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1954 DIGILAW 37 (ALL)

Jaswant Ram v. L. Kishen Chand

1954-01-21

MALIK, SAPRU

body1954
JUDGMENT Malik, CJ. - This is a revision u/s 115 of the CPC filed by the Defendant in a suit for fixation of rent u/s 5(4) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 (U.P. Act III of 1947). 2. The Defendant has been a tenant of the Plaintiff from the 23rd of December, 1940, when a rent deed was executed by the Defendant agreeing to pay. Rs. 80/-(Rs. 50/- for two shops and Rs. 30/- for a piece of land in front of one of the shops on which the Defendant has installed a petrol pump). In the yeas 1945 the Defendant gave up possession of one shop but he remained in possession of the land and the other shop. In April 1946 the rent of the shop in Defendant's possession was, by mutual agreement, increased to Rs. 32/8/-. The Plaintiff was, however, not satisfied and gave a notice claiming rent at an enhanced rate and thereafter filed the suit No. 317 of 1946) for recovery of rent at the enhanced rate. The suit was however, decreed only for Rs. 111/4/-, the rent being calculated at Rs. 32/8/-the figure agreed upon, and the Defendant has continued to pay rent at that rate. 3. The Plaintiff filed this suit u/s 5(4) of the U.P. (Temporary) Control of Rent and Eviction Act for fixation of rent alleging that rents had gone up, that the rent of the shop was very inadequate and that the Plaintiff was entitled to get rent at the rate of Rs. 125/- per month. The lower court, taking into consideration the rents of other shops situated in the locality, came to the conclusion that Rs. 75/-per month from the date of the suit would be a fair rent for the shop. The Defendant has filed this revision and Mr. Dhavan, learned Counsel for the Defendant, has urged that the suit was not maintainable. 4. The first Sub-section of Section 5 provides that except as provided in the section, the rent payable by a tenant to his landlord must be the rent agreed upon and is as follows: 5(1) Except as hereinafter provided in this section, the rent payable for any accommodation to which this Act applies shall be such as may be agreed upon between the landlord and the tenant. 5. 5. Sub-section (2) then provides that: 5(2) When the rent for any such accommodation has not been agreed upon or where, in the case of tenancies continuing from before October 1, 1945, the landlord wishes to enhance the rent agreed upon, he may, by notice in writing, fix the annual rent at or enhance it to an amount not exceeding the reasonable annual rent. 6. In the case before us, the tenancy commenced from 23rd December, 1940, and the second part of Sub-section (2) will, therefore, apply and the landlord has the right to enhance the rent agreed upon by notice in writing, but not beyond the reasonable annual rent. The first proviso to this Sub-section places a further limits that this enhancement shall not exceed more than 50 per cent of the rent payable on October 1, 1946, even if the reasonable annual rent is more. There is a further proviso with which we are not concerned that in the case of a lease for a fixed period the rent cannot be enhanced till the expiry of the term. Sub-section (3) is not relevant for our purposes and may be omitted. We are really concerned with Sub-section (4), the relevant portion of which is as follows: 5(4) If the landlord of the tenant, as the case may be, claims that the annual reasonable rent of any accommodation to which the Act applies is inadequate or excessive, or if the tenant claims that the agreed rent is higher than the annual reasonable rent, he may institute a suit for fixation of rent in the Court of the Munsif having territorial jurisdiction, if the annual rent claimed or payable is Rs. 500 or less, and in the Court of the Civil Judge having territorial jurisdiction if it exceeds Rs. 500, provided that the Court shall not vary the agreed rent unless it is satisfied that the transaction was unfair, and in the case of lease for a fixed term made "before April 1, 1942, that the term has expired. 7. 500 or less, and in the Court of the Civil Judge having territorial jurisdiction if it exceeds Rs. 500, provided that the Court shall not vary the agreed rent unless it is satisfied that the transaction was unfair, and in the case of lease for a fixed term made "before April 1, 1942, that the term has expired. 7. It would be clear that the Sub-section contemplates suits of two kinds: (i) a suit to vary the annual reasonable rent a landlord, if he considers the annual reasonable rent inadequate, or a tenant, if he considers that the annual reasonable rent is excessive, may file a suit for fixation of rent; and (ii) a suit by a tenant who claims that the agreed rent is higher than the annual reasonable rent and can satisfy the Court that the transaction was unfair. 8. It would thus be clear that the position of the landlord is as follows: (1) The landlord can claim the agreed rent; (2) if there is no agreed rent, the landlord can by notice in writing fix the annual rent at an amount not exceeding the reasonable annual rent; (3) if the tenancy has continued from before. October 1, 1946, the landlord may by notice enhance the rent to an amount not exceeding the reasonable annual rent but the enhanced rent cannot exceed the rent payable on October 1, 1946, by more than 50 per cent; and (4) if the landlord considers that the annual reasonable rent is inadequate, he may bring a suit for fixation of rent 9. 'Reasonable annual rent' is defined in Section 2(f) of the U.P. (Temporary) Control of Rent and Evict. 'Reasonable annual rent' is defined in Section 2(f) of the U.P. (Temporary) Control of Rent and Evict. on Act as follows: Reasonable annual rent' in the case of accommodation, constructed before July 1, 1946, means: (1) if it is separately assessed to-municipal assessment, its municipal assessment plus 25 per cent thereon; (2) if it is a part only of the accommodation so assessed, the proportionate amount of the municipal assessment of such accommodation Plus 25 per cent thereon; (3) if it is not assessed to municipal assessment: (i) but was held by a tenant on rent between April, 1942 and June 30, 1946 fifteen times the rent for one month nearest to and after April 1, 1942, and (ii) if it was not so held on rent, the amount determined u/s 3-A, and in the case of accommodation constructed on or after July 1, 1946 means the rent determined in accordance with Section 3-A. 10. It is urged by Mr. Dhavan, on behalf of the applicant, that the Plaintiff could file a suit for fixation of rent u/s 5(4) of the Act only if he alleged that the reasonable annual rent was inadequate. It has further been urged by learned Counsel that the rent having been fixed by mutual agreement at Rs. 32/8/- in April 1946 the Plaintiff could not claim to have that rent varied without establishing that the transaction was unfair. 11. Reliance is place on certain observations made in Murli Singh v. Tika Ram 1950 A.W.R. (H.C.) 615 : AIR 1950 Alld. 401, and it is urged that the Court cannot vary the agreed rent unless it is satisfied that the transaction was unfair. 12. We do not think that there is any substance in the contention raised by learned Counsel that a landlord, who claims that the reasonable annual rent is inadequate, has further to prove that the transaction was unfair. From the definition of the words 'reasonable annual rent' quoted above it would appear that reasonable annual rent is fixed on the basis of the municipal assessment and need not be the rent agreed upon between the landlord and the tenant. We have already said that Sub-section (4) of Section 5 is divisible into two parties. From the definition of the words 'reasonable annual rent' quoted above it would appear that reasonable annual rent is fixed on the basis of the municipal assessment and need not be the rent agreed upon between the landlord and the tenant. We have already said that Sub-section (4) of Section 5 is divisible into two parties. The first part deals with reasonable annual rent and a suit for fixation of rent can be filed if either the landlord or the tenant claims that the reasonable annual rent is inadequate or excessive. The second part relates to the agreed rent and it deals only with a case where the tenant considers that the agreed rent is excessive and files a suit for fixation of rent. The enactment was for the protection of tenants who were placed in a position of difficulty by reason of dearth of accommodation and it does not appear to have been contemplated that there was any likelihood of a contract of tenancy arising where a landlord could complain that the agreed rent was inadequate on the ground that the transaction was unfair. In the case of a landlord, therefore, he was left to his ordinary remedy under the Indian Contract Act and the Civil Procedure Code, while a special provision was made for tenants in Section 5(4) of the Act that in case they considered that the agreed rent was excessive and were able to satisfy the Court that the transaction was unfair they could bring a suit for fixation of rent. 13. We agree with the view taken in L. Bhim Sen and Anr. v. Seth Murari Lal 1952 A.W.R. (H.C.) 37, that the question of the transaction being unfair arises only in a case where a tenant has brought a suit for reduction of the agreed rent and there is no provision in Section 5(4) of the U.P. (Temporary) Control of Rent and Eviction Act to enable a landlord to file a suit for enhancement of the agreed rent. 14. In Central Bank of India Meerut v. L. Narendrapal AIR 1950 Alld. 52, Mr. Justice Seth took the view that the intervention of the Court can only be sought for u/s 5(4) of the U.P. (Temporary) Control of Rent and Eviction Act when the landlord claims that the reasonable annual rent is inadequate. 15. 14. In Central Bank of India Meerut v. L. Narendrapal AIR 1950 Alld. 52, Mr. Justice Seth took the view that the intervention of the Court can only be sought for u/s 5(4) of the U.P. (Temporary) Control of Rent and Eviction Act when the landlord claims that the reasonable annual rent is inadequate. 15. It, therefore, appears that a landlord can file a suit for fixation of rent where he considers that the reasonable annual rent is inadequate and in that case if the Court considers that the reasonable annual rent is inadequate it will fix the proper rent payable for the accommodation. 16. Mr. Dhavan has pointed out that the suit was wholly misconceived as the Plaintiff claimed that the agreed rent was inadequate and it was not alleged in the plaint that the reasonable annual rent was inadequate, nor does it appear from the record what the reasonable annual rent was. In the circumstances, he has pleaded that the suit must fail and should be dismissed. 17. On behalf of the opposite-party, however, it has been urged that the Plaintiff should be given an opportunity to amend the plaint so that the case might be brought within the provisions of Section 5(4) of the Act. It has been pointed out by learned Counsel that the objection as to the maintainability of the suit was not taken in the lower court, that this revision has been pending here now for well high five years and it would mean great hardship to the Plaintiff if the suit was now dismissed inasmuch as the Defendant has been paying rent at the rate fixed by the lower court after the decision by that court. 18. After having carefully considered the matter we have come to the conclusion that it is in the interest of justice that we should allow this revision, set aside the order of the lower court and send the case back for retrial after giving the Plaintiff permission to amend his plaint to bring it within the provisions of Section 5(4) of the Act. The Defendant will have to be given an opportunity to file a fresh written statement and the case will have to be tried de novo. 19. The Defendant will have to be given an opportunity to file a fresh written statement and the case will have to be tried de novo. 19. The result, therefore, is that we allow this revision, set aside the order of the lower court and send the case back for decision according to law after allowing the parties opportunity to amend their pleadings, if necessary. The applicant shall get his costs of this Court and the costs incurred in the lower court from the Plaintiff opposite-party. Costs hereafter shall abide the result.