Judgment :- 1. S.5 of the Buildings (Lease and Rent Control) Act 2 of 1965 (hereinafter referred to as the Act) enables a tenant or landlord of a building to move an application in the Rent Control Court to fix the fair rent of the building occupied by the tenant. The Rent Control Court is to fix such fair rent after holding such enquiry as it thinks fit. Such an enquiry has been held in this case on the landlord's application and the tenant who had agreed to an enhancement of rent from Rs. 8/-to Rs. 14/-in 1965 has been found liable to pay a fair rent of Rs. 25/-per mensem from the date of the application, 15-3-1974. This was challenged by the tenant before the appellate authority and the revisional court without success. Thereupon the matter has been taken up to this court in Revision. 2. There is a basic error in the approach to the controversy by the Rent Control Court, the appellate authority and the Revisional Court. The one and the only reasoning found in the orders of a 1 the three authorities is that subsequent to the letting there has been revision of Municipal assessment, that the annual letting value on which the determination of property tax was based as determined for the two years immediately prior to the date of the application was Rs 300/-per mensem and that being the case the request for fixation of fair rent at Rs 25/-per mensem has to be granted. In other words if during the currency of the lease there is a revision of municipal assessment to house tax or property tax resulting in the determination of annual letting value for the purpose of such assessment at a higher figure the claim for fixing fair rent at that figure is said to be legitimate. It is the correctness of this view that is under challenge in this petition 3. The obligation of a tenant is only to pay fair rent. When once the Rent Control Court determines such rent the landlord is not entitled to claim or receive anything in excess of the fair rent. The scheme of the Act is to provide not only security to tenants from arbitrary eviction but also to prevent exploitation of scarcity conditions in urban areas by unscrupulous landlords. When once the Rent Control Court determines such rent the landlord is not entitled to claim or receive anything in excess of the fair rent. The scheme of the Act is to provide not only security to tenants from arbitrary eviction but also to prevent exploitation of scarcity conditions in urban areas by unscrupulous landlords. If landlords are free to seek enhancement of rent at their will many tenants who may not be able to meet claims for enhancement may be thrown out of the buildings occupied by them without means to find alternate accommodation, resulting in large number of such tenants having to be literally on the streets. It is as a measure of urban social peace that the scheme of regulating rent payable as well as regulating eviction is envisaged in the Act. 4. The scheme of S.5 indicates that in the case of any building which has been assessed to property tax or house tax the fair real is never to exceed by more than 15 percent the monthly rent on the basis of which the property tax or house tax of the building prevailing two years immediately before the date of the application was fixed. The proviso to S.5(2) deals with the maximum fair rent that could be fixed in an application for that purpose. This does not, of course, mean that in every case a court is to determine the maximum as fair rent to be paid by the tenant. Though the point is obvious one quite often sees Rent Control Courts determining fair rent by the simple process of adding on 15% to the monthly rent on the basis of which house tax for the building prevailing two years immediately before has been determined. When the proviso to S 5(2) specifies that the "fair rent fixed may in proper case be lower than, but shall in no case exceed by more than 15 percent" it means that the proviso fixes the outside limit. When the proviso to S 5(2) specifies that the "fair rent fixed may in proper case be lower than, but shall in no case exceed by more than 15 percent" it means that the proviso fixes the outside limit. Sub-section (2) of S 5 provides that "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." The sub-section was differently worded earlier and as it then stood it did not indicate that the fair rent was to be fixed after taking into consideration the property tax or house tax fixed at the time of letting. Construing the expression "has been fixed" in the sub-section as it then stood a Full Bench of this Court in Kunhammad Keyi v. Premalatha,1962 KLT. 366 indicated that the reference could not be to the time of letting, in which case the term would have been "had been fixed". Now that the section indicates beyond doubt that it is the time of letting which is material what has been said by the Full Bench may not have application. 5. As the sub-section stands we have the indication that the court is to take into account the property tax or house tax at the time of letting and the maximum shall not exceed by more than 15 percent the monthly rent as indicated by the house tax or property for tax for 2 years prior to the application. The court has a duty to determine the fair rent within this range. It cannot determine this by merely adding 15% to the annual letting value on the basis of the property tax or house tax for a period of two years immediately prior to the application. That will be to adopt the permissible maximum as fair rent. That was what was done by all the three authorities in the case. The Rent Control Court is also not to adopt the annual value as seen from the property tax fixed for the building at the time of letting as the fair rent, for, that is only one of the factors to be taken into account, though the basic factor. The Rent Control Court is also not to adopt the annual value as seen from the property tax fixed for the building at the time of letting as the fair rent, for, that is only one of the factors to be taken into account, though the basic factor. Sub-section (3) of S 5 gives definite indication that it is a basic factor. Where there is no property tax or house tax fixed for the building or if such tax is not based on a rental basis or if the building is situated in an area where there would be no such tax the fair rent is to be fixed after taking into consideration the prevailing rates of rent in the locality for similar accommodation in similar circumstances during the 12 months preceding the letting. This provision of sub-section (3) of S 5 that in the absence of other material it is the rate of rent with reference to the date of letting and not the date of application that is material is a pointer to the degree of relevancy of annual value on the date of letting. A Division Bench of this Court has noted that in between the annual value denoted by the house tax or property tax at the time of letting and the maximum permissible under the proviso to sub-section (2) there is a range which calls for notice and the determination of the fair rent within this range must be by reference to relevant factors. This is in the decision in Imbichamu v Imbichi Pathummabi,1975 KLT. 138. What those relevant factors are have not been enumerated by the Division Bench. But a learned single judge of this Court, as he then was, Krishna Tver J., has, in the decision in Devassy v. Joseph 1969 KLT. 541 dealt with this aspect and has concluded in Para.12 of the judgment thus: 'I emphasise that the cumulative result of the various considerations set out above Js that we are to take into consideration primarily the circumstances prevailing at the time of letting and not later developments except to the limited extent of finding out whether any increase should be given on account of fittings and furniture, gardens and improvements which do not ordinarily enter the reckoning for municipal tax purposes. One may also take due note of natural factors having an impact on rentals as distinguished from artificial factors which savour of exploitation of scarcity." 6. Enhancement of the annual letting value and consequently the house tax or property tax in the municipal assessment does not by itself enable a landlord to claim enhancement of fair rent. That is because, it is not at the volition of the tenant or with notice to the tenant that there is any such enhancement of municipal tax. Such enhancement is not a matter which the tenant can successfully object to When the house is in the occupation of a tenant who is liable to pay specified rent either under an agreement between the landlord and the tenant or by the fixation of fair rent there would be no scope for any municipal authority to determine annual letting value at a figure different from the existing rate of rent. There will be exceptions where the rate of rent agreed to between the landlord and the tenant may not reflect the real rent, as for instance in a case where a landlord lets out his building to his son or son-in-law or other near relative for a rent which may not reflect the true rent or in a case where the landlord may be an employer interested in providing accommodation to his employees honestly charging a nominal rent as an amenity to the employees In such cases the rent agreed upon between the parties need not necessarily reflect the genuine rent for the building as other considerations might have entered into the bargains though honestly. In such cases the annual letting value may have to be determined independent of the actual rent The reasonable rent at which the building may be let may then determine the rent But where there is no such scope for extraneous considerations the contract rent would represent the real bargain between the parties. It might happen that subsequent circumstances such as scarcity conditions of accommodation in the area may result in the prevailing rates of rent shooting up Even so if the tenant is protected against exploitation in the matter of rent by legislation such as the Act, the letting value of the building on the basis of which house tax could be assessed would be only the value to the owner and not value to the tenant. In other words the owner is to be assessed to house tax or property tax on the value of his house or property to him and not to the tenant. The tenant if he is free to let it out, may perhaps realise a rent higher than what he is obliged to pay to his landlord. If he were to take another similar building be might have to pay a higher rent. The annual letting value of the building to the tenant may be higher than the annual letting value of the building to the landlord. It is only the letting value to the landlord that is relevant and that should be the basis for fixing the property tax or house tax. This was so held by this court in the decision in Nataraja Gowder v. Municipal Council, 1976 KLT. 251, following the principle enunciated by the Supreme Court in Corporation of Calcutta v. Life Insurance Corporation of India, AIR. 1970 S.C.1417, Guntur Municipal Council v. Rate Payers' Association, AIR. 1971 S.C. 353 and in The Anant Mills Co. Ltd. v. State of Gujarat, AIR. 1975 SC. 1234. This Court said that in all cases where the genuineness of the rental arrangement is not in controversy and there is no circumstance to indicate that the rent received by the tenant is either inflated or deflated what the parties have agreed to pay and receive as rent would normally reflect the reasonable rent for the property. In such cases there would be no scope for enhancement of house tax or property tax for the building. Merely because just prior to the application in 1974 municipal assessment was enhanced or that the annual letting value of similar buildings would be Rs. 25/-there would be no scope for enhancing fair rent except to the limited extent contemplated in S.6 and 7 of the Buildings (Lease and Rent Control) Act. Therefore the enhancement of the annual value should not by itself have been a criterion to determine whether there should be fixation of fair rent at a rate corresponding to such enhanced annual value in the Municipal records. 7. Therefore the enhancement of the annual value should not by itself have been a criterion to determine whether there should be fixation of fair rent at a rate corresponding to such enhanced annual value in the Municipal records. 7. In the result, the orders of the Rent Control Court, appellate authority and the revisional court are set aside and the case remitted back to the Rent Control Court for disposal afresh in accordance with law and in the light of what has been said in this order.No costs. Allowed.