurisdiction of the Supreme Court.
• Article 139: Conferment on the Supreme Court of powers to issue certain writs.
• Article 139A: Transfer of certain cases.
• Article 140: Ancillary powers of Supreme Court.
• Article 141: Law declared by Supreme Court to be binding on all courts.
• Article 142: Enforcement of decrees and orders of Supreme Court.
• Article 143: Power of President to consult Supreme Court.
• Article 144: Civil and judicial authorities to act in aid of the Supreme Court.
• Article 145: Rules of Court, etc.
• Article 200: Assent to Bills.
• Article 201: Bill reserved for consideration.
• Article 245: Extent of laws made by Parliament and by the Legislatures of States.
• Article 246: Subject-matter of laws made by Parliament and by the Legislatures of States.
• Article 247: Power of Parliament to provide for the establishment of certain additional courts.
• Article 248: Residuary powers of legislation.
• Article 262: Adjudication of disputes relating to waters of inter-State rivers or river valleys.
• Article 323B: Tribunals.
• Article 348: Language to be used in the Supreme Court and in the High Courts and for Acts, Bills, etc.
• Entry 77 of List I (Union List): Constitution, organisation, jurisdiction and powers of the Supreme Court.
• Entry 18 of List II (State List): Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant.
• Entry 65 of List II (State List): Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
• Entry 46 of List III (Concurrent List): Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• United Provinces vs. Atika Begum [AIR 1941 FC 16]: Followed to establish that legislative power extends to ancillary matters, but not to matters outside the legislature’s competence.
• Samsher Singh vs. the State of Punjab and Anr. [AIR 1974 SC 2192]: Cited to explain the role of the President, but held that Presidential assent does not confer legislative competence.
• Puthiyadath Jayamathy Avva and Ors. vs. K.J. Naga Kumar and Ors. [AIR 2001 KER 38]: Distinguished, as it did not deal with legislative competence.
• K.K. Poonacha vs. State of Karnataka and Ors. [(2010) 9 SCC 671]: Followed to hold that Presidential assent cannot validate laws beyond legislative competence.
• H.S. Yadav vs. Shakuntala Devi Parakh [Civil Appeal No.5153 of 2019]: Followed and agreed with, declaring a similar provision ultra vires.
• N. Natarajan vs. B. K. Subba Rao [(2003) 2 SCC 76]: Followed to clarify the discretionary nature of Article 136.
• Dhakeshwari Cotton Mills Ltd. vs. Commissioner of Income Tax, West Bengal [AIR 1955 SC 65]: Followed to clarify that Article 136 is not deterred by the finality given by a statute to decisions of a Court or Tribunal.
• L Chandra Kumar vs. Union of India and others [AIR 1997 SC 1125]: Followed to highlight the inviolable basic feature of the Constitution regarding High Court’s writ jurisdiction, but held it does not enlarge the scope of Article 226/227.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the constitutional distribution of legislative powers between the Union and the States. The Court emphasized that the power to legislate on matters concerning the jurisdiction of the Supreme Court rests exclusively with the Union Parliament. The Court also highlighted the distinction between the discretionary power under Article 136 and a statutory right of appeal, concluding that the State Legislature could not create a statutory right of appeal to the Supreme Court.

Fact:Law Ratio

The Court’s reasoning was primarily based on the interpretation of constitutional provisions and the division of legislative powers, with a lesser emphasis on the specific facts of the case.

Logical Reasoning

Judgment

The Supreme Court held that the Chhattisgarh State Legislature lacked the legislative competence to enact Section 13(2) of the Rent Control Act, which provided for direct appeals to the Supreme Court. The Court emphasized that the power to legislate on matters concerning the jurisdiction of the Supreme Court rests exclusively with the Union Parliament, as per Entry 77 of List I of the Seventh Schedule of the Constitution. The Court clarified that while the State Legislature could enact laws related to land and landlord-tenant relationships under Entry 18 of List II, this power did not extend to conferring jurisdiction on the Supreme Court.

The Court rejected the argument that Section 13(2) was merely an extension of the Supreme Court’s power under Article 136, stating that Article 136 provides a discretionary power, not a statutory right of appeal. The Court also rejected the argument that Presidential assent under Article 200 validated the provision, clarifying that Presidential assent cannot validate a law that is beyond the legislative competence of the State Legislature.

The Court also rejected the argument that Presidential assent to the law amounted to a special agreement between the State and Union Governments, as contemplated under Article 138(2) of the Constitution. The Court held that a special agreement requires independent negotiations and a parliamentary law, not just Presidential assent.

The Court cited and agreed with the judgment in H.S. Yadav vs. Shakuntala Devi Parakh, which had struck down a similar provision as ultra vires. The Court also reiterated that the High Court’s power of superintendence under Article 227 is supervisory, not appellate, and cannot be used to convert the writ jurisdiction into an alternative appellate forum.

The Court stated, “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 is not to be confused with the appellate power ordinarily exercised by appellate courts and Tribunals under specific statutes.”

The Court also observed, “A special agreement, in our considered view 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.”

The Court also noted, “Presidential assent cures repugnancy with an earlier Central Statute, provided the State Legislature is otherwise competent to enact the Statute.”

Ultimately, the Supreme Court declared Section 13(2) of the Chhattisgarh Rent Control Act ultra vires the Constitution, null, and void.

Order

The Supreme Court declared Section 13(2) of the Chhattisgarh Rent Control Act, 2011, as ultra vires the Constitution, null, and void. Consequently, the appeal before the Supreme Court was dismissed. The Court directed that any further appeals against orders of the Rent Control Tribunal should be filed before the High Court of Chhattisgarh. The Court also clarified that the judgment will have prospective effect, meaning it will not affect past cases where appeals have already been decided by the Supreme Court under Section 13(2).

Conclusion

The Supreme Court’s judgment in the case of Rajendra Diwan vs. Pradeep Kumar Ranibala & Anr. is a landmark decision that clarifies the constitutional limits on the legislative power of State Legislatures, particularly concerning the jurisdiction of the Supreme Court. The Court unequivocally held that State Legislatures cannot enact laws providing for direct appeals to the Supreme Court, as this power rests exclusively with the Union Parliament under Entry 77 of List I of the Seventh Schedule of the Constitution.

The judgment underscores the importance of maintaining the constitutional balance of powers between the Union and the States. It reaffirms that Presidential assent cannot validate laws that are beyond the legislative competence of the State Legislature. The Court also clarified the distinction between the discretionary power under Article 136 and a statutory right of appeal, emphasizing that the State Legislature cannot create a statutory right of appeal to the Supreme Court.

This judgment has significant implications for rent control laws across the country. It ensures that appeals from State Rent Control Tribunals are routed through the High Courts, thereby maintaining the established judicial hierarchy. It also serves as a reminder to State Legislatures to remain within their constitutional limits when enacting laws that may impact the jurisdiction of the Supreme Court.