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2000 DIGILAW 90 (KER)

Mathew Mathew v. Bhaskaran

2000-02-09

A.R.LAKSHMANAN, D.SREEDEVI

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JUDGMENT A.R. Lakshmanan, J. 1. This Original Petition was referred by J. B. Koshy, J. by passing the following reference order: "Question raised in this Original Petition is regarding clarification of the decision in Issac Ninan v. State of Kerala, 1995 (2) KLJ 555 , wherein the Division Bench of this Court has struck down S.5 of the Kerala Buildings (Lease and Rent Control) Act, 1965. Petitioner contends that despite the observations and striking down of the section, Rent Control Court can determine fair rent. Since the matter involves interpretation of the Division Bench decision, I am of the view that this matter should be considered by a Bench of this Court. Hence I adjourn the matter to be placed before the Honourable the Chief Justice for appropriate orders. Since the party in person is appearing, the party submits that this may be posted on 25-10-1999." 2. In the Original Petition the petitioner has impleaded only the Rent Control Court, Ernakulam and not the other parties, who are respondents 1 and 2 before the Rent Control Court. Since their presence is necessary for an effective adjudication of the grounds raised in the Original Petition, we suo-moto impleaded them as respondents 2 and 3 and also the State of Kerala, represented by the Chief Secretary as the 4th respondent. 3. The petitioner filed the Original Petition to declare that the judgment in Issac Ninan v. State of Kerala, 1995 (2) KLT 848 : 1995 (2) KLJ 555 , does not prevent the Rent Control Court from determining "fair rent" in other cases. A prayer for mandamus to compel the Rent Control Court to exercise its jurisdiction to determine "fair rent" on the application of the petitioner was also prayed for. Along with the Original Petition, the petitioner filed Exhibit P1, which is an application under proviso to S.4(5), S.5 and S.30(1) and 30(2) of the Kerala Buildings (Lease and Rent Control) Act, 1965 hereinafter referred to as "the Act", and Exhibit P2, the order passed by the Additional Munsiff of Rent Control Court, Ernakulam dated September 14, 1999 dismissing the Rent Control Application in view of the ruling reported in 1995 (2) KLT 848 . The said order reads thus: "This is a petition filed for fixation of fair rent by the petitioner/tenant. He was heard. The said order reads thus: "This is a petition filed for fixation of fair rent by the petitioner/tenant. He was heard. In view of the ruling reported in 1995 (2) KLT 848 , the power to fix fair rent is there only with respect to a building re-constructed as per S.11(4)(iv) of the Act. S.5 of the Act is not there in the statute at present in view of the aforesaid ruling. Sections 4(5) and 30 of the Act quoted in this I.A. are not attracted in this case. Hence this application is not maintainable. In the result, this application is dismissed. Pronounced in open Court on 14-9-1999. Sd/- R. Narayanan, Add. Munsiff, R.C.C.". 3. The petitioner/party in person is an Advocate. It is his case that the decision of the Division Bench, comprising of K.T. Thomas, Ag. C.J. (as he then was) and K. S. Radhakrishnan, J., reported 1995 (2) KLT 848 at best rendered invalid S.5 of the Act only as applied to that case and that S.5 is not rendered invalid as applied to other litigants who apply for determination of "fair rent". According to him, the Rent Control Court refused to assume jurisdiction to proceed to determine "fair rent" on the application of the petitioner on the mistaken view as to the effect of the decision in 1995 (2) KLT 848 ; the mistaken view is that S.5 of the Act is completely struck down and rendered totally inoperative by the said decision and that the Rent Control Court is devoid of power to fix "fair rent" under S.5 of the Act and therefore that the application for determining "fair rent" is not maintainable. It is further submitted that the Rent Control Court adhered to this view even in the face of the argument that the above decision at best rendered invalid S.5 of the Act only as applied to that case and that S.5 is not rendered invalid as applied to other litigants seeking determination of "fair rent". It is further submitted that the Rent Control Court adhered to this view even in the face of the argument that the above decision at best rendered invalid S.5 of the Act only as applied to that case and that S.5 is not rendered invalid as applied to other litigants seeking determination of "fair rent". It is also submitted that S.5 of the Act, which empowers the Rent Control Court to determine "fair rent" on the application of tenant or landlord, can operate independently of S.6, 8, or S.17(2) of the Act and that an important Section of a Statute like S.5 of the Act, which can operate independently of other Sections of the Act, cannot be deemed struck down completely in the absence of specific independent and valid reasons directed at that Section invalidating it. It is also further submitted that Issac Ninan v. State of Kerala had no occasion to consider the question of "fairness" as to the deductibility from "fair rent" of repair charges incurred by the tenant, in conjunction with the opportunity for the landlord for recovering cost of construction and profits under the aforesaid standard for determining "fair rent". It is, therefore, submitted that the decision reported in 1995 (2) KLT 848 at best rendered invalid S.5 of the Act as applied to the parties in that case and did not render invalid S.5 as applied to other litigants who seek determination of "fair rent" and, therefore, that the Rent Control Court is not prevented by the said decision from entertaining and proceeding to determine "fair rent" at the instance of other litigants - tenants, landlords, etc. 4. The petitioner, because of his continuing health problem, has stated that he was prevented from appearing in Court and, therefore, he enclosed two copies of his final arguments in the Original Petition for due consideration before the Original Petition is disposed of. He requested that the Original Petition may be disposed of expeditiously as it is important that law is certain as far as can be and the meaning of S.5 of the Act and the effect of the decision reported in 1995 (2) KLT 848 may not be left uncertain. 5. We have perused the written submissions, which is the re-production of the averments in the Original Petition. 5. We have perused the written submissions, which is the re-production of the averments in the Original Petition. The following five grounds have also been urged in the written submission: "a) S.5 is an important section of the Act which can operate independently of other sections of the Act and is therefore severable from other sections of the Act. (b) Such section of the statute cannot be struck down totally unless the validity of the section has been specifically and distinctly challenged before this Court, and sufficient reasons given in support thereof, and the court must have made a finding that the reasons given for the challenge are sufficient and valid so as to permit totally striking down the section. The S.5 has not been specifically challenged, nor sufficient reasons have been given to invalidate S.5 of the Act. Issac Ninan v. State of Kerala was essentially a case considering the propriety and fairness of the deductibility of repair charges from 'fair rent' as permitted under S.17(2) of the Act, when the landlord, whose duty it was to repair, did not cooperate. The case did not present a standard for fixing fair rent as stated on page 1 hereof, and the court therefore had no occasion to consider the fairness of "deductibility" of repair charges from fair rent under S.17(2) in conjunction with the standard for fixing fair rent. It is not proper, I submit, to presume that the Division Bench went on to decide that S.5 which empowers the Rent Control Court to fix 'fair rent' is so unjust as to be violative of Art.14 of the Constitution which guarantees equality and equal protection of the laws. How can that part of S.5 which empowers the Rent Control Court to fix 'fair rent' on application of tenant or landlord be unjust, or be violative of Art.14 of the Constitution? (c) Kerala Buildings (Lease and Rent Control) Act, 1965, is a beneficial legislation to protect tenants from extortion; this is very clear from the Act itself. S.29 of the Act makes a landlord punishable by fine or imprisonment if he collects as rent more than double the 'fair rent' fixed or to be fixed (See S.2(7) of the Act). (c) Kerala Buildings (Lease and Rent Control) Act, 1965, is a beneficial legislation to protect tenants from extortion; this is very clear from the Act itself. S.29 of the Act makes a landlord punishable by fine or imprisonment if he collects as rent more than double the 'fair rent' fixed or to be fixed (See S.2(7) of the Act). (d) At best, the Division Bench in Issac Ninan v. State of Kerala did not like the 'fair rent' in that case and therefore proceeded to state that fair rent mentioned in S.5 is bad as applied to that case. At any rate, it cannot be heard that the Division Bench did not like the legislature investing the Rent Control Court with the power to fix fair rent under S.5 of the Act. (e) In considering whether a section of a statute is invalid in conjunction with another section which is declared invalid, the applicable rule is that, where the former section is inextricably linked or connected with the latter section, the former section falls upon invalidating the latter section. Otherwise the validity of the former section is unaffected when the latter section is invalidated. The rule is the same when it is applied to a part of a section. That part of the former section, which is severable from the latter section which is invalidated, stands valid and operative notwithstanding the striking down of the latter section. This is supported by the decision of the Supreme Court of India in Aravali Minerals and Chemicals Industries (P) Ltd. and others v. State of Rajasthan and others, 1992 Supp. (2) SCC 239." It is submitted that that part of S.5 which empowers the Rent Control Court to fix "fair rent" on application of tenant or landlord is severable from other sections of the Act, including S.17(2). Therefore, the striking down as invalid S.17(2) of the Act does not render invalid that part of S.5, which empowers the Rent Control Court to fix fair rent. 6. A counter affidavit was filed by the second respondent in the Original Petition. Though notice was served on other respondents, there was no representation on their behalf. It is submitted in the counter affidavit that the monthly rent stipulated in Exhibit R2(a) is Rs. 6. A counter affidavit was filed by the second respondent in the Original Petition. Though notice was served on other respondents, there was no representation on their behalf. It is submitted in the counter affidavit that the monthly rent stipulated in Exhibit R2(a) is Rs. 3500/- and that the contention that the agreed rent is exorbitant and in effect extortion is false to the knowledge of the respondent, it is stated that the second respondent did not collect any advance or deposit from the petitioner since the arrangement between the parties was for a short period of three months and the petitioner did not have any complaint regarding the rate of rent and he was regularly paying it. On 21-3-1999, the petitioner gave notice intimating that the tenancy stands terminated with effect from 30-4-1999. The said notice is marked as Exhibit R2(b). There was no complaint of any sort in Exhibit R2(b) regarding rate of rent and inspite of Exhibit R2(b), the petitioner continued to occupy the building and he paid rent upto June, 1999. In view of Exhibit R2(a) the tenancy stands terminated and the petitioner is not a tenant entitled to claim fixation of fair rent. He is liable to pay damages for use and occupation of the building at the rate of Rs. 5000/- per mensem after 30-4-1999. It is further submitted that the petitioner, for the first time, raised a complaint regarding the rate of rent in his letter dated 14-8-1999, a true copy of which is produced and marked as Exhibit R2(c). The second respondent replied to Exhibit R2(c) by Exhibit R2(d), dated 1-9-1999. According to the second respondent, the petitioner is raising untenable claims under a false notion that the cost of the flat is only Rs.45000/- as stated in para 7 of Exhibit P1 and that it is common knowledge that a three bed rooms flat is Cochin is costing at any modest estimate at least Rs.7 lakhs and infact the cost of the flat paid to the builders is Rs.6,82,508/- as could be seen from the Certificate dated 14-1-1999 issued by them, true copy of which is produced and marked as Exhibit R2(e). In addition, Rs.9573.75 was spent for electrification. In addition, Rs.9573.75 was spent for electrification. According to the second respondent, the reasonable rent will be about Rs.40007-per mensem and, therefore, there is no basis for the complaint of the petitioner that the rent stipulated at Rs.3500/- per mensem is exorbitant. It is also stated that Exhibit P2 order was passed by the Rent Controller in Exhibit P1 case without notice to the second respondent and so he was not aware as to whether things happened as narrated in Para.8,9 and 10 of the Original Petition are correct. In conclusion, it is stated that the relief asked for are unsustainable and that the S.5, 6 and 8 of the Act have been struck down by this court in 1995 (2) KLT 848 and those sections are not in the Statute and therefore the first respondent -Rent Controller - is perfectly correct in his decision in Exhibit P2 that Exhibit P1 petition is not maintainable and, therefore, Exhibit P2 is not liable to be quashed for all or any of the reasons stated by the petitioner. 7. The petitioner contends that despite the observations and striking down of the sections the Rent Control Court can determine "fair rent". In the light of the decision rendered in 1995 (2) KLT 848 whether such a plea can be permitted to raise in this Original Petition is the point for determination. The Division Bench in Issac Ninan's case was considering a question of general public importance involving the constitutional validity of S.5, 6 and 8 of the Act. S.5 deals with determination of "fair rent" for a building leased to a tenant either for residential or non residential purpose. S.6 has imposed a ban against further increase of the rent from what has been fixed by the court as fair rent except in one contingency where some additions or improvements or alterations are made by the landlord to the building. S.8 has imposed a restriction on the landlord from claiming or receiving or even stipulating for payment of rent in excess of the fair rent. S.8 has imposed a restriction on the landlord from claiming or receiving or even stipulating for payment of rent in excess of the fair rent. The Division bench after considering the various aspects of the matter and the pros and cons of the relevant sections and also after referring to the rulings of the Supreme Court and the observations made therein, came to the following conclusion in Para.17:- "We have given our anxious consideration to the various contentions raised by counsel on either side. The Act, as already stated, is to regulate the leasing of buildings and to control the rent of such building in the State of Kerala. As held by the Supreme Court in Ganpat Ram v. Gayatri Devi AIR 1987 SC 2016 the Rent Control Act is a beneficial legislation, beneficial to both the landlord and the tenant. It protects the tenant against unreasonable eviction and exorbitant rent. It also ensures certain limited right to the landlord to recover possession on stated contingencies. Legislation does not confer any vested right on the tenants. As held by the Supreme Court in Inter Mohan Lal v. Ramesh Khanna (1987) 4 SCC 1 there is no presumption in all cases that the tenants are weaker sections. By lapse of time the tenants (at least many of them) doing business in commercial buildings taken on rent are far more affluent financially than the owners of the building in which they do business. Though the rent control legislation is stated to be a beneficial one, it must be reasonable just and fair. It is true that there is a presumption as to the constitutionality of the provision of a legislative enactment and the Act should be so read as to prevent it from being exposed to the vice of unconstitutionality. But the presumption will stand rebutted if the scrutiny of the impugned provision would unmistakably establish that it violates a fundamental right". The Bench has also considered the word "control" and magnitude of the reasonableness resulting from a combined operation of S.5, 6 and 8 and held that disparity between the cost of living or the rupee value in 1965 and 1995 is so massively vast it is absolutely unrealistic to act on the former for any final reckoning as for the latter. The Bench discussed this aspect of the matter in Para.22 to 25 of the judgment. The Bench discussed this aspect of the matter in Para.22 to 25 of the judgment. In conclusion, in Para.26 it is observed that the only beneficiary in the above circumstances is the building tenant and he had no investment in the building and he has no liability to bear any expenses for maintenance and repairs. The Bench also held that apart from the fact that the impugned provisions are unjust and unreasonable as they offend Art.14 of the Constitution, those provisions would offend Art.19(1)(g) also. The Bench also held that constructing buildings and letting them out for rent to tenants would also fall within the ambit of "business" in Art.19(l)(g) of the Constitution. In conclusion, the bench has opined that the prohibition contained in S.6 of the Act is an unreasonable restriction on the right to livelihood envisaged in Art.21 of the Constitution and that the ban against the landlord that he shall not receive anything in excess of the fair rent even from the willing tenant who is ready to voluntarily pay in accordance with the prevailing rate of rent in the locality is an unreasonable restriction on the right to carry on business envisaged in Art.1(1)(g) of the Constitution. At any rate, S.5 cannot stand alone without subsidiary and incidental provisions for periodical revision of the fair rent. The legislative . scheme provided through S.5, 6 and 8 is a package and are mutually dependent. One provision therefrom cannot be extricated from the other two to keep it alone alive. Accordingly, the Bench was of the opinion that the impugned provisions do not stand the test of reasonableness and accordingly S.5, 6 and 8 of the Act relating to "fair rent" were declared as ultra vires the Constitution of India and are void. 8. A close scrutiny of the above judgment would reveal that the Act is to regulate the leasing of buildings and to control the rent of such building in the State of Kerala and the Act is a beneficial legislation, beneficial to both the landlord and the tenant. The Act protects the tenant against unreasonable eviction and exorbitant rent and at the same time, ensures certain rights to the landlords to recover possession on certain contingencies. The legislation does not confer any vested right on the tenants and that there is no presumption in all cases that the tenants are weaker sections. 9. The Act protects the tenant against unreasonable eviction and exorbitant rent and at the same time, ensures certain rights to the landlords to recover possession on certain contingencies. The legislation does not confer any vested right on the tenants and that there is no presumption in all cases that the tenants are weaker sections. 9. This judgment was further explained in the recent decision of a Division Bench, comprising of P.A. Mohammed & M.R. Hariharan Nair, JJ. reported in Jan Enterprises v. Aegee Enterprises, 2000 (1) KLT 20 . The landlords are the petitioners in that case. They filed petition for fixation of fair rent in respect of the schedule building. The Rent Control Court allowed the petition and the Appellate Court did not interfere with the reduction in rent, which made the other party to approach this court with the revision. The learned counsel for the landlords submitted that the courts below did not have jurisdiction to decide the question of "fair rent" as S.5 of the Act had become inoperative as struck down. According to the respondent tenant, the Section was operative not only on the date of filing the petition, but also on the date on which the R.C.P. and R.C.A. were decided by the courts below. The Division Bench allowed the revision and dismissed the R.C.P. If is useful to refer para.3 of the order:- "When a law is declared as unconstitutional, its normal impact is that the statute has to be read as if the defective sections were not there in the Act at all. Unlike in Motor General Traders and Another v. State of Andhra Pradesh and Others, 1984 (1) SCC 222 where it was specifically held in the judgment that the striking down of S.32 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act would not affect the validity of any proceeding in which the decrees and delivery have become final, there is no mention in Issac Ninan's case that the decision will have only prospective effect. As such it has to be found that the invalidity of S.5 of the Act 2/65 is applicable to the present case also. Of course, Act 2/65 has not been struck down in its entirety and only three provisions have been struck down. As such it has to be found that the invalidity of S.5 of the Act 2/65 is applicable to the present case also. Of course, Act 2/65 has not been struck down in its entirety and only three provisions have been struck down. Nevertheless in the application of the aforesaid principle no distinction can be made between a case where it is struck down as invalid and a case where it is declared invalid in part. When a legislature makes a law contravening a fundamental right, the position is the same as if it had no power to legislate over the subject matter at all and accordingly, the declaration of the invalidity of the law goes to the root of the legislative power. The necessary corollary therefore, is that though the Act was struck down only as per judgment dated 2-11-1995 it has to be understood as meaning that the sections struck down were not in Act 2/65 ever since its commencement. The Rent Control Court had, therefore, no jurisdiction to fix fair rent even on 20-12-1989. Nor did the appellate court have jurisdiction to decide the question of fair rent on 18-8-1990. So the decisions are invalid in so far as fixation of fair rent is concerned." The above order is also an answer to the questions raised by the petitioner. Once the law is declared as unconstitutional, no court has jurisdiction to decide the case once again on the basis of the sections which were struck down as ultra vires of the Constitution of India and are void. 10. This judgment reported in 1995 (2) KLT 848 was rendered on November 2, 1995. The Government of Kerala have not taken any steps to rectify the defects and anomalies pointed out by the Division Bench. State of Kerala, which was also a party to the above judgment, has also not filed any appeal against the judgment before the Hon'ble Supreme Court of India and has allowed the judgment to be final and conclusive in so far as the provisions relating to "fair rent", i.e. S.5, 6 and 8 of the Act. The grievances expressed by the petitioner in this case is nothing but imaginary and, therefore, the petitioner is not entitled to any relief sought for in this Original Petition. The Original Petition is, accordingly, dismissed.