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1962 DIGILAW 120 (KER)

Kunhammad Keyi v. Premalatha

1962-04-06

C.A.VAIDIALINGAM, P.T.RAMAN NAYAR, T.K.JOSEPH

body1962
Judgment :- 1. The Petitioners are the owners of a house within the Tellicherry Municipality of which the 1st respondent entered into occupation as a tenant on 23-3-1952 on a monthly rent of Rs. 30/- and has since been in occupation. She was content to pay rent at the agreed rate till 1-7-1959. Thereafter she paid no rent with the result that the petitioners sent her a registered notice threatening her with eviction on the ground of the non-payment. Her answer to this was to make an application to the Rent Control Court under S.5 of the Kerala Buildings (Lease and Rent Control) Act (Act 16 of 1959) praying that, under the proviso to subsection (2) of that section, the fair rent of the building be fixed at Rs. 17.25, the monthly rent on the basis of which house tax for the building had been fixed by the municipality being Rs. 15/-. It was not disputed that this was the monthly rent on the basis of which house tax was fixed for the year in which the 1st respondent's tenancy commenced, and, taking the view that the proviso referred to fixed the ceiling at 15% more than this rent, the Rent Control Court allowed the 1st respondent's application and fixed the fair rent at Rs. 17.25 with effect from 1-1-1960, the date of the application. Against this order the 1st respondent appealed under S.18 of the Act praying for a refund or adjustment of the rent paid in excess for a period of three years immediately before the date of her application, that is from 1-1-1957, and the petitioners came to this court seeking a writ of certiorari to quash the order of the Rent Control Court, and a writ of prohibition to restrain the appellate authority from hearing the 1st respondent's appeal, on the ground that S.5 (2) and 8 (1) of the Act were void for offending Art.14,19 (1) (f) and (g) and 31 of the Constitution. Their petition for the purpose is now before us having been referred by the Single Judge before whom it came on for hearing to a Division Bench, and, in turn, by the Division Bench to a Full Bench. 2. Their petition for the purpose is now before us having been referred by the Single Judge before whom it came on for hearing to a Division Bench, and, in turn, by the Division Bench to a Full Bench. 2. It is the petitioners' case - and this case stands uncontradicted - that since 1954 the municipal assessment in respect of the house has been on the basis of a monthly rent of Rs. 30/-. If the current assessment, current that is at the time of the application for fixing the fair rent, and not to the assessment at the time of the letting, is to determine the ceiling under the proviso in question, the petitioners have no grievance. 3. S.5 of the Act, as it stood at the relevant time, runs (so far as is material) as follows: "5. Determination of fair rent- (1) The Rent Control Court shall, on application of the tenant or landlord of a building, fix the fair rent for such building after holding such enquiry as it thinks fit. (2) In fixing the fair rent the court shall take into consideration the property tax or house tax fixed for the building at the time of letting in the property tax register or house-tax register of the local authority within whose area the building is situated: Provided that the fair rent fixed may in proper cases be lower than but shall in no case exceed by more than 15 per cent, the monthly rent on the basis of which the property tax or house tax for the building has been fixed. (3) If there is no property tax or house tax fixed for the building or if it is not based on a rental basis or if the building is situated in an area which is not a City, Municipality, Panchayat or in any other local authority, the fair rent shall be fixed after taking into consideration the prevailing rates of rent in the locality for similar accommodation in similar circumstances during the twelve months preceding the letting. xxx The first question, to consider is whether the Bent Control Court has under-stood the proviso correctly, whether, it was right in assuming that it was the monthly rent on the basis of which tax was fixed at the time of letting that was material, as if the words "at the time of letting" appearing in sub-section (2) were to be read into the proviso so that it would read: "Provided that the fair rent fixed may in proper cases be lower than but shall in no case exceed by more than 15 per cent, the monthly rent on the basis of which the property tax or house tax for the building has been fixed at the time of letting." We think it was wrong. The proviso related to the fixing of the fair rent, and it is obvious that the point of time with reference to which it uses the words, "has been fixed" is the point of time when the fair rent is determined, which, under the ordinary rule governing legal proceedings would date back to the date when the court was moved for relief. A statute is applied not as on the date of enactment but as on the date of enforcement. Now, "has been fixed" is the present perfect tense of the passive voice of the verb, "fix", and, under the ordinary rules of grammar that tense is used to denote an action that has just been completed or to denote a past action continuing to the present. Therefore, the words, "housetax for the building has been fixed" used in the proviso can only mean "was and continues to be fixed" and cannot mean something which had been fixed but has ceased to be in force. The time of letting is a fixed past point of time, and, if that were the time of fixing to which the proviso makes reference, it would have used the past indefinite "was fixed" (not even the pluperfect "had been" since there is only one past point of time) & not the present perfect, "has been fixed." In fact if the words, "at the time of letting" were to be read into the proviso as shown above, it would be bid English. "We have written to you yesterday about this matter" is an example given in Wren's High School Grammar of the incorrect use of the present perfect tense. 4. "We have written to you yesterday about this matter" is an example given in Wren's High School Grammar of the incorrect use of the present perfect tense. 4. This characteristic quality of the present tense, namely, that when it refers to a past action it denotes an action the effect of which continues to the present, did not come up for consideration in State of Bombay v. Vishnu Ramachandra (AIR. 1961 Supreme Court page 307). There the question was whether the words, "has been convicted" appearing in a statute could attract a conviction had before the enactment of the statute. Their Lordships after referring to some English decisions which said that the present indefinite tense was used in a particular statute, not in relation to time but as the present tense of logic, to express a hypothesis without regard to time, went on to observe that the verb, "has been" which they were construing expressed a hypothesis without regard to time, and, in the particular statute, meant only "shall have been". Their Lordships did not say that, "has been" could always be read as "shall have been", and if it had been contended that a past superseded conviction, no longer in force, could be attracted by the words "has been convicted" there can be little doubt what their answer would have been. In our view, "has been fixed" cannot refer to something which was but is no longer fixed, in other words, to an assessment which has been superseded. 5. It is argued that the proviso is a proviso to sub-section (2) of the section and that therefore its subject matter must be presumed to be the same as the subject matter of that sub-section namely, "the property tax or house tax fixed for the building at the time of letting". But, although from the punctuation it would appear that the proviso is a proviso to sub-section (2), it is clear that the principal matter in relation to which it stand's as a proviso is sub-section (1). Sub-section (2) refers only to a matter which the court has to take into consideration in fixing the fair rent. It is subsection (1) that says that the Court shall fix the fair rent. Sub-section (2) refers only to a matter which the court has to take into consideration in fixing the fair rent. It is subsection (1) that says that the Court shall fix the fair rent. Sub-section (1) being the provision under which the fair rent is fixed, it follows that the provisio referring to the fair rent fixed, must relate to that sub-section rather than to the sub-section which refers to a matter to be taken into consideration in fixing the fair rent. Although the words, "in the property tax register or house tax register of the local authority within whose area the building is situated" have to be read into the proviso from sub-section (2) for the sake of completeness, there is no compulsion to read into the proviso the words, "at the time of letting" as well since, as already pointed out, the principal matter to which the proviso stands as a proviso is sub-section (1) and not sub-section (2). Even if sub-sections (1) and (2) were to be combined into one sentence by the use of the conjunction "and" between the two as suggested by the learned Advocate-General, the proviso standing as a proviso to the combined provision, still the principal matter to which the proviso relates would be the fixing of the fair rent and not the matter to be taken into consideration in fixing the fair rent so that there would still be no compulsion to read the words, "at the time of letting" as part of the proviso. 6. This plain grammatical construction we have placed on the proviso seems to us also the reasonable construction. The preamble to the Act no doubt says: "Whereas it is expedient to regulate the letting of buildings and to control the rents of such buildings and to prevent unreasonable eviction of tenants therefrom in the State of Kerala, "Be it enacted in the Tenth Your of the Republic of India as follows:-" But, the Act is a temporary Act designed to meet extraordinary conditions which it was hoped would be temporary, and it is notorious that these extraordinary conditions arose out of the grave housing shortage following upon the Second World War. By 1941 it became apparent that landlords were exploiting the situation by demanding exorbitant rents and resorting to the unreasonable eviction of tenants. By 1941 it became apparent that landlords were exploiting the situation by demanding exorbitant rents and resorting to the unreasonable eviction of tenants. The first of the successive emergency legislations which, so far as the Malabar area is concerned the present Act replaced, was the Madras (House and Rent Control) 0.1941 made under the Defence of India Rules. The present Act is therefore designed to prevent the abuses arising out of the scarcity conditions following upon the Second World War; its purpose is not to make a permanent settlement of the rents payable by tenants as from the origin of each tenancy. These are matters of which we can take judicial notice, and the provision for refund in S.8 (1) (b) of the Act on which the learned Advocate-General places so much reliance to show that the purpose of the Act is to settle rents as from the commencement of each tenancy, does not serve his argument when it is remembered that under the proviso thereto, refund is limited to a period of three years immediately before the fair rent application which, in no case, can go beyond the time when scarcity conditions began. There is no provision for payment to the landlord should the fair rent fixed be higher than the contract rent (under S.5, a landlord also may apply for the fixation of fair rent); and, even if the fair rent fixed is to be given retrospective operation from the date of commencement of each tenancy, it does not follow that the rent prevailing at the time of the letting is to determine the fair rent. The object of S.5 of the Act is avowedly to fix the fair rent, which, we take it, is the rent which a willing tenant would have paid to a willing landlord had not abnormal conditions introduced a measure of compulsion enabling landlords to force unfair bargains on tenants. (Conversely, the statutory continuance of tenancies enforced on landlords may give a tenant an unfair advantage by allowing him to remain in occupation on a rent which though fair enough during pre-war times would be too low today even if scarcity conditions did not prevail, having regard to the general fall in the value of money). Under sub-section (1) of the section, the Rent Control Court is to fix the fair rent after holding such enquiry as it thinks fit. Under sub-section (1) of the section, the Rent Control Court is to fix the fair rent after holding such enquiry as it thinks fit. Considerations such as the capital cost of the building so as to provide a reasonable return for the landlord - it is certainly not the object of the statute to discourage building - and the prevailing rates of rent in the locality for similar accommodation would enter into the computation, and, since the object is to rule out the increases brought about by scarcity conditions, the reasonable rent at the time of the letting would also be a relevant consideration so long as allowance could be made for such matters as the rise or fall in the value of money after the time of letting. Even so, the more relevant consideration would be the rent prevailing immediately before the scarcity conditions arose (S. 4 (2) (a) and (b) of Madras Act XXXV of 1949 which the present Act replaced makes the rent prevailing during the 12 months prior to the 1st April 1940 the basis) but, so long as the reasonable rent prevailing at the time of letting is only one of the considerations in fixing the fair rent and not the sale consideration, due allowance could be made for the change in conditions since the time of the letting so that no hardship would be caused. But, as we shall presently show, if it is to be the sole consideration for fixing a ceiling, the result in many cases would be anomalous and unfair. 7. We may perhaps at this stage explain why under S.5 of the Act special importance is attached to the monthly rent figuring in the house tax register of the local authority within whose area the building is situate. (We may here remark that there is an ellipsis in sub-section (2), of the section. It says that, in fixing the fair rent, the court shall take into consideration the house tax fixed for the building. But as the proviso makes it clear, it is not the tax fixed but the monthly rent on the basis of which the tax is fixed that has any bearing on the matter. True, the monthly rent entered in the tax register of the local authority can be readily worked out from the tax if the rate of taxation is known. True, the monthly rent entered in the tax register of the local authority can be readily worked out from the tax if the rate of taxation is known. But the rate and therefore the multiple may vary from place to place and from time to time. In any case the tax signifies nothing; it is the monthly rent on the basis of which the tax is fixed that matters). It is because this is a ready and a reasonably accurate means of finding out what rente the building can reasonably be expected to fetch. Under S.82 of the Madras District Municipalities Act which governs the matter so far as the present case is concerned (and which is illustrative of the provisions in the enactments governing other local authorities) the annual value of a building on the basis of which tax is assessed is the gross annual rent at which the building may reasonably be expected to let from month to month or from year to year. This annual value is fixed after due enquiry and therefore it is reasonable to assume that the value so fixed by a statutory authority represents the rent at which the building may reasonably be expected to let. When the value fixed is too high the owner of the building, namely, the landlord, would naturally complain since the tax levied on him would be correspondingly high; and he Can obtain redress by an appeal. If it is too low, it would be something in which the landlord has acquiesced to his advantage in the shape of a lower tax so that there would be nothing improper or unfair in holding him to that value. No doubt one does not ordinarily expect a person to complain against a low assessment, but if, in fact, the municipal assessment is too low, a landlord could readily have it corrected. But, if he acquiesces in it to his advantage, and, for the purpose of taxation is content with a low assessment of the rent, there is perhaps nothing wrong in asking him to be content with that low assessment for the purpose of collection from the tenant. The municipal assessment is thus a fair and ready means of discovering what is the reasonable rent for a building at any particular time. 8. The municipal assessment is thus a fair and ready means of discovering what is the reasonable rent for a building at any particular time. 8. Having regard to these considerations the argument advanced on behalf of the petitioners that to fix a ceiling on the basis of an order made by an executive authority amounts to a deprivation of property offending Art.19(1)(f) and 31 of the Constitution (an argument which would equally avail even on our construction of the proviso, a construction against which the petitioners have no complaint) does not appeal to us. It forgets that the assessment, though made by an executive authority, is made after due enquiry, that the citizen affected has a right of appeal, and, what is more important in cases like the present where the complaint is that the assessment is too low, that it is something in which he has acquiesced to his advantage. We do not think that the following observation of Mahajan, J. in Thakur Raghubir Singh v. The Court of Wards, Ajmer and another (1953) Supreme Court Reports page 1049 at page 1055, on which reliance has been placed on behalf of the petitioners has any application whatsoever: "When a law deprives a person of possession of his property for an indefinite period of time merely on the subjective determination of an executive officer, such a law, can, on no construction of the word "reasonable" be described as coming within that expression because it completely negatives the fundamental right by making its enjoyment depend on the mere pleasure and discretion of the executive, the citizen affected having no right to have recourse for establishing the contrary in a civil court.” 9. Now to go back to the anomalous and unreasonable results that would follow upon the construction placed by the Rent Control Court on the proviso in question, a construction which is supported by the learned Advocate-General, and, of course, by counsel for the 1st respondent. By that proviso, the fair rent fixed may be lower but shall in no case exceed by more than 15 per cent the monthly rent on the basis of which the property tax or house tax for a building has been fixed. By that proviso, the fair rent fixed may be lower but shall in no case exceed by more than 15 per cent the monthly rent on the basis of which the property tax or house tax for a building has been fixed. If this monthly rent is the monthly rent at the time of the letting (which it has been assumed on all hands means the time of the letting to the particular tenant in question, not the time of the first letting) it would follow that the maximum rent is conclusively determined by the rent prevailing at a point of time which has no relevance whatsoever to the object of the statute. As we have already stated, the object of the statute is to relieve against unreasonable increases in rent following upon the abnormal conditions created by the Second World War, not to clamp the rents down to what was prevailing at the origin of each tenancy. A relevant consideration for conclusively determining the maximum rent might be the rent prevailing in 1939, just before the war broke out. But it cannot be the rent prevailing when each tenancy began. By way of example (and the example is not a mere theoretical possibility - there must be numerous cases approximating to it) take the case of two twin houses situated side by side, built at the same time and at the same cost, identical in every matter which has the least relevancy in determining what should be the fair rent, but belonging to different persons. Supposing both were let at a monthly rent of Rs. 50/- in 1939, this being the rental value as entered in the municipal assessment for the year. The rent of both is raised to the same extent from time to time until in 1960 each is fetching a rent of Rs. 150/-, this being the rent entered in the municipal register. In one house the same tenant has been in continuous occupation. But, in the other, there is a change in 1960. The rent of both is raised to the same extent from time to time until in 1960 each is fetching a rent of Rs. 150/-, this being the rent entered in the municipal register. In one house the same tenant has been in continuous occupation. But, in the other, there is a change in 1960. Both tenants apply for the fixation of fair rent, and, after the due enquiry enjoined by sub-section (1) of S.5 of the Act, after taking into consideration the tax fixed (in truth the rent on which the tax is fixed) at the time of the letting as required by sub-section (2), the Rent Control Court comes to the conclusion that the fair rent for both would be Rs. 100/- (Ex hypothesi there could be no question of the fair rent for the two being different). In the case of the house in which there has been a change in the occupant, this, namely, Rs. 100/- would be the fair rent fixed. But, in the case of the building where there has been no change, the fair rent would have to be fixed at Rs. 57.50 having regard to the upper limit prescribed by the proviso. This would be a discrimination against persons similarly situated. It would have no bearing whatsoever on the object of the statute. 10. It might be asked why, if the proviso refers to the assessment, in other words, to the reasonable rent as at the time of the determination, it should permit a rent 15 per cent in excess of the assessment. But then it is to be remembered that the proviso only fixes the upper limit and expressly states that the rent fixed may be lower. Municipal assessments are made only once in five years, and in fixing the ceiling it might have been thought desirable to allow for some adjustment for improvements or other changes. 11. Not only do we think that the construction we have placed on the proviso is the grammatical and the reasonable construction, but we fear that the other construction would imperil the proviso itself as offending Art.14 of the Constitution. 12. 11. Not only do we think that the construction we have placed on the proviso is the grammatical and the reasonable construction, but we fear that the other construction would imperil the proviso itself as offending Art.14 of the Constitution. 12. We hold that the construction placed by the Rent Control Court on the proviso in question is wrong and that the court erred in fixing the fair rent at 15 per cent above the rent as assessed in the municipal register at the time of the letting without making the due inquiry enjoined by subsection (1) of S.5 of the Act. 13. It has been argued on the strength of the Supreme Court decision in Satyanarayana v. Mallikarjun (AIR. 1960 S.C.137) that an error which can be exposed only after an involved process of reasoning is not an error apparent on the face of the record and that therefore, even if it be that the Rent Control Court committed an error of law, the error is not one amenable to correction by certiorari. But we do not think that the application of the simple rules of grammar - and all the grammar necessary for this case can be found in the elementary text book to which we have already made reference - is an involved process of reasoning. 14. So far as the appeal instituted by the 1st respondent is concerned, it is not disputed that the appellate authority has jurisdiction to hear and determine the appeal, whether the construction which the 1st respondent would place on S.8 of the Act be right or wrong and whether that section itself be valid or void. That being so, there is no ground for the issue of a writ of prohibition although we might observe that it would appear from a reading of S.5 and 8 that all that the Rent Control Court has to do is to determine the fair rent and that it is not for it to fix the point of time from which the fair rent as so determined is to operate. For that the statute itself makes the provision in the shape of sub-section (1) of S.8. 15. We think that the order of the Bent Control Court has to be quashed and accordingly we quash it. (Of course this means that the subject matter of the appeal has disappeared). For that the statute itself makes the provision in the shape of sub-section (1) of S.8. 15. We think that the order of the Bent Control Court has to be quashed and accordingly we quash it. (Of course this means that the subject matter of the appeal has disappeared). It will now be for that court to hear and determine the 1st respondent's application afresh having regard to the provisions of S.5 as we have explained them. 16. We make no order as to costs.