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2010 DIGILAW 1745 (MAD)

Prabhakaran v. K. S. Venkatachalam

2010-04-13

S.TAMILVANAN

body2010
Judgment :- 1. This Civil Revisionhas been preferred against the Judgment and Decree, dated 16.09.2008 made in R.C.A.No.553 of 2007 on the file of the learned Rent Control Appellate Authority / VIII Judge, Court of Small Causes, Chennai, modifying the order and decretal order, dated 27.07.2007 made in R.C.O.P.No.1222 of 2006 on the file of the learned Rent Controller / XIII Judge, Court of Small Causes, Chennai. 2. The revisionpetitioner and the respondent herein are the tenant and landlord respectively. The Rent Control Original Application was filed by the respondent herein under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 as amended by Act 23/1973 (herein after referred to as Act), seeking an order fixing fair rent at Rs.20,432/-per month for the schedule mentioned non-residential premises described in the Rent Control Original Petition. 3. As per the order and decretal order, dated 27.07.2007 made in R.C.O.P.No.1222 of 2006, the learned Rent Controller, after the enquiry, fixed fair rent for the rented premises at Rs.13,057/-per month to be paid by the petitioner / tenant to the respondent / landlord from 17.07.2006. Aggrieved by the said order, both the tenant as well as the landlord have preferred separate Rent Control Appeals in R.C.A.No.553 of 2007 and R.C.A.No.532 of 2008 respectively, by a common Judgment and Decree, dated 16.09.2008, the learned Rent Control Appellate Authority modified the order passed by the Rent Controller by reducing the fair rent fixed by the Rent Controller to Rs.10,690/-per month to be paid by the revision petitioner / tenant to the respondent / landlord herein from the date , as decided by the Rent Controller in the R.C.O.P. Aggrieved by which, the revision petitioner / tenant has preferred this Civil Revision Petition and the respondent / landlord has not preferred any Revision. 4. It is an admitted fact that the petitioner in the R.C.O.P is the landlord and the respondent is the tenant under him for the non-residential premises relating to the R.C.O.P. The aforesaid Rent Control Original Petition was filed under Section 4 of the Act for fixing fair rent for the rented premises. 5. Mr.G.Anbumani, learned counsel appearing for the revision petitioner submitted that the original contractual rent for the premises was Rs.4,000/-per month and the respondent / landlord had filed a petition under Section 4 of the Act, seeking fair rent at Rs.20,432/-per month. 5. Mr.G.Anbumani, learned counsel appearing for the revision petitioner submitted that the original contractual rent for the premises was Rs.4,000/-per month and the respondent / landlord had filed a petition under Section 4 of the Act, seeking fair rent at Rs.20,432/-per month. Though the revision petitioner / tenant has stated that the original contractual rent was Rs.4,000/-, the same was disputed by the respondent / landlord and there is no supporting document to show that the original contractual rent for the premises was Rs.4,000/- per month. 6. In support of the claim of fixing fair rent, the respondent / landlord has examined P.W.1, an Engineer, who inspected the rented premises and filed the report on the side of the landlord, apart from marking the documents, Exs.P.1 to P.3. On the side of the revision petitioner / tenant, another Engineer, who inspected the premises and submitted his report on the side of the tenant was examined as R.W.1. In support of the case of the revision petitioner / tenant, Exs.R.1 to R.4 were also marked. 7. The learnedRent Controller, considering the market value of the land, depreciation and other relevant factors for fixing the fair rent at Rs.13,057/-per month. On Appeal, the learned Rent Control Appellate Authority, modified the fair rent fixed by the learned Rent Controller and reduced the rent fixed by the learned Rent Controller to Rs.10,690/-. 8. Mr.G.Anbumani, learned counsel appearing for the revision petitioner / tenant submitted that the Courts below have fixed exorbitant fair rent. According to him, though the Rent Control Appellate Authority has reduced the fair rent fixed by the Rent Controller from Rs.13,057/- to Rs.10,690/-, which cannot be construed as proper rent. Learned counsel drew the attention of this Court to the copy of the fair order passed by the learned Rent Controller. For fixing the market value of the land, Ex.P.2, copy of the sale deed, dated 210. 2004 was taken into account by the Rent Controller. Learned counsel drew the attention of this Court to the copy of the fair order passed by the learned Rent Controller. For fixing the market value of the land, Ex.P.2, copy of the sale deed, dated 210. 2004 was taken into account by the Rent Controller. The property under the sale deed was executed in the year 2006, for the subsequent period, 10% increase in the price per year was added and also considering the location of the rented premises, the learned Rent Controller calculated the value of the land per ground at Rs.93,50,000/-and construction cost at Rs.374/- per sq.ft was the basis for deciding the value of the constructed portion of the premises is 256.89 sq.ft., out of the total area 312.69 sq.ft., and accordingly, Rs.1,02,772/-was calculated, depreciation of 1% was deducted for 16 years, accordingly, the monthly rent was computed by the Rent Controller at Rs.13,057/-. 9. Learned counsel appearing for the petitioner submitted that the Rent Controller could not have decided the market value of the land, based on Ex.P.2, sale deed, but should have based on the sale deed, Ex.R.2, dated 17.05.2004 marked on the side of the petitioner / tenant. Mr.G.Anbumani, learned counsel for the petitioner further contended that the Appellate Authority, without any basis, fixed the land value per ground at Rs.75 lakhs, which is not legally sustainable. Similarly, providing 5% for basic amenities is also not proper, in view of lack of amenities. According to the learned counsel for the petitioner, merely because electricity service connection was given for the premises, Court cannot decide 5% in the rental value for basic amenities. Learned counsel for the petitioner / tenant further contended, as per his calculation that the Court below could have fixed the fair rent at Rs.6,470/- per month. 10. Per contra, Mr.S.K.Chandrakumar, learned counsel appearing for the respondent submitted that the rented premises is the front portion of the ground floor in a pash area of Anna Nagar, Chennai. The property referred to in Ex.P.2, copy of the sale deed produced by the respondent / landlord is only on the back side of the R.C.O.P premises. According to him, though the market value of the land is more than the value stated in the sale deed, the learned Rent Controller decided the market value of the land less than the real marked value of the same. According to him, though the market value of the land is more than the value stated in the sale deed, the learned Rent Controller decided the market value of the land less than the real marked value of the same. Though the respondent / landlord has claimed Rs.20,432/- as fair rent, the learned Rent Controller fixed the fair rent only at Rs.13,057/-for the premises, that was let out for commercial purposes, considering various aspects as discussed earlier. According to the respondent / landlord, the fair rent fixed by the Rent Controller was a lesser amount, hence, the respondent / landlord had also filed Rent Control Appeal, however, the learned Rent Control Appellate Authority, while deciding the Rent Control Appeals filed by the petitioner / tenant as well as the respondent / landlord, reduced the market value unreasonably to Rs.75,00,000/- per ground and also modified the fair rent by reducing it to Rs.10,690/- per month from Rs.13,057. 11. It is an admitted fact that both the petitioner as well as the respondent herein had filed Rent Control Appeals, however, after the impugned common Judgment passed by the Rent Control Appellate Authority, only the petitioner / tenant has preferred this Revision, however, the respondent / landlord has not preferred any Revision. 12. According to the learned counsel for the respondent / landlord, due to personal circumstances, the respondent / landlord could not prefer any revision and pleaded for dismissal of the revision petition. .13. It is seen that the respondent / landlord, has stated in the Rent Control Original Petition, the market value of the land in the area is at Rs.1,00,02,000/-per ground, however, the revision petitioner / tenant has stated that the value of the land per ground at Rs.42,89,999/-. The land relating to Ex.R.2 is a land allotted by Housing Board and also far away from the rented premises, hence, the Rent Controller as well as the Rent Control Appellate Authority took the market value of the land relating to the sale deed, Ex.P.2. 14. The learned Rent Control Appellate Authority, considering the evidence both oral and documentary and also the report filed by the Engineers appointed by both sides, held that the petition premises is 312.69 sq.ft. 14. The learned Rent Control Appellate Authority, considering the evidence both oral and documentary and also the report filed by the Engineers appointed by both sides, held that the petition premises is 312.69 sq.ft. The tenants Engineer in his evidence and report has stated that the tenant is carrying on business in the name and style of "New Selvem Stores" in the ground floor in the third third shop belongs to the respondent / landlord. Though P.W.1, the Engineer appointed by the respondent / landlord has stated that the area of the petition premises as 349 sq.ft, confirming the view of the Rent controller, the Rent Control Appellate Authority has decided the actual area of the premises, out of an extent of 312.69 sq.ft. As discussed earlier, the property relating to Ex.R.3, sale deed is in respect of land allotted by Tamil Nadu Housing Board and which is situated 4 street away from the petition premises, as per the findings of the learned Rent Control Appellate Authority. As per the findings of the learned Rent Controller as well as the Rent Control Appellate Authority, the land relating to Ex.R.3 is not similar to that of the land of petition premises. As per the impugned order, it is seen that the Rent Control Appellate Authority has held that the petition building is situated in Anna Nagar, F-Block, I Street and it has been clearly stated that the said premises is having locational advantages such as Valliammal College, BSNL Office, Sinthamani Supermarket, Kandaswamy Naidu College, Indian Overseas Bank, Roundana, Hotel, Hospital and other commercial establishments, which is not in dispute. However, the Rent Control Appellate Authority reduced the market value of the land at Rs.75,00,000/-, which is only in favour of the petitioner / tenant, hence, he cannot raise the plea that the market value of the land is fixed arbitrarily by the Rent Control Appellate Authority. 15. According to the learned counsel appearing for the revision petitioner / tenant, the market value of the land fixed by the learned Rent Control Appellate Authority at Rs.75 lakhs is not directly based on any document. 15. According to the learned counsel appearing for the revision petitioner / tenant, the market value of the land fixed by the learned Rent Control Appellate Authority at Rs.75 lakhs is not directly based on any document. Though the learned counsel appearing for the petitioner argued that the said value of the land was fixed arbitrarily at Rs.75,00,000/-, without any basis, it is based on Ex.P.2, sale deed, however, the market value has been reduced by the Appellate Authority only in favour of the petitioner / tenant, hence, the lesser value fixed by the Rent control Appellate Authority cannot be construed as prejudicial to the petitioner / tenant. The plea of the respondent / landlord is that the learned Rent Control Appellate Authority could have decided the market value, based on the market value of the land fixed by the learned Rent Controller and reducing the market value by the learned Rent Control Appellate Authority is not reasonable. However, in the absence of any revision, the respondent / landlord cannot seek a higher amount, fair rent, based on the value fixed by the Rent Controller. 116. As contended by Mr.S.K.Chandra Kumar, learned counsel appearing for the respondent, normally the market value is more than the guideline value. As the property is situated in Anna Nagar, Chennai, abutting the road, a commercial premises, I am of the view that the value fixed by the learned Rent Controller, based on Ex.P.2 cannot said to be on the higher side. .17. Considering the arguments advanced by both the learned counsel, after having gone through the order passed by the Rent Controller and the common Judgment rendered by the Rent Control Appellate Authority, as the rented premises is a shop in the ground floor in a pash locality, Anna Nagar, Chennai, abutting the road, I am of the view that the value fixed by the learned Rent Controller at Rs.93,50,000/- per ground is no way exorbitant. The learned Rent Controller has also given deduction in the value of the building for 16 years towards depreciation and while fixing the fair rent at Rs.13,057/-. The learned Rent Controller has also given deduction in the value of the building for 16 years towards depreciation and while fixing the fair rent at Rs.13,057/-. The learned Rent Control Appellate Authority has reduced the land value at Rs.75,00,000/- per ground, as there is no revision preferred by the respondent / landlord, the same cannot be objected to by the respondent / landlord, hence, the value of the land reduced by the Rent Control Appellate Authority from 93,50,000/- per ground to Rs.75,00,000/-for deciding the fair rent is not detrimental to the interest of the petitioner / tenant, hence, the petitioner / tenant cannot raise a defence that the market value was fixed by the Rent Control Appellate Authority at Rs.75,00,00/-per ground arbitrarily. 118. Learned counsel appearing for the petitioner submitted that there is no basic amenities for awarding 5% towards amenities, however, as per the impugned order, paragraph 13, the learned Rent Control Appellate Authority has held as follows : "Basic Amenities: Both engineers have admitted the building is provided with electricity connection. R.W.1 in his evidence and report stated at the time of inspection electricity was disconnected by the landlord and there is no power supply. R.W.1 admitted that electricity installation existing in the petition premises. Whether the electricity connection is disconnected or not the question to be deciding for allowing cost for basic amenities. Except electricity, no other basic amenities provided by the landlord. The petition premises provided with electricity connection. Therefore, this Court allowed 5% for basic amenities." 19. The learned counsel appearing for the petitioner submitted that there are other tenants in the building, using the cantilever area, however, the same was added against the petitioner / tenant in fixing the fair rent by the Courts below. In the impugned Judgment, the Court below has specifically stated that there is no contra evidence on the side of the tenant to hold that other tenants are also using the alleged cantilevered area. In the aforesaid circumstances, I could find no error on the part of the Rent Control Appellate Authority in deciding the cantilevered area in computing the fair rent. In the aforesaid circumstances, I could find no error on the part of the Rent Control Appellate Authority in deciding the cantilevered area in computing the fair rent. Though P.W.1, the Engineer of the respondent / landlord has stated that the petition premises is 349 sq.ft, the learned Rent Control Appellate Authority has accepted the findings of the learned Rent Controller and decided a lesser extent of the premises, hence, I could find no error in the concurrent finding, with regard to the extent of the premises, based on the evidence. 20. Section 4 of Tamil Nadu Buildings (Lease and Rent Control_ Act, 1960 reads as follows : "4. Fixation of fair rent - (1) The Controller shall on application made by the tenant or the landlord of a building and after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in the following sub-sections. .(2) The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building. .(3) Thefair rent for any non-residential building shall be twelve per cent gross return per annum on the total cost of such building. .(4) The total cost referred to in sub-section (2) and sub-section (3) shall consist of the market value of the site in which the building is constructed, the cost of construction of the building and the cost of provision of anyone or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent. Provided that while calculating the market value of the site in which the building is constructed, the Controller shall take into account only that portion of the site on which the building is constructed and of a portion up to fifty per cent, thereof of the vacant land, if any, appurtenant to such building the excess portion of the vacant land, being treated as amenity : Provided further that the cost of provision of amenities specified in Schedule I shall not exceed - .(i) in the case of any residential building, fifteen percent; and .(ii) in the case of any non-residential building, twenty-five percent, of the cost of site in which the building is constructed, and the cost of construction of the building as determined under this Section. .(5) (a) The cost of construction of the building including cost of internal water-supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned. The Controller may, in appropriate cases, allow or disallow an amount not exceeding thirty per cent, of construction having regard to the nature of construction of the building. .(b) The Controller shall deduct from the cost of construction determined in the manner specified in clause (a), depreciation, calculated at the rates specified in Schedule II." 21. The Honble Supreme Court in the decision, Liza Arulanandam vs. A.S.Sulochana, reported in AIR 1990 SC 2289 , rendered by a Three Judge Bench, held that Section 4 of the Act, prescribes the principles in fixing fair rent as per Rent Control Act, whereby the earlier decision in K.C.Nambiar vs. The IV Judge of the Court of Small Causes, Madras ( AIR 1970 SC 1656 ) was overruled and held that the subsequent amendment brought on the statute in 1973, amplified the date of application as the staring point to fix market value. Therefore, it has been made clear, for fixation of and fair rent, the market value of the land and the building, on the date of application has to be taken into consideration by the Rent Controller and the Appellate Authority and not the date of construction of the building. The Honble Apex Court has held at Page No.2290 as follows: "2...In case of a residential building the fair rent shall be 9 per cent and for non-residential building 12 per cent gross return per annum on the total cost of the building in question. The total cost shall consist of (a) market value of the site on which the building is constructed; (b) the cost of the construction of the building; and (c) the cost of provision of any one or more of the amenities specified in Schedule I which shall not exceed : (1) in the case of residential building 15 per cent; and (2) in case of any non-residential building 25 per cent of the cost of the site in which the building was constructed as determined under Sec.4 of the Act... " 22. " 22. In the instant case, though the respondent / landlord has claimed the monthly rent at Rs.20,432/-, the learned Rent Controller, considering various aspects including the market value of the land, has fixed the rent at Rs.13,057/- per month. The learned Rent Control Appellate Authority, by the common Judgment, has modified the order, whereby reduced the fair rent to Rs.10,690/- per month. 23. The Courts below have considered the value of the land and the constructed portion of the building, let out to the petitioner / tenant, based on the market value as on the date of the application. It is seen that both the Courts below have rightly rejected the copy of the sale deed marked as Ex.R.3 for deciding the market value and considered the sale deed, Ex.P.2 for fixing the market value. The learned Rent Controller decided the market value of the land per ground at Rs.93,50,000/-, however, that was reduced to Rs.75,00,000/-per ground by the Rent Control Appellate Authority, the same has not been challenged by the respondent / landlord. In the aforesaid circumstances, the fair rent fixed at Rs.13,057/-per month by the learned Rent Controller has been reduced to Rs.10,690/- per month by the Rent Control Appellate Authority. As the reduction of the market value by the Appellate Authority is in favour of the petitioner / tenant, he cannot challenge the same. 24. In the light of the ratio laid down by the Honble Apex Court with reference to Sections 4 and 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, I am of the view that the Corut below, considering the market value as on the date of filing of the petition and decided the fair rent, hence, there is no illegality or material irregularity in the impugned Judgment and Decree passed by the Court below. 25. As contemplated under Section 4 of the Act and in the light of various decisions of the Honble Apex Court and this Court, considering the evidence available on record, I am of the view that there is no error or infirmity in the impugned common Judgment, so as to warrant any interference of this Court in the Revision and accordingly, the Civil Revision Petition is liable to be dismissed. 26. In the result, this Civil Revision Petition is dismissed. Consequently, connected miscellaneous petition is also dismissed. 26. In the result, this Civil Revision Petition is dismissed. Consequently, connected miscellaneous petition is also dismissed. The petitioner / tenant is directed to pay the entire arrears of rent, as per the fair rent fixed by the Rent Control Appellate Authority, within one month from the date of this order and in case of non-compliance, the respondent / landlord will be entitled to proceed against the petitioner / tenant, as per the Act as wilfull default, seeking eviction of the petitioner / tenant, after the period of one month from the date of this order. No order as to costs in the Revision Petition.