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1964 DIGILAW 209 (MAD)

T. P. Chakravarthy v. Union of India represented by Garrison Engineer

1964-04-24

S.RAMACHANDRA.IYER

body1964
Judgment.- The landlord of a bungalow situate in Bengali Bazaar Road, St. Thomas Mount, has filed this Civil Revision Petition against the order of the Rent Control Authorities fixing fair rent for the premises. The bungalow in question which is situate within a compound comprising an area of nearly 18 grounds was leased out by the petitioner’s father in August, 1940, to the Government of India for the occupation by any officer attached to the Military Garrison stationed nearby. The building is close to the Military Hospital, Alandur Market, a school run by a convent, Jain College and the railway station. It is abutting on the road from St. Thomas Mount to Meenambakkam. At the beginning of the tenancy, the rent stipulated was Rs. 100 per month. Five years later the landlord took out proceedings under the Madras Buildings (Lease and Rent Control) Act for fixation of fair rent and the rent was fixed by the appropriate authority at Rs. 160 per month. Subsequently the enactment of 1949 came into force. Again, the landlord applied to the Rent Controller, Poonamallee, for fixation of fair rent ; it was not his case however that after the fixation of fair rent in the year 1945 no further improvements were effected to the property. Indeed the complaint of the respondent is that even necessary repairs were not being carried out regularly. The petitioner claimed that the fair rent for the building should be fixed at Rs. 750 per month. The Rent Controller in a very careful judgment came to the conclusion that the increase in the fair rent fixed in 1946 was justified and after finding that the total cost of the building would be Rs. 67,634 and after making certain allowances for the amenities existing, he fixed fair rent at Rs. 338-17 nP. This order was affirmed on appeal ; a revision petition filed against the appelate order was unsuccessful. In this Civil Revision Petition Mr. Sriramamurthi appearing for the landlord has challenged the correctness of the fair rent on the ground that there is a fundamental error on the part of the authorities below in approaching the case. 338-17 nP. This order was affirmed on appeal ; a revision petition filed against the appelate order was unsuccessful. In this Civil Revision Petition Mr. Sriramamurthi appearing for the landlord has challenged the correctness of the fair rent on the ground that there is a fundamental error on the part of the authorities below in approaching the case. Learned Counsel has contended that the tribunals below committed a serious mistake in considering certain advantages available to the building in question as mere amenities and thereby proceeding to make allowance of only upto ten percent of the capital invested in providing for these amenities: They should have put no such limit for themselves. It was pointed out that in the building in question there are a number of electric points, fans, compound wall, well, stair cases, outhouses and above all vacant land appurtenant to the building to be enjoyed by the tenant of about 15½ acres, the capitalised cost of these items alone coming to Rs. 44,450. The authorities under the Act did advert to the existence of these features but they held that not more than ten per cent of the cost should be taken as allowance to be m?de while assessing the value of the building. This correctness of this approach is contended on the ground as not being warranted by the terms of section 4 of the Act. Section 4 provides for the determination of fair rents, the relevant portions of which runs, “Section 4 (1).- The Controller shall on application by the tenant or the landlord of a building and after holding such inquiry as the Controller thinks fit fix the fair rent for such building in accordance with the principles set out in sub-section (2) or in sub-section (3) as the case may be, and such other principles as may be prescribed. (2) (a) The fair rent for any residential building shall be at six per cent gross return per annum on the total cost of such building. (2) (a) The fair rent for any residential building shall be at six per cent gross return per annum on the total cost of such building. (b) The total cost referred to in clause (a) shall consist of (i) the cost of the construction as calculated according to such rate for such classes of residential buildings as may be prescribed less the depreciation at such rates as may be prescribed ; (ii) the market value of that portion of the site on which the residential building is constructed ; and shall include such allowances as may be made for considerations of locality in which the residential building is situated, features of architectural interest, accessibility to market dispensary or hospital, nearness to the railway station or educational institution and such other amenities as may be prescribed: Provided that such allowances shall not exceed ten per cent of the cost of the construction as calculated in the manner specified in sub-clause (1).” (rest of the section omitted as unnecessary). It is not disputed before me that the assessment of the cost of the building as well as the market value of the site occupied by it made by the authorities is correct; what is contended however is that the amenities to which I referred just now should properly go into the calculation of the cost of construction rather than be treated as mere amenities within the meaning of section 4 (2) (ii). Mr. Sriramamurthi argues that the expression “such other amenities as may be prescribed” occurring in that clause should be read ejusdem generis with the other portions of the section, like accessibility to the market, etc . and that they cannot relate to those matters which are akin to what is spent on the building itself. In this connection learned Counsel has relied on sub-clause (1) which refers to “such other principles as may be prescribed”, for ascertaining the fair rent and submitted that the advantages referred to above would come within them which should be added to the cost of the building as such. But admittedly no principles have been prescribed for the determination of fair rent as such. Under the provisions of section 4 (1) fair rent has, only, to be fixed on the basis of the cost of the building together with such allowance as amount spent on the amenities provided as can be made. But admittedly no principles have been prescribed for the determination of fair rent as such. Under the provisions of section 4 (1) fair rent has, only, to be fixed on the basis of the cost of the building together with such allowance as amount spent on the amenities provided as can be made. The question is what are the factors that have got to be taken into account for ascertaining the cost of the building. Learned Counsel in effect says that the cost of electric installations as well as the amenities provided in the shape of open space round the main building should be regarded as contributing to the cost of construction. I am, unable to agree with that contention. Electric installations and open space round the building can only be regarded as amenities provided for the convenient enjoyment of the building but they cannot be treated as parts of the building. Sub-section (2) (ii) of section 4 contemplates only cost of construction calculated according to such rate for such classes of residential buildings as may be prescribed plus the market value of that portion of the site occupied by it. A building can exist with or without these advantages. When the advantages referred to above are present, they certainly add to the convenience of the enjoyment of the building. They should properly be regarded as amenities to the building. Rule 10 of the Rules framed under the Act says: “When calculating the cost of construction in respect of a residential building, allowances shall be made for the following amenities in addition to these specified in section 4 (2).” Electric installations and existence of vacant ground appurtenant to the building are all matters coming within them. The rule itself treats them only as amenities and not as parts of the building. Therefore the allowances that can be made under those heads cannot by virtue of the proviso referred to above exceed beyond ten per cent of the cost of the construction of the building. I am unable to accept the contention of learned Counsel “for the petitioner” that “ such other amenities” referred to in section 4(2)(ii) should be read as ejusdem generis with the previously mentioned advantages. Those matters are connected with the situation of the building like, existence of open space round the building is also a similar advantage. I am unable to accept the contention of learned Counsel “for the petitioner” that “ such other amenities” referred to in section 4(2)(ii) should be read as ejusdem generis with the previously mentioned advantages. Those matters are connected with the situation of the building like, existence of open space round the building is also a similar advantage. Indeed in one sense open space round the building can even be said to be an amenity of the kind referred to earlier in the section. The word “ amenity” means pleasantness of place. Air-conditioning apparatus, tube lights, electric points, garden, overhead tank etc., would certainly be amenities in that sense. Generally in fixing the cost of a building in a locality various factors that enter into the cost to the owner besides the actual cost of construction, are taken into account. But the Act and the rules thereunder have prescribed a particular method of calculation ; the policy of the Legislature seems to be that the landlord should not be allowed to increase the rent for the building by providing too many costly amenities and thereby inflate the rent. The statute has, therefore wisely restricted the increase of allowances by reason of the amenities to ten per cent of the cost of the construction. The list of amenities provided in the section is by no means exhaustive. It is clear from the terms of the section itself that the expression “such other amenities” referred to in the section cannot be read as ejusdem generis with what has been mentioned previously and that it will comprehend all those advantages which add to the pleasantness in the enjoyment of the building. Existing improvements in the shape of vacant space round the building, electric points, etc., can only be regarded as amenities ; if they exist not more than ten per cent of the cost of the building could be allowed. This is what the Tribunals below have held. The Civil Revision Petition is, therefore, without any merits and is dismissed with costs. K.L.B. ------------ Petition dismissed.