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Allahabad High Court · body

1961 DIGILAW 202 (ALL)

Ram Das Gupta v. Shiva Charan Lal

1961-08-31

M.C.DESAI, T.RAMABHADRAN

body1961
JUDGMENT M. C. Desai, C. J. - The undisputed facts in this case are as follows: The opposite party is the owner of the house in dispute and let it out to the applicant sometime in 1931 at the rent of Rs. 300 per annum. In 1951 he filed a suit under Sec. 5(4) of the U.P. (Temp.) Control of Rent and Eviction Act for fixation of the rent of the house at Rs. 1,200 per annum, pleading that it was assessed by the Municipal Board to an annual rent of Rs. 480 in 1937 and of Rs. 600 in 1944, that the reasonable annual rent of it was grossly inadequate, that its rental value was much more than Rs. 300 per annum, that the applicant refused to enhance it to a reasonable amount and that the cause of action accured for the suit on the refusal. The suit was contested by the applicant on the grounds that the fair rental value of the house was not more than Rs. 300 per annum, that the transaction of rent between the parties was not unfair and consequently the agreed rent of Rs. 300 per annum could not be varied by the court and that the court could not fix the rent at a figure beyond the limits laid down in sub-sec. (2) of Section 5. The learned Civil Judge repelled the contention of the applicant that he could not fix the rent at a figure exceeding the limit mentioned in sub-sec. (2) of Section 5, found that the fair rental value of the house was Rs. 840 per annum and that the transaction in which the agreed rent was fixed was unfair and decreed the suit fixing the rent at Rs. 840 per annum. This revision application is filed against his judgment. 2. We are concerned with the provisions of Section 5 of the Control of Rent and Eviction Act as it stood in 1951. Under sub-sec. (1) the rent payable for an accommodation is the agreed rent; the agreed rent in the present case was Rs. 300 per annum. sub-sec. 840 per annum. This revision application is filed against his judgment. 2. We are concerned with the provisions of Section 5 of the Control of Rent and Eviction Act as it stood in 1951. Under sub-sec. (1) the rent payable for an accommodation is the agreed rent; the agreed rent in the present case was Rs. 300 per annum. sub-sec. (2) provides that where the landlord wishes to enhance the agreed rent he may by notice in writing enhance it to "an amount not exceeding the reasonable annual rent: Provided that the enhanced rent shall not exceed the rent, if any, payable on October 1, 1946, by more than 50 per cent thereof." According to this provision the opposite party could enhance the agreed rent of Rs. 300 per annum by a notice in writing to an amount not exceeding the reasonable annual rent and also not exceeding Rs. 450 per annum. There are two limits imposed upon his power to enhance the rent: the amount of the enhanced rent must not exceed that of the reasonable annual rent and also must not exceed the agreed rent plus 50 per cent thereon. The reasonable annual rent in the present case was, as explained in Section 2 (f) (1), Rs. 600 per annum (Rs. 480 municipal assessment, plus 25 per cent thereon). Thus the opposite party could by a notice enhance the rent under sub-sec. (2) to a figure not exceeding Rs. 450 per annum. So long as the amount of the reasonable annual rent exceeded Rs. 450 it did not matter what it was, the opposite party could not enhance the rent to a figure above Rs. 450. In other words, if the amount of the reasonable annual rent was more than the amount of the agreed rent plus 50 per cent thereon the landlord could not fix the enhanced rent at more than the agreed rent plus 50 per cent thereon, regardless of the amount of the reasonable annual rent. Sub-Sec. (4) of Section 5 read as follows: "If the landlord or 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 etc. provided that the Court shall not vary the agreed rent unless it is satisfied that the transaction was unfair. . ." It seems to us that "annual reasonable rent" in sub-sec. (4) be read as "reasonable annual rent" as used in sub-sec. (2), Sec. 2 (1) etc. Apparently by mistake the Legislature used the words "annual reasonable rent" in sub-sec. (4) instead of the words "reasonable annual rent." 3. The cause of action for a suit by a landlord as contemplated by sub-sec. (4) is simply the inadequacy of the reasonable annual rent; all that he has to allege in the plaint, in order to make it entertainable by the court, is that the reasonable annual rent is inadequate. If he makes this allegation he can seek the relief of fixation of rent. When fixing the rent, the court is required to take into account the prewar rent, the reasonable annual rent, the prevailing rent of similar accommodation etc., vide Sec. 6. There is no difficulty in a case in which the reasonable annual rent does not exceed the agreed rent plus 50 per cent thereon; in such a case the landlord can by a suit get the rent fixed at a figure at which he would have himself enhanced it by a notice had the reasonable annual rent stood at the figure of the agreed rent plus 50 per cent thereon. Thus in the present case if the reasonable annual rent was, say, Rs. 400 the opposite party could in the suit ask the court to fix the rent on the basis that it was Rs. 450. If it was Rs. 400, by a notice under sub-sec. (2) he could not enhance the rent to more than Rs. 400, and if it was inadequate the Legislature provided him the remedy by permitting him to file a suit for fixation of rent on the ground that it was inadequate. He could not, by his notice, exceed the amount of the agreed rent plus 50 per cent but he also could not exceed the amount of the reasonable annual rent; the Legislature thought that it would be hard upon him if the amount of the reasonable annual rent happened to be inadequate for no fault of his and so provided the remedy in the shape of a suit under sub-sec. (4). (4). But, if the amount of the reasonable annual rent was already more than the agreed rent plus 50 per cent thereon, there was nothing to be gained by filing a suit at all, because regardless of its amount he could not enhance the rent to more than the agreed rent plus 50 per cent. The Legislature decided that in no case should the increase be more than 50 per cent of the agreed rent. This limit upon the right of the landlord to get the rent enhanced was to operate in every case and had nothing to do with, or did not depend upon, the amount of the reasonable annual rent; whatever might be the amount of the reasonable annual rent, he could not get the agreed rent enhanced by more than 50 per cent. In the face of this limit upon his power, the Legislature could not have permitted him to file a suit under sub-sec. (4) if the amount of the reasonable annual rent was already in excess of the limit. There must be some amount of reasonable annual rent which the landlord considered adequate; if the reasonable annual rent is already of that amount or more he has no cause of action for a suit under sub-sec. (4). If he does not allege in the suit that the amount of the reasonable annual rent is inadequate, the plaint would be returned to him under Or. VII, R. 11 C.P.C. as disclosing no cause of action. If the reasonable annual rent is already adequate, according to his own case, he cannot file a suit under sub-sec. (4) and cannot get the rent fixed at all. If, on the other hand, the reasonable annual rent is less than the amount that he considers adequate, but exceeds the agreed rent by more than 50 per cent, he cannot be in a better position than he would be in if the reasonable annual rent was at the figure that he himself considers adequate. If the reasonable annual rent, which he considers adequate, exceeds the agreed rent by more than 50 per cent, he cannot file a suit. There is no reason for saying that he can file a suit when the reasonable annual rent, which he considers inadequate, exceeds the agreed rent by more than 50 per cent. In this case the opposite party considers that Rs. There is no reason for saying that he can file a suit when the reasonable annual rent, which he considers inadequate, exceeds the agreed rent by more than 50 per cent. In this case the opposite party considers that Rs. 1,200 would be the adequate reasonable annual rent. The reasonable annual rent being actually Rs. 600 he could say in the plaint that it was inadequate, but, if it had actually been Rs. 1,200 he could not say that it was inadequate and would have no cause of action for filing the suit at all and, therefore, would not be in a position to get the rent fixed by the court at a figure higher than Rs. 450. By his own notice he could enhance the rent to Rs. 450 and, in order to get Rs. 450, he did not have to go to court at all. It would be necessary for him to go to court if he wanted more than Rs. 450, but, if the reasonable annual rent was already adequate, he could not get any relief from the court. There is no reason why he should get a relief from the court and have the rent fixed at more than Rs. 450 merely because the reasonable annual rent actually is less than Rs. 1,200. There is no rational or logical connection whatsoever between his right to get the relief of fixation of rent from the court and the fact that the amount of the reasonable annual rent actually is inadequate except that the inadequacy prevents his enhancing the rent by nature to the full extent. If the reasonable annual rent had been Rs. 1,200 and he could by a notice enhance the rent to Rs. 450 only, it would be a case of greater disparity between the amount of the reasonable annual rent and the amount to which he can enhance the rent by his own action than if the amount of the reasonable annual rent was Rs. 600 and by his own notice he could enhance the agreed rent to Rs. 450. It would be an anomalous position if he was granted a right to go to court and get the rent fixed when the disparity is small and denied the right when it is great. If the reasonable annual rent is Rs. 10,000 the opposite party cannot by a notice get more than Rs. 450. It would be an anomalous position if he was granted a right to go to court and get the rent fixed when the disparity is small and denied the right when it is great. If the reasonable annual rent is Rs. 10,000 the opposite party cannot by a notice get more than Rs. 450; to give him a right to get the rent fixed at more than Rs. 450 merely because the amount of the reasonable annual rent is Rs. 451 would be an absurdity. We are, therefore, of the opinion that the Legislature did not contemplate a suit by the land-lord under sub-sec. (4) if the amount of the reasonable annual rent exceeded the amount of the agreed rent plus 50 per cent thereon; it must have intended that the limit imposed by the proviso to sub-sec. (2) was to operate in every case and that in no case, whether the rent was fixed or enhanced under sub-sec. (2), or fixed under sub-sec. (4), could the rent be fixed at, or enhanced to a figure exceeding the agreed rent by more than 50 per cent. 4. We do not agree with Sri K.C. Saksena that it was not open to the opposite party to file a suit under sub-sec. (4) without first exhausting his powers under sub-sec. (2). There is no such condition laid down in sub-sec. (4). When the reasonable annual rent exceeds the agreed rent by more than 50 per cent he can never get, whether under sub-sec. (2) or under sub-sec. (4), more than Rs. 450 and when he can get upto Rs. 450 by a notice under sub-sec. (2) it would be unnecessary for him to file a suit under sub-sec. (4). But, in a case in which the amount of the reasonable annual rent is not more than the agreed rent plus 50 per cent thereon, it may be open to the landlord to enhance the rent upto the amount of the reasonable annual rent and then file a suit for fixation of rent by alleging that the amount was inadequate. It does not follow that he is obliged to do so and that he cannot file a suit for fixing of rent without first enhancing the rent to the maximum permitted by sub-sec. (2), 5. No question of unfairness arises in a suit by the landlord. It does not follow that he is obliged to do so and that he cannot file a suit for fixing of rent without first enhancing the rent to the maximum permitted by sub-sec. (2), 5. No question of unfairness arises in a suit by the landlord. We were referred to a number of decisions which appear to take a contrary view. In Hari Ram v. Dr. C.K.C. Misra, 1950 A.L.J.R. 416,the agreed rent was Rs. 60 per month; the reasonable annual rent was Rs. 81-4-0 per month, the landlord by a notice under sub-sec. (2) enhanced the rent to Rs. 75 and the tenant's suit for fixation of rent on the ground that the reasonable annual rent was excessive was dismissed by this Court. The facts of that case are quite different. That was a suit by a tenant. The enhancement of the rent by the landlord was within his powers and the question whether a landlord can file a suit under sub-sec. (4) or can get a decree in such a suit if the reasonable annual rent exceeds the agreed rent by more than 50 per cent thereof did not arise. Seth, J., however, when discussing the law contained in Section 5 observed at page 418: "The necessity for such a suit arises only when the landlord desires to enhance the rent beyond the `reasonable annual rent,' for if the agreed rent is below the `reasonable annual rent' the landlord may enhance it to that limit without recourse to any suit. It may be that where the `reasonable annual rent' exceeds more than 50 per cent the rent payable on the 1st day of October, 1946, the landlord may not be able to enhance the rent even upto the limit of the `reasonable annual rent' by his own unilateral act, but if in such a case the landlord institutes a suit for fixation of rent at the rate of `reasonable annual rent,' I gravely doubt whether it would be a suit for fixation of rent on the ground that the `reasonable annual rent' is inadequate. The position would be different if the object of the suit be to have the rent fixed at an amount above the `reasonable annual rent'." 6. The position would be different if the object of the suit be to have the rent fixed at an amount above the `reasonable annual rent'." 6. It seems to us that if the reasonable annual rent exceeds the agreed rent by more than 50 per cent and the landlord wants to enhance the rent only upto the amount of the reasonable annual rent he cannot file a suit contemplated by sub-sec. (4) for the simple reason that he does not allege the amount of the reasonable annual rent to be inadequate and he will be entitled to no remedy. We do not understand how he would be in a better position if he wanted to enhance the rent to a (still) higher figure than the amount of the reasonable annual rent. It would be anomalous if he was refused relief when he wanted the same amount as that of the reasonable annual rent and was granted relief when he wanted a higher amount. The observations in Girdhari Lal v. Sunder Lal, 1954 A.L.J.R. 65 are against the opposite party. The agreed rent in that case was Rs. 34 per month, the reasonable annual rent was Rs. 510 (at the rate of Rs. 42-8-0 per month), the tenant refused to enhance the rent to Rs. 51 per month and the landlord sued for fixing the rent at Rs. 51 per month. Chaturvedi, J. dismissed the suit on the ground that the landlord could enhance the rent to Rs. 51 per month himself by a notice under sub-sec. (2). He repelled the tenant's contention that a landlord in a suit under sub-sec. (4) is not required to prove that the transaction was unfair. The question that was raised before him was whether a landlord can sue under sub-sec. (4) without exhausting his powers under sub-sec. (2) or not. The reasonable annual rent there was less than the agreed rent plus 50 per cent thereon; therefore the question that arises before us did not arise in that case. Still, Chaturvedi, J. made certain observations which support the view that we take. At page 67 he observed: "This sub-section does not permit the landlord to bring a suit for the enhancement of the agreed rent, and only permits him to sue for the enhancement of the annual reasonable rent. Still, Chaturvedi, J. made certain observations which support the view that we take. At page 67 he observed: "This sub-section does not permit the landlord to bring a suit for the enhancement of the agreed rent, and only permits him to sue for the enhancement of the annual reasonable rent. But it the annual reasonable rent is really not payable by the tenant there appears to be no point in permitting such a suit to be instituted." 7. What he meant is that if the reasonable annual rent exceeds the agreed rent by more than 50 per cent it can never be ordered to be paid by the Court and sub-sec. (4) does not contemplate a suit by the landlord in such a case. He made this clear by stating further: "I am conscious of the fact that this interpretation would cause hardship in a case where the annual reasonable rent is more than 50 per cent above the agreed rent, because by his notice the landlord cannot enhance the rent to more than 50 per cent and in such a case he cannot bring the amount to the amount of the annual reasonable rent by his own act. He would, therefore, be completely barred from, bringing a suit under Sec. 5(4) of the Act. But this position appears to have been brought about by the fact that the legislature never contemplated the enhancement of rent by more than 50 per cent of the agreed rent." 8. It may not be necessary to go so far as to lay down that when the amount of the reasonable annual rent exceeds the agreed rent by more than 50 per cent the landlord cannot sue under sub-sec. (4) by alleging that it is inadequate (it can in fact be inadequate even though it exceeds the agreed rent by more than 50 per cent), but it is undoubtedly true that the Legislature never contemplated that the Court when fixing the rent in such a suit can fix it at a figure exceeding the agreed rent by more than 50 per cent. The Court may entertain the landlord's suit (because it discloses a cause of action) but will refuse him any relief on the ground that it cannot fix the rent at a figure exceeding the agreed rent plus 50 per cent thereon. The Court may entertain the landlord's suit (because it discloses a cause of action) but will refuse him any relief on the ground that it cannot fix the rent at a figure exceeding the agreed rent plus 50 per cent thereon. The suit in Jaswant Ram v. L. Kishen Chand, 1954 A.L.J.R. 220 was instituted by the landlord under sub-sec. (4) on the ground that the agreed rent was inadequate and that he was entitled to its being enhanced. The agreed rent was Rs. 32-8-0 per month and he claimed that it should be fixed at Rs. 125 per month. He did not mention the reasonable annual rent in the plaint and did not even allege that it was inadequate. Yet the suit was entertained and the Court fixed the rent at Rs. 75 per month. In the revision it was pressed upon this Court on behalf of the tenant that the landlord had not proved that the transaction was unfair, and this Court agreeing with the decision in L. Bhim Sen v. Seth Murari Lal, 1951 A.L.J.R. 657 rejected the plea and allowed the landlord to amend the plaint by alleging that the reasonable annual rent was inadequate and remanded the suit for retrial. The final order passed by this Court does not militate against anything that we have laid down. We do not know what was the amount of the reasonable annual rent in that case and the question that we are discussing was not raised in it and was not answered by the learned Chief Justice and Sapru, J. 9. The only question that was raised before Mootham, J. and Agarwala, J. in Bhim Sen v. Seth Murari Lal, 1951 A.L.J.R. 657 was whether it was imperative for a landlord suing under sub-sec. (4) for variation of the agreed rent to prove that the transaction resulting in the agreement was unfair. Mootham, J. answered the question in the negative and did not deal with any other matter, but Agarwala, J. dealt with other matters. He observed at p. 659: "This is provided for in Cl. (4). What are the powers of the Court in such a suit? There is no limit fixed so far as enhancement is concerned." 10. Mootham, J. answered the question in the negative and did not deal with any other matter, but Agarwala, J. dealt with other matters. He observed at p. 659: "This is provided for in Cl. (4). What are the powers of the Court in such a suit? There is no limit fixed so far as enhancement is concerned." 10. If the learned Judge meant that the court can fix the rent at a figure even exceeding the agreed rent by more than 50 per cent thereon, we respect-fully differ. The agreed rent in that case was Rs. 10 per month and the court fixed the rent at Rs. 24 per month. It was not contended before the learned Judges that the court had no jurisdiction to fix the rent at a figure exceeding Rs. 15 per month (Rs. 10 plus 50 per cent thereon). Agarwala, J. did not give any reasons for his dictum that "This enhanced rent is no doubt more than 50 per cent of the rent payable on October 1, 1946, but that is not a relevant consideration when the enhancement is sought by a suit under sub-sec. (4)." 11. Not only is there no discussion of the question but also the question was not raised before the learned Judges and Mootham, J. expressed no opinion on it, and though the case was decided by a bench, the dictum of Agarwala, J. cannot be said to be binding upon us. 12. The learned Civil Judge has not held that the reasonable annual rent is adequate. What he has held in the suit is that the agreed rent is inadequate. It was irrelevant whether the agreed rent was inadequate or not; the cause of action for a suit under sub-sec. (4) was the inadequacy of the reasonable annual rent. The learned Civil Judge could fix the rent only if he found that the reasonable annual rent was inadequate; if it was adequate he should have directed the opposite party to enhance the rent himself by a notice under sub-sec. (2), or at the most fixed the rent at a figure at which the opposite party could enhance it. He had no jurisdiction to fix the rent at Rs. 840 per annum as he has done. (2), or at the most fixed the rent at a figure at which the opposite party could enhance it. He had no jurisdiction to fix the rent at Rs. 840 per annum as he has done. He could go into the question of what would be the fair rent to be paid by the applicant only if he found that the reasonable annual rent was inadequate. 13. We allow this application, set aside the decree passed by the learned Civil Judge and dismiss the suit of the opposite party but without prejudice to his right to enhance the rent as permitted by sub-sec. (2) by a notice in writing. The applicant shall get his costs of this application from the opposite party, but the costs before the learned Civil Judge will be borne by the parties themselves.