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2007 DIGILAW 1887 (PAT)

Food Corporation Of India v. State Of Bihar

2007-12-12

CHANDRAMAULI KR.PRASAD, MIHIR KUMAR JHA

body2007
Judgment 1. The Food Corporation of India-appellant herein, is the tenant, whereas M/s Shri Bhagwati Hosiery Private Limited is the landlord, which owns godown and office block in the town of Bhagalpur. Same was given on rent to the tenant for a period of five years by agreement dated 6th of September, 1979 at the monthly rental calculated on the basis of 50 paise per sq. ft. After the expiry of the aforesaid period of tenancy, the tenant filed application before the House Controller under Section 5 of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1982, hereinafter referred to as the Act, for determination of the fair rent. The House Controller called for a report from the Executive Magistrate. The Executive Magistrate submitted his report, inter alia, stating that the rate though is Rs. 2/- per sq.ft., but in his opinion, Rs. 1.60/- shall be the fair rent. The House Controller, by order dated 16th March, 1988, fixed the fair rent at the rate of Rs. 1.15/- per sq. ft. The tenant, aggrieved by the same, preferred appeal. The appellate Court, by order dated 14.4.1994 dismissed the appeal. The tenant then preferred revision. The revisional authority, by order dated 19.6.1995, reduced the fair rent at the rate of Rs. 0.62 ½ per sq.ft. on the premise that the rent cannot be enhanced more than 25 per cent of the existing rent. The landlord, aggrieved by the same, preferred writ application before this Court, which was registered as C.W.J.C. No. 4568 of 1995 (M/s Shri Bhagwati Hosiery Pvt. Ltd. vs. State of Bihar & Ors.). A Division Bench of this Court, by order dated 14th May, 1997, set aside the order of the Commissioner and remitted the matter back for reconsideration of the revision application in the light of the order of a Division Bench of this court in the case of Saraswati Devi & Ors. vs. Commissioner of Bhagalpur Division, 1996(1) PLJR 924 . The relevant portion of the aforesaid order reads as follows: "4. In these circumstances, we allow this writ petition to the extent that we set aside the impugned order passed by the Commissioner and remit the matter back to him to consider the revision in the light of the law declared by the Division Bench of this Court in Saraswati Devis case (supra). In these circumstances, we allow this writ petition to the extent that we set aside the impugned order passed by the Commissioner and remit the matter back to him to consider the revision in the light of the law declared by the Division Bench of this Court in Saraswati Devis case (supra). It will be open to the parties to urge all contentions before him apart from the question as to the extent to which the enhancement in rent can be allowed. We also direct respondent no. 7 to deposit the rent upto date at the rate determined by the Rent Controller under the Act within a period of two months from today. If any amount has been deposited to respondent no. 2 by way of rent pending the revision before the Commissioner, the petitioner will be entitled to withdraw the case." 2. The tenant, aggrieved by the same, preferred Special Leave to Appeal No.12902 of 1997 (Food Corporation of India vs. M/s Shri Bhagwati Hosiery Pvt. Ltd.) before the Supreme Court. The Supreme Court, by order dated 30.7.1997, dismissed the Special Leave Petition. While doing so, it observed as follows: "We are unable to appreciate such an SLP being filed by a public sector undertaking as to agitate a point which on the facts of this case should not have been a matter of serious concern for a public sector undertaking. It would not be surprising if the expense incurred by the public sector undertaking in this litigation is worth the relief which is sought. Even otherwise, the decision does appear to be fair at least factually." 3. The Commissioner, in the light of the order of the Division Bench referred to above, decided the revision application and fixed the fair rent as follows: "The House Controller had fixed fair rent @ Rs. 1.15 per sq.ft. w.e.f. 11.9.87 to 22.11.91 from 23.11.91 the enhancement of rent was to be increased by 25% for every three years. Thus following this formula the rate of fair rent fixed after 25% increase after every three years is as follows: 23.11.91 to 22.11.94 @ Rs. 1.44 per sq.ft. 23.11.94 to 22.11.97 @ Rs.1.30 per sq.ft. 23.11.2000 to 22.11.2003 @ Rs. 2.81 per sq.ft. Thus following this formula the rate of fair rent fixed after 25% increase after every three years is as follows: 23.11.91 to 22.11.94 @ Rs. 1.44 per sq.ft. 23.11.94 to 22.11.97 @ Rs.1.30 per sq.ft. 23.11.2000 to 22.11.2003 @ Rs. 2.81 per sq.ft. The order passed by the appellate authority stands modified and the petitioner is directed to pay fair rent at the rates above which have been arrived at by the House Controller and also in the light of Saraswati Devi & Others vs. Commissioner of Bhagalpur Division case." 4. While passing the aforesaid order, the Commissioner took into consideration the events taking place during the pendency of the litigation. It found that the House Controller, while passing the order dated 22.12.1999, had determined the fair rent at the rate of Rs. 3.50 per sq.ft. of a property, which is located in the same premises. The subsequent event taking place during the pendency of the litigation finds incorporated in the order of the Commissioner, which reads as follows: "The House Controller vide his order dated 22.12.99 in H.C. Case No. 5/98 has determined fair rent @ Rs. 3.50 per sq.ft. for godown occupied by the S.B.I., Bhagalpur which is located in the same premises where the aforesaid disputed godowns situate. The lessor has submitted a photocopy of the letter 397 dated 31.10.2000 issued by the Chief Manager (C.A.) State Bank of India, DCM Office, Bhawesh Bhawan, Khanjarpur, Bhagalpur. This letter regarding rent of premises of regional stationary department mentions that SBI authority was pleased to accept the fixation of rent @ Rs. 3.25 per sq.ft. per month for three years from the date of the offer. The premises is located adjacent to the FCI godown under question." 5. By the said order, it did not accept the claim of the landlord for payment of interest at the rate of 18% on the rent due. However, it directed for payment of simple interest over the rent due. 6. The tenant, aggrieved by the fixation of rent as indicated above, and the landlord, aggrieved by the award of simple interest at the banks rate, preferred separate writ petitions. However, it directed for payment of simple interest over the rent due. 6. The tenant, aggrieved by the fixation of rent as indicated above, and the landlord, aggrieved by the award of simple interest at the banks rate, preferred separate writ petitions. The landlord in the writ petition besides assailing the order declining to grant interest at the rate of 18 per cent, also prayed for fixation of fair rent of the office block as also for payment of the arrears of rent of godown no. 9 between 1991 to 1996. 7. The writ application filed by the tenant has been registered as C.W.J.C. No. 3178 of 2001 (Food Corporation of India vs. State of Bihar & Ors.), whereas the writ application preferred by the landlord came to be registered as C.W.J.C. No. 8272 of 2001 (M/s Shri Bhagwati Hosiery Pvt. Ltd. vs. State of Bihar & Ors.). Both the writ applications were heard together and dismissed by judgment dated 10th January, 2007. 8. The tenant, aggrieved by the dismissal of its writ petition, filed L.P.A. No. 128 of 2007, whereas the landlord, aggrieved by the order of the learned Single Judge, has preferred L.P.A. No. 538 of 2007. Both the appeals have been heard together. 9. While dismissing the writ petition of the tenant, the learned Single Judge observed as follows: "14. It is quite apparent from the materials on record that rent fixed in the year 1988 by the House Controller was even below the rate prevalent in the area at that time, whereas, even giving the enhancement as per the revisional order, the present rate so fixed would also be lower than the rate prevalent in the area presently. In the said circumstances, there is no illegality in the impugned order with respect to the enhancement of rent at the rate of 25% after each three years, which apart from being in accordance with the prevalent rate of rent at the relevant points of time, is also necessary for preventing a Public Sector Undertaking from unnecessarily prolonging the litigation and multiplicity of the proceedings to the utter loss and harassment of the landlord, namely, the Mill for several decades." 10. While dismissing the writ petition of the landlord, the learned Single Judge observed as follows: "15. While dismissing the writ petition of the landlord, the learned Single Judge observed as follows: "15. So far as the objection raised by the Mills with regard to not fixing any rent for office block and not directing payment of rent for godown no. 9 till 31.7.1996 are concerned, the said objections have not been raised by the landlord at the time of filing of the case under Section 8 of the Act in the year 1987 nor has the landlord challenged the order of the House Controller dated 16.3.1988 in which the said matters were not considered. Hence, no such relief can be legally granted to the landlord, namely, the Mills at this stage. 16. Furthermore so far the question raised by the landlord, namely, the Mills with respect to the rate of interest is concerned, the revisional court has rightly directed in the impugned order that while paying the dues, the tenant should pay simple interest as applicable in the State Bank of India or in any other Commercial Bank as no valid material or provision of law could be placed by the landlord to show that either the said order was inadequate or there was any occasion for enhancing the same." 11. Mr. P.K. Verma, appearing on behalf of the tenant, Food Corporation of India, contends that the Commissioner, while passing the impugned order, was bound to fix the rent of the building as on the date of the application and he ought not to have taken into account the subsequent events taking place during the pendency of the litigation to fix the fair rent. He submits that it was beyond his jurisdiction and as such, same ought to have been set aside by the learned Single Judge. 12. Mr. Dvivedi, however, submits that the litigation, which commenced as back as in the year 1987 and in view of the observation of this Court, while remanding the matter, the Commissioner was under an obligation to take into consideration the subsequent events. 13. We do not find any substance in the submission of Mr. Verma. This aspect of the matter has been considered by the learned Single Judge in paragraph no. 14 of the judgment. 13. We do not find any substance in the submission of Mr. Verma. This aspect of the matter has been considered by the learned Single Judge in paragraph no. 14 of the judgment. In the peculiar facts and circumstances of the case, the learned Single Judge found that to prevent unnecessary litigation and multiplicity of the proceedings, such an order passed by the Commissioner cannot be said to be bad. We do not find any error in approach of the learned Single Judge, calling for our interference in this appeal. 14. Mr. Verma, then submits that in any view of the matter, the Commissioner ought not to have fixed the fair rent for future. The Commissioner, while passing the impugned order, had fixed the rent also for a period subsequent to the passing of his order. 15. In our opinion, it was not within the jurisdiction of the Commissioner to pass the order of fair rent for future. In that view of the matter, the direction of the Commissioner to fix the rent at the rate of Rs. 2.51 per sq.ft. from 22.11.2003 and enhancement at the rate of 25 per cent after the expiry of three years, is set aside. However, the landlord shall be entitled for rent at the rate of Rs. 2.25 per sq.ft. from 23.11.2000 till any decision to the contrary is taken by the competent authority. 16. Mr. Dvivedi, appearing on behalf of the landlord in the appeal, submits that the landlord be permitted to withdraw the writ petition itself so as to take recourse to any other remedy available to it. 17. As prayed for, application is permitted to be withdrawn with the liberty aforesaid, so also the letters patent appeal preferred by the landlord. 18. In view of aforesaid, any observation made by the learned Single Judge shall not cause prejudice to either party. 19. In the result, the appeal preferred by the Food Corporation of India is allowed to the extent indicated above. 20. In the facts and circumstances of the case, there shall be no order as to cost.