D. R. PUTTANNA v. HINDUSTAN AERONAUTICS LTD. — 1970 DIGILAW 180 (KAR)

( 1 ) THIS revision petition under S. 50 of the Mysore Rent Control Act, 1961, is directed against the order dated 23rd October, 1967, made in HRCA. No. 2 of 1966 by which the learned First Additional District Judge, Bangalore, has reversed the decision of the Rent Controller, Civil Station, bangalore. ( 2 ) THE facts leading to this petition may briefly be stated: ( 3 ) THE petitioner is the owner of the premises bearing No. 10, Ali askar Road, Civil Station, Bangalore. The fair rent for the premises was once fixed at Rs. 202 by the Controller in HRCFR. 60 of 1954 and the same was enhanced in an appeal to Rs. 211 per month, with effect from 24-11-1954. The property tax assessment at that time was Rs. 3,000. ( 4 ) THE premises fell vacant on 15-8-61. The landlord while intimating the vacancy to the Controller, sought two months' time to make some improvements and renovations to the premises. Before the expiry of the time granted, on 7-10-1961, he came with an application under S. 5 (1) of the Mysore House Rent and Accommodation Control Act, 1951 (shortly the act), for enhancing the fair rent from Rs. 211 to Rs. 600 per month. His claim was primarily based on the fact that the rental value of the premises had been increased from Rs. 300 to Rs. 600 per month. In support of his contention, he produced a copy of the bill issued from the Corpn. of the City of Bangalore. For his application none was made a party as admittedly, the premises was then vacant. The Controller, after enquiry, passed an order dated 31-3-1962 fixing the fair rent for the premises at Rs. 450 per month. On appeal, the District Judge set aside that order and remanded the case with a direction that the present respondent, who, by that time, was occupying the premises as a tenant should be added as a party. 4. After remand, the landlord examined himself and two other witnesses. The tenant did not examine any witness. ( 5 ) THE Controller while taking into consideration the enhanced rental value of the premises, increased the fair rent to Rs. 600 per month with effect from the date of the application. 4. After remand, the landlord examined himself and two other witnesses. The tenant did not examine any witness. ( 5 ) THE Controller while taking into consideration the enhanced rental value of the premises, increased the fair rent to Rs. 600 per month with effect from the date of the application. On appeal by the tenant, the learned district Judge, has reversed the order of the Controller, holding that the revision of the property tax assessment was got manoeuvered by the landlord for his own benefit and therefore it was invalid. He, however, held that the annual rental value of the premises to be estimated by the corporation can exceed its fair rent. He, therefore, ordered that the rent for the premises should continue to be at Rs. 211 only. The landlord challenges the correctness of this decision in the above revision petition. ( 6 ) THE principal contention of Mr. H. B. Datar for the landlord is that the Rent Controller has no jurisdicion to question the validity of the property tax assessment as entered in the book of the Corporation. But the learned Advocate General for the tenant submitted that the property tax assessment of any premises cannot exceed its fair rent and the enhancement of assessment in question, is a self-inflicted one by the landlord and must not be the basis for enhancing the fair rent. ( 7 ) IN order to appreciate the rival contentions, it is necessary to set out first the relevant provisions of S. 5 (1) of the Act. "5. ( 7 ) IN order to appreciate the rival contentions, it is necessary to set out first the relevant provisions of S. 5 (1) of the Act. "5. Lawful increase of or addition to or reduction in fair rent In what cases admissible.- (1) When the fair rent of a house has been fixed under S. 4, no further increase in such fair rent shall be permissible except in cases where some addition, improvement or alteration has been carried out at the landlord's expense and if the house is then in the occupation of a tenant, at the request of such tenant, or the rental value as entered in the property tax assessment book of the local authority has been increased: provided that an increase in fair rent under this sub-section shall be fixed having regard to the said increase in the rental value, and in the case of any addition, improvement or alteration, not exceeding six per centum per annum, on the cost of such addition, improvement or alteration, and it shall not be chargeable until such addition, improvement or alteration has been completed. " ( 8 ) IN the instant case, the additions and improvements to the existing structure are not at issue. The landlord has based his claim solely on the increase of the rental value of Rs. 300 to Rs. 600 per month. ( 9 ) THE finding of the learned District Judge that the rental value of the premises was an inflated one got done by the landlord is finding of fact arrived on the appreciation of the facts and circumstances of the case. I have no reason to disagree with his conclusion. The tenant might not be in a position to produce any independent evidence to prove his contention but he is entitled to ask the Court to draw an inference on the proved facts and circumstances, and, that is what has been done by the learned District Judge. The reasons to support that finding are not far to seek. The learned District Judge has elaborately considered this aspect. It is unnecessary for me to repeat them. To state in laconic details, they are as follows: ( 10 ) THE landlord while submitting a vacancy report to the Controller wanted two months' time for effecting some improvements and renovationd to the premises. The learned District Judge has elaborately considered this aspect. It is unnecessary for me to repeat them. To state in laconic details, they are as follows: ( 10 ) THE landlord while submitting a vacancy report to the Controller wanted two months' time for effecting some improvements and renovationd to the premises. Without doing that, he thought of any easy alternate method for enhancing the fair rent. PW. 2 the Corporation Revenue Inspector with the Assistant Revenue Officer, without any notice to the landlord, visited the premises when it was vacant. Ext. P-6 is the order enhancing the rental value, primarily based on the expectation of the landlord to get a rent of Rs. 600 per month. This revision of property tax was not in the course of general revision, nor was it based on the actual rent of the premises. The fair rent of the premises was Rs. 211 and the previous tenant was paying only that rent. How the landlord could hope to get a sum of rs. 600 per month as rent to such a premises, is beyond one's imagination. The landlord seemed to have gladly accepted the sudden jump of the annual rental value from Rn. 3. 000 to Rs. 6,000. The order raining the assessment was passed on 30-10-1961 and it was given effect to from 1-10-1961. The landlord without challenging it in an appeal, rushed to the Rent Controller for enhancement of the fair rent. On these facts, one cannot escape the inevitable conclusion that it was got done by the landlord to create an evidence for enhancing the fair rent for bis self aggrandisement. ( 11 ) THE contention of Mr. Datar is that it is not own. to the authorities constituted tinder the Act to go behind or question the validity of the property tax assessment as entered in the book of the Corporation. In support of his contention, he also relied upon the decision in Keshawdas vadhunal, Advani. v. Murtaza Ali Khan, AIR 1953 All. 82. The facts of this case are clearly distinguishable from the instant case and cannot therefore be of any assistance to the petitioner. In support of his contention, he also relied upon the decision in Keshawdas vadhunal, Advani. v. Murtaza Ali Khan, AIR 1953 All. 82. The facts of this case are clearly distinguishable from the instant case and cannot therefore be of any assistance to the petitioner. In that case the plaintiff sued for fixation of annual reasonable rent under S. 5 (4) of the U. P. (Temporary) Control of Rent and Eviction Art. The plaint did not challenge the annual rental value assessed by the Municipal Board, in other words, the annual reasonable rent assessed by the Board, While considering the scope of the suit, ghulam Hasan, J. , observed at page 83 as follows: "the case, therefore, did not fall within the first portion of sub-sec. (4 ). It clearly fell within the second portion because the agreed rent was alleged to be higher than the annual reasonable rent and it was sought to be varied because the transaction was unfair. Keeping this d'stinction clearly in view it follows that the Munsiff had no jurisdiction to examine the correctness or the propriety of the assessment by the Municipal Board and all that the Court was required to do was to determine whether the transaction was unfair. ' in the instant case, the landlord wants to rely upon the enhancement of the property tax assessment, the genuineness of which is disputed by the tenant. It is a piece of evidence, the legality of which could certainly be gone into by the authorities called upon to rely upon it. ( 12 ) I will now come to the contention that the property tax assessment of the premises cannot exceed its fair rent fixed under the Act. In order to appreciate this contention, one must look into the provisions of s. 100 (2) of the City of Bangalore Municipal Corporation Act, 1949, under which the property tax assessments are made. S. 100 (2) reads as follows:"100. In order to appreciate this contention, one must look into the provisions of s. 100 (2) of the City of Bangalore Municipal Corporation Act, 1949, under which the property tax assessments are made. S. 100 (2) reads as follows:"100. Method of assessment of property tax- x x x x x (2) The annual value of buildings shall be deemed to be the gross annual rent at which they may at the time of assessment reasonably be expected to let from month to month or from year to year, less a deduction in the case of buildings only of 16 2/3 per cent of such annual rent and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever: x x x x x" (The proviso is omitted as unnecessary ). The crucial words are "gross annual rent at which they may at the time of assessment reasonably be expected to let from month to month or from year to year". A similar provision found in S. 127 (a) of the Calcutta Corporation act, 1923, came for consideration before the Supreme Court in the Corporation of Calcutta v. Smt. Padma Devi, AIR 1962 SC 151 . In that case, the question arose whether the Municipal Corporation had the power to fix the annual valuation on a figure higher than the standard rent. It was held that on a reading of the provisions of S. 127 (a) of the Calcutta Municipal act, 1923, the rental value could not be fixed higher than the standard rent under the Rent Control Act. It was further held that the expression "gross annual rent at which the land or buildings might at the time of assessment reasonably be expected to let from year to year" in S. 127 (a), implied that the rent which the landlord might realise if the house was let, was the basis for fixing the annual valuation of the buildings. The ratio of this decision is fully applicable to the instant case as receipt of rent higher than the fair rent is also prohibited under the Mysore Rent Control Act (see section 6 (1) of the Act ). ( 13 ) IN Patel Gordhandas Hargovindas v. Municipal Commissioner, ahmedabad, AIR. 1963 SC. 1742, it was held that there are three modes of determining the annual or rateable value of lands or buildings. ( 13 ) IN Patel Gordhandas Hargovindas v. Municipal Commissioner, ahmedabad, AIR. 1963 SC. 1742, it was held that there are three modes of determining the annual or rateable value of lands or buildings. The first is the actual rent fetched by the land or buildings where it is actually let. The second is, rent based on hypothetical tenancy where it is not let, and the third is by valuation based on capital value from which the annual value has to be found by applying a suitable percentage, where either of the first two modes is not available. The principles enunciated in the above two decisions have been followed in the recent judgment of the Supreme Court in The Bombay Municipal corporation v. The Life Insurance Corporation of India, Bombay, AIR 1870 SC 1584 wherein it was observed that the amount of educational cess levied by the corporation can be added to the standard rent for purpose of valuation and the building can well be said to be reasonably expected to be let from year to year at the figure arrived at by adding the permitted increase to the standard rent. ( 14 ) MR. DATAR, however, submitted that under S. 5 (1) of the Act, the landlord can get the fair rent raised by an amount equivalent to the increase in the property tax assessment made by the Corporation. A similar contention was raised but repelled by the Supreme Court in The Corporation of Calcutta v. Padma Devi (2 ). This is what Subba Rao, J. , as he then was observed at page 155:"it is said that, as under S. 9 (1) (b) of the Rent Control Act the the landlord can get the standard rent raised by an amount equivalent to the increase in taxes, rates or cesses, there would not be any prejudice even if the annual value of the building is fixed on the basis of a rate of rent higher than that permissible under the said Act. But this reasoning would land us in a vicious circle and would enable one to circumvent the provisions of the Rent Control Act, for though a tenant is not liable under an Act to pay a rent higher than the standard rent, by this process he would be compelled to pay a higher rent On the other hand, the scope of that section can legitimately be confined to situations giving rise to increase of taxes such as the increase in the rate, etc. " ( 15 ) IN the present case, admittdely, the actual rent of the building in question is Rs. 211 per month which was the fair rent fixed under the act. There is no proof of increase in rates and taxes. The assessment was enhanced solely on the expectation of the landlord to get a monthly rental of Rs. 600. Under the Act, he is prohibited from taking anything in excess of the fair rent of the premises. Therefore, I hold that the rental value for the property tax assessment of any building cannot exceed its fair rent and that would be the maximum rent at which the premises could reasonably be expected to let at the time of the assessment within the meaning of S. 100 (2) of the City of Bangalore Municipal Corporation Act, (Mysore act No. 69 of 1949 ). The impugned assessment is therefore, not only arbitrary but invalid and cannot form the basis for enhancing the fair rent. In the result, the revision petition fails and is dismissed with costs. --- *** --- .