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1979 DIGILAW 283 (KER)

PREMIER RUBBER CO. v. K. S. S. I. CORPORATION

1979-12-07

M.P.MENON

body1979
Judgment :- 1. Two points are raised in this revision by the defendant in a suit for arrears of rent in respect of two buildings in the Industrial Estate, Edakkal, owned by the Government of Kerala. The lease arrangement executed in February. 1962 was for two years and under paragraph (13) thereof the tenant had been given an option to renew it on fresh conditions stipulated by Government. In June, 1962 the management of the Industrial Estate was vested in the Kerala State Small Industries Corporation Ltd. In June, 1966 Government passed an order enhancing the rent by stages, to be effective from the 1st of August, 1966, 1967,1968 and 1969, for the purpose of progressively reaching the goal of "economic rent". Orders regarding the enhancement were communicated to the petitioner on 5-9 -1966, and he then filed R.C.O.P. Nos. 246 and 247 of 1967 (on 6-11- 67) under Act 2/65 for fixation of fair rent. While these petitions were pending, Government issued a notification under S 25 of Act 2/65 on 12- 6-68 exempting the Industrial Estate from its provisions. The fair rent proceedings were however continued, overruling the Corporation's objections based on the aforesaid notification, and an order was passed on 4-11-69 fixing the fair rent as Rs. 46/- p.m. The suit was filed by the Corporation on 11-6-71 for arrears of rent at the enhanced rates for the period before 6-11-67 and after 11-6-68, contending that the fair rent fixation would operate only during the period from the date of filing of the petitions to the date of the notification under S.25. 2. The trial court held that Government order of June, 1966 enhancing the rent was against the provisions of the Rent Control Act which were then applicable to the lease arrangement in question. The stipulation in the lease deed providing for enhancement of rent was therefore "void" As regards the 1968 notification exempting the buildings from the provisions of the Act, it was held that the order in R.C.O.P. Nos. 246 and 247 passed long after the notification, continued to be binding on the parties. It had not ceased to operate from 12-6-68, and the plaintiffs were also estopped from claiming anything more than the fair rent so fixed. 246 and 247 passed long after the notification, continued to be binding on the parties. It had not ceased to operate from 12-6-68, and the plaintiffs were also estopped from claiming anything more than the fair rent so fixed. The defendant's contention that the claim for arrears for the period beyond 3 years from the date of the plaint was barred by limitation was also accepted, over-ruling the plaintiff's plea that Ext. A9 letter of the defendant amounted to an acknowledgment of the liability. 3. On appeal by the Corporation, the learned Subordinate Judge felt that the fair rent fixation had ceased to have any force after the notification of 12th June, 1968 And as regards limitation, its view was that Ext. A9 dated 4-1-69 amounted to an acknowledgment of the liability within three years from August. 1966 i.e. the period from which arrears were being claimed. The appeal was accordingly allowed and the suit was decreed as prayed for. 4. It is difficult to accept the trial court's view that the provisions of paragraph (13) of the lease deed of 1962, which enabled enhancement of rent, were ab initio void and inoperative because Act 2/65 was then applicable to the Industrial Estate. The Act only forbids realisation of rent in excess of the fair rent so long as the building or the contract of lease is one coming within, its mischief. Its provisions operate on the contract to make unenforceable any claim for rent in excess of the fair rent, but it is a different thing to say that part of the contract which provided for enhancement of rent was stillborn or non est. The contract for payment of excess rent remains unenforceable during the period the statutory prohibition applies; it can operate once the prohibition is lifted. That means that after the lease arrangement was taken out of the statutory restriction by means of the notification dated 12-6-68, the plaintiff was entitled to claim the higher rate of rent stipulated. 5. As for the combined effect of the order dated 4-11-69 (fixing fair rent) and the notification dated 12-6-68, which is the first point raised by the petitioner, it appears to me that a fair rent fixation made by a competent authority under Act 2/65 could not operate for ever, notwithstanding a notification under S.25 exempting the buildings in question from the purview of the Act. The Act itself does not give any indication as to the date from which an order fixing fair rent is to be treated as operative; but in view of the decision of the Supreme Court in Miran Devi v, Birbal Dass (AIR. 1977 SC. 2191) the date of filing of the application has to be taken as the relevant date. Thus the order in R.C.O.P. Nos. 246 and 247 has to be enforced from 6-11- 67. But for how long? In a case where the provisions of the Act continue to govern the contract of lease, the fixation operates until the fair rent is re-fixed in accordance with the provisions of the Act itself. But where the Act itself ceases to apply and no re-fixation thereunder can be conceived of, it is too much to suggest that the Rent Controller's order would continue to operate for ever, totally annihilating the right of the parties to make contracts of their choice. No adjudication, much less one by a tribunal of limited jurisdiction, can have such effect. Fixation of fair rent by a Rent Control Court is only a quantification of the rent payable and receivable is accordance with the Act, irrespective of contract; and when the provisions of the Act cease to apply, such quantification also ceases to be binding on the parties. The notification under S.25 is an exercise of legislative power by executive to which such power is delegated, and the Rent Control Tribunal's . decision cannot affect its operation so as to nullify the very effect of the exemption recognised by it. 6. Counsel argues that the order R.C.O.P. Nos. 246 and 247 had become final, and that this Court cannot wipe out its effect indirectly in these proceedings. It is true that an objection was raised before the Rent Control authority that it had lost jurisdiction to proceed with the enquiry when the notification dated 12-6-68 was issued, and that the same was overruled, in interlocutory proceedings. All that was held in that order was that pending applications would not be affected by a notification which had no retrospective effect. The finality of this order remains untouched by interpreting the legal effect of the subsequent order passed on 4-11-69 fixing fair rent. All that was held in that order was that pending applications would not be affected by a notification which had no retrospective effect. The finality of this order remains untouched by interpreting the legal effect of the subsequent order passed on 4-11-69 fixing fair rent. As already noticed, this latter order only fixed the quantum of fair rent, and did not specify the date from which and the date up to which the fixation was to operate. To fix up these two limits is a matter of interpreting the order and not of over-ruling it or belittling its effect. In fact, the lower appellate court has interpreted it in one manner and it is the correctness of this interpretation that is being canvassed in revision. In that view, the argument that this Court cannot consider the legal effect of the Rent control Court's order on the principles of finality, is self-defeating 7. I am thus in agreement with the lower appellate court that the order dated 4-11-69 did not outlive the notification dated 12-6-68 and that with effect from that date, a higher rent in accordance with the contract governing the parties could be claimed by the plaintiff. 8. The second point relates to limitation, and here too, I find myself in agreement with the lower appellate court. What the petitioner-defendant had stated in Ext. A9 was that though a dispute regarding the quantum of arrears was pending before court, he would pay up the arrears "as demanded" after the proceedings were over, This amounted to an acknowledgment of the liability in writing made within the period of limitation, with the legal consequence of extending that period. Construing more or less a similar letter written by another tenant of the same Industrial Estate, under similar circumstances, Khalid J. said, in S. A. Nos. 657 and 658 of 1976: "In matters relating to the construction of a document with reference to S.18 of the Limitation Act authorities are uniform that a liberal construction is to be adopted. Where the construction of a document gives rise to a doubt, then the benefit of doubt should be given to the plaintiff who makes the claim and not to the party who opposes the claim and attempts to get protection from the said claim on the question of limitation. Where the construction of a document gives rise to a doubt, then the benefit of doubt should be given to the plaintiff who makes the claim and not to the party who opposes the claim and attempts to get protection from the said claim on the question of limitation. S.18 of the Limitation Act is clear in its phraseology used; namely "an acknowledgment of liability in respect of such property or right." This expression means not the acknowledgment of payment of any amount but the acknowledgment of the liability to pay the amount. The liability of the tenant in this case-admitted tenant-is to pay the rent that is legally payable. If the fair rent is rent legally payable, then the acknowledgment applies straightaway. Since the denial is of the excessive demand made while admitting the relationship between landlord and tenant, it is not difficult to see in Exts. A9 and All an acknowledgment indirectly of the liability to pay the rent legally due. The proper construction of Exts. A9 and All would therefore be read in them an acknowledgment on the part of the appellant to pay the rent legally due from him. Since S.18 is being pressed into service to deny the right to sue, it is necessary to construe the exceptions to the said right liberally. Any particular form is not necessary for an acknowledgment. It will be open to the court to examine the document containing the acknowledgment minutely and try to find out the legal implication of the acknowledgment contained therein. On a proper construction of Exts. A9 and All, I hold that they constitute an acknowledgment of the defendant's liability to pay the rent demanded." I may add that my learned brother has also taken the same view elsewhere is the judgment, as I have taken herein, on the legal effect of a fixation of fair rent under Act 2/65 and an intervening notification under S.25, exempting the premises in question. In the result, CRP. fails and is hereby dismissed. Parties will suffer their own costs. Dismissed.