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Rajasthan High Court · body

2014 DIGILAW 1644 (RAJ)

Iqbal Singh v. Harbans Kaur

2014-10-09

M.N.BHANDARI

body2014
ORDER By this writ petition, a challenge is made to the orders passed by the Rent Tribunal so as Appellate Rent Tribunal issuing certificate of possession. An application for eviction was filed by the non-petitioner-landlord. It is by invoking Section 9(a) of Rent Control Act, 2001 (in short “the Act”). After adjudication, certificate of possession was issued. On a challenge to the order of the Rent Tribunal so as Appellate Rent Tribunal by a writ petition, the case was remanded back. It was on the ground that opportunity to cross-examine the witnesses was not provided. On remand of the case, the petitioner-tenant made application to take affidavit of two new witnesses. The application aforesaid was dismissed on the ground that the case has been remanded by the High Court only to permit cross-examination of the witnesses, thus new evidence cannot be led by the petitioner. The petitioner is aggrieved by the order passed on the said application. The challenge is also to the final order passed by the Rent Tribunal so as Appellate Rent Tribunal. Learned counsel submits that no default was committed by the petitioner-tenant as immediately after notice to pay rent, it was tendered before the expiry of the period of 30 days. In the background aforesaid, a case of default in payment of rent was not made out. The Rent Tribunal so as Appellate Rent Tribunal found it to be a case of default as amount paid by the petitioner towards rent was considered to be less as it was on a different rate than claimed by the non-petitioner-landlord. The issue for consideration before the Tribunal was as to whether remittance of the rent by the petitioner-tenant was proper or not. He submits that in ignorance of Section 6 of the Act, the non-petitioner-landlord calculated the rent by revising it @10% per year and gave notice for its payment. The enhancement of rent is permissible only by 5% per year though it was earlier 7½% but by repeal, it was substituted by 5%. The petitioner paid the amount of rent by enhancing it by 7½% per year, though even the enhancement was not required to be made in absence of adoption of procedure as given under Section 6(4) of the Act. The petitioner acted bonafidely and enhanced the rent by 7½% and paid the amount within 30 days. The petitioner paid the amount of rent by enhancing it by 7½% per year, though even the enhancement was not required to be made in absence of adoption of procedure as given under Section 6(4) of the Act. The petitioner acted bonafidely and enhanced the rent by 7½% and paid the amount within 30 days. The non-petitioner-landlord calculated the rent by revising it @10% per year based on the previous agreement. The case in hand is of lease prior to commencement of the Act of 2001 thus any agreement contrary to the provisions of Section 6 of the Act for enhancement of rent was not applicable. The aforesaid aspect was not considered by the Rent Tribunal so as the Appellate Rent Tribunal and thereby petitioner was considered to be a defaulter. The findings so recorded by both the Tribunals are without proper interpretation of the provisions of law thus impugned orders deserve to be set aside. Per contra, learned Senior Advocate Shri N.K. Maloo supported the impugned orders passed by both the Tribunals. He submitted that the petitioner was served with a notice for payment of rent. It was not paid within a period of 30 days, thus application seeking eviction from the rented premises was filed. The order for eviction was passed on finding default in payment of rent by the petitioner. It is however agreed that at one stage, the case was remanded back to the Tribunal as opportunity to cross-examine the witnesses was not provided. On remand, an application was filed to lead further evidence. The application aforesaid was dismissed by the Tribunals below as remand of the case was precisely for want of chance to cross-examine the witnesses and not to lead fresh evidence thus there is no illegality in the order passed by the Tribunal. Coming to the merit of the case, learned counsel submitted that as per Section 6 of the Act, revision of the rent can be claimed only by the landlord. Reference of Section 14 of the Act was given to substantiate the arguments aforesaid. Section 14 provides procedure for revision of rent. It can be in the hands of landlord and not by the tenant. In the background aforesaid, the petitioner had no right or authority to calculate the rent upwards or downwards as per Section 6 of the Act. Reference of Section 14 of the Act was given to substantiate the arguments aforesaid. Section 14 provides procedure for revision of rent. It can be in the hands of landlord and not by the tenant. In the background aforesaid, the petitioner had no right or authority to calculate the rent upwards or downwards as per Section 6 of the Act. The provisions of the Act are different than earlier Act of 1950. In the earlier Act of 1950, liberty was existing with the tenant and the landlord to seek determination of standard rent. The aforesaid arrangement was departed by the legislature while enacting the Act of 2001. The petitioner-tenant was not at liberty to revise the rent in pursuance to the provisions of Section 6 of the Act. The reference of Section 4 of the Act has also been given. It is to demonstrate that rent can be such as agreed by the parties. In the instant case, the parties agreed for the rent with revision @10% per annum. Once the rent was agreed by the parties and permissible under Section 4, it cannot be made subject to Section 6 of the Act. The revision of rent by 10% had been agreed and was permissible. It was considered by both the Tribunals to arrive at a conclusion that proper remittance of rent was not made, after notice under Section 9 (a) of the Act. The petitioner had no authority or liberty to calculate the amount of rent contrary to what has been agreed between the parties. Learned Senior Counsel Shri N.K. Maloo had further made reference of the conduct of the petitioner. The petitioner initially calculated the rent by enhancing it @7½% and thereafter, calculated it by enhancing @5%. He had no intention to pay due amount of rent as was agreed by the parties. The reference of Section 7 of the Act was also given. It is to show that any agreement after commencement of the Act with a clause for increase at the rate of more than 5% would be void but similar provision does not exist under Section 6 of the Act for previous agreement. The reference of Section 7 of the Act was also given. It is to show that any agreement after commencement of the Act with a clause for increase at the rate of more than 5% would be void but similar provision does not exist under Section 6 of the Act for previous agreement. If the intention of legislature would have been not to recognize agreement prior to the enactment of the Act with a clause to increase rent beyond 5%, the provision as exist under Section 7(2) would have been inserted in Section 6 as well. Learned counsel lastly referred judgment of Full Bench in the case of Bhag Chand vs. Additional District Judge No.5, Kota & Others, 2009 (2) WLC (Raj.) 775. He submits that controversy of the similar nature came up for consideration before the Larger Bench wherein it was held that tenant has no right to seek revision of rent under the Act of 2001 though it was existing under the Act of 1950. In view of judgment of Larger Bench, the tenant had no authority to make revision of rent as per Section 6 of the Act. In the background aforesaid also, calculation of rent made by the petitioner contrary to agreement and at the rate less than agreed by the parties, was not permissible. The petitioner thus defaulted in making payment of rent on the agreed rate. The default having been established, the Tribunal rightly passed order for eviction. I have considered rival submissions made by the parties and scanned the matter carefully. Two issues have been raised before this court for its consideration. The first issue is in respect of dismissal of the application to lead additional evidence. I find that case in hand came up before this court earlier also. It was on acceptance of application for eviction. The order of eviction was set aside as opportunity of cross-examination was not given despite judgment of this court in reference to Section 21 of the Act. On remand of the case, the petitioner made application to lead evidence of two new witnesses. The application aforesaid was dismissed in absence of liberty by this court to lead additional evidence while remanding the case. I find no illegality in the said order. On remand of the case, the petitioner made application to lead evidence of two new witnesses. The application aforesaid was dismissed in absence of liberty by this court to lead additional evidence while remanding the case. I find no illegality in the said order. The remand of case by the High Court was on a limited ground and in reference to Section 21 of the Act when petitioner was not given opportunity to cross-examine the witness. The violation of principles of natural justice was found but then remand of the case was on a limited issue. It could not be used for an opportunity to lead new evidence when no relief was prayed in the earlier writ petition. In view of above, the first ground raised by the petitioner against dismissal of the application cannot be accepted. The second issue is as to whether a case of default in payment of rent is made out or not. The non-petitioner-landlord caused a notice as per Section 9(a) of the Act for payment of rent. The notice for payment was for a sum of Rs.1,15,948/- As against the aforesaid, the petitioner-tenant paid a sum of Rs.95200/-. There exist no dispute on the aforesaid fact. It is also not in dispute that prior to commencement of the Act of 2001, there was an agreement between the parties. It was not only indicating base rent but rate of revision. The revision of rent was provided @10% per annum. The petitioner-tenant tried to demonstrate subsequent oral agreement for revision of rent @5%. In the factual background given above, the question for my consideration is as to whether the petitioner has committed default in making payment of rent. For proper consideration of the arguments of respective counsel for the parties, reference of Sections 4, 6, 7 & 14 of the Act would be relevant, thus quoted hereunder for ready reference: “Section 4. Rent to be as agreed.- The rent payable for any premises shall, subject to other provisions of this Act, be such as may be agreed upon between the landlord and the tenant and it shall not include the charges payable for amenities which may be agreed upon separately; and shall be payable accordingly. Section 6. Rent to be as agreed.- The rent payable for any premises shall, subject to other provisions of this Act, be such as may be agreed upon between the landlord and the tenant and it shall not include the charges payable for amenities which may be agreed upon separately; and shall be payable accordingly. Section 6. Revision of rent in respect of existing tenancies.- (1) Notwithstanding anything contained in any agreement, where the premises have been let out before the commencement of this Act, the rent thereof shall be liable to be revised according to the formula indicated below:- (a) where the premises have been let out prior to 1st January, 1950, it shall be deemed to have been let out on 1st January, 1950 and the rent payable at that time shall be liable to be increased at the rate of [5%] per annum and the amount of increase of rent shall be merged in such rent after ten years. The amount of rent so arrived at shall again be liable to be increased at the rate of [5%] per annum in similar manner upto the year of commencement of this Act; (b) Where the premises have been let out on or after 1st January, 1950, the rent payable at the time of commencement of the tenancy shall be liable to be increased at the rate of [5%] per annum and the amount of increase of rent shall be merged in such rent after ten years. The amount of rent so arrived at shall again be liable to be increased at the rate of [5%] per annum in similar manner upto the year of commencement of this Act. (2) Notwithstanding anything contained in sub-sec. (1), where the period of ten years for merger of increase of rent under Sub-section (1) is not completed upto the year of the commencement of this Act, the rent at the rate of [5%] per annum shall be increased upto the year of the commencement of this Act and amount of increase of rent shall be merged in rent. (3) The rent arrived at according to the formula given in Sub-secs. (3) The rent arrived at according to the formula given in Sub-secs. (1) and (2) shall, after completion of each year from the year of commencement of this Act, again be liable to be increased and paid at the rate of 5% per annum and the amount of increase of rent shall be merged in such rent after ten years. Such rent shall further be liable to be increased at similar rate and merged in similar manner till the tenancy subsists. (4) The rent revised as per formula given under Sub-sec. (1) or Sub-sec. (2) shall be payable, after the commencement of this Act, from the date agreed upon between the landlord and the tenant or where any petition is filed in a Rent Tribunal, from the date of filing of such petition. Section 7. Revision of rent in respect of new tenancies.-(1) In the absence of any agreement to the contrary, the rent of the premises let out after the commencement of this Act shall be liable to be increased at the rate of 5% per annum and the amount of increase of rent shall be merged in such rent after ten years. Such rent shall further be liable to be increased at the similar rate and merged in similar manner till the tenancy subsists. (2) Any agreement for increase of rent in excess of 5% per annum shall be void to that extent. Section 14. Procedure for revision of rent.-(1) The landlord may seek revision of rent under Sec. 6 or Sec. 7 by submitting a petition before the Rent Tribunal accompanied by affidavits and documents, if any. (2) On filing of such petition the Rent Tribunal shall issue notice accompanied by copies of petition, affidavits and documents to the opposite party fixing a date not later than thirty days from the date of issue of notice. The opposite party may file reply, affidavits and documents after serving the copies of the same on the petitioner, within a period not exceeding thirty days from the date of service of notice. The service of notice shall be effected through process server of the Tribunal or Civil Court as well as by registered post, acknowledgment due. Notice duly served by any of these methods shall be treated as sufficient service. The service of notice shall be effected through process server of the Tribunal or Civil Court as well as by registered post, acknowledgment due. Notice duly served by any of these methods shall be treated as sufficient service. (3) The petitioner may thereafter file rejoinder, if any, after serving the copy to the opposite party, within a period not exceeding fifteen days from the date of service of the reply. (4) Rent Tribunal shall thereafter fix a date of hearing, which shall not be later than ninety days from the date of service of notice on the tenant. (5) The Rent Tribunal, during the course of such hearing, may hold such summary inquiry as it deems necessary and fix the rent as per formula laid down in Sec. 6 or Sec. 7 and issue a recovery certificate indicating the date from which such rent shall be payable. The petition shall be disposed of within a period of one hundred and fifty days from the date of service of notice on the tenant.” According to the non-petitioner-landlord, revision of rent cannot be prayed or claimed by the tenant under the Act of 2001 and for that, procedure as given under Section 14 supports his arguments. As per the aforesaid provision, an application to seek revision of rent can be maintained by the landlord alone and not by the tenant. It is supported by judgment of the Full Bench in the case of Bhag Chand (supra). According to the landlord, revision of rent cannot be sought by the tenant and on a rate different than agreed. The petitioner was liable to pay the amount of rent as claimed by the landlord. To appreciate the arguments, reference of Section 6(1) would be relevant. It starts from non-obstantive clause and provides that notwithstanding anything contained in any agreement, revision of rent would be at the rates provided under clause (a) & (b) of subsection (1) of Section 6. In view of provision aforesaid, the revision of rent cannot be claimed by the landlord at a rate different than what has been provided under the Act. If the argument raised by the non-petitioner-landlord to seek revision of rent @10% per annum is accepted, it would be in violation of provisions of Section 6. In view of provision aforesaid, the revision of rent cannot be claimed by the landlord at a rate different than what has been provided under the Act. If the argument raised by the non-petitioner-landlord to seek revision of rent @10% per annum is accepted, it would be in violation of provisions of Section 6. It is true that tenant cannot file an application for revision of rent but it does not mean that landlord can demand rent in violation of the provisions of the Act. In this case, landlord did not file an application for revision of rent and demanded the rent in disregard to Section 6 of the Act. The revision of rent as per formula given under sub-section (1) & (2) of Section 6 of the Act shall be from the date agreed upon between the landlord and the tenant or when an application is filed by the landlord before the Rent Tribunal. Section 6(1) provides for revision of rent at the rate given therein notwithstanding anything contained in any agreement between the parties. If the parties have not agreed on the date of enhancement of rent or landlord has not filed application for revision of rent, it will remain static. The difference between the rent and the rate of its revision, is to be made. If the argument of learned counsel for respondent is accepted that in absence of any action as provided under sub-section (4) of Section 6 of the Act, the agreement is to be given effect for enhancement of rent beyond 5% per annum, then it would make Section 6(1) of the Act to be redundant. If revision of rent is provided @10% per annum in the agreement and is permitted, then it will offend sub-section (1) & (2) where permissible limit for enhancement is upto 5%, notwithstanding any agreement contrary to it. Subsection (4) of Section 6 of the Act cannot construe to revive an agreement for revision of rent at the rate beyond what is provided under sub-sec (1) and (2). A confusion seems to be existing regarding rent and its rate of revision. Section 6 of the Act makes a reference about rate of revision and not for determination of base rent. The provision for base rent is given under Section 4 of the Act. A confusion seems to be existing regarding rent and its rate of revision. Section 6 of the Act makes a reference about rate of revision and not for determination of base rent. The provision for base rent is given under Section 4 of the Act. Any agreement between the parties cannot be given effect, if it provides revision of rent at the rate beyond 5%. Accordingly, I do not find any force in the argument of the learned counsel for respondent that in absence of the agreement between the parties for a date for revision of rent or application under Section 6(4) of the Act, revision of rent would be at the rate provided in the agreement. Section 4 gives liberty to the parties to agree for the rent subject to other provisions of the Act. There is no doubt that what should be rent is to be agreed by the parties but difference is to be made between the rent and the rate of its revision thereupon. Section 4 does not speak about rate of revision of rent but provides about base rent. The revision would take effect subsequently either as per Section 6 or Section 7 of the Act, as the case may be. Section 6 of the Act would apply to the agreement prior to commencement of the Act of 2001, whereas Section 7 would operate to the agreement executed subsequent to the commencement of the Act of 2001. Section 4 is not in any manner in conflict to Section 6 & 7 for revision of rent, rather it provides for the base rent. Reference of Section 7(2) has also been given. It provides that any agreement, subsequent to commencement of the Act of 2001, would be void if it provides revision of rent at the rate more than 5% per annum. Section 7(1) permits any agreement for revision of rent upto 5% per annum, whereas Section 6 provides for revision of rent @5% per annum and the provision starts from non-obstantive clause. As per Section 7 of the Act, revision of rent is permissible upto 5% and any agreement contrary to it would be void to that extent. Therein revision of rent can be less than 5% per annum, if there exist an agreement between the parties. As per Section 7 of the Act, revision of rent is permissible upto 5% and any agreement contrary to it would be void to that extent. Therein revision of rent can be less than 5% per annum, if there exist an agreement between the parties. Section 6 of the Act also permits revision of rent but it can be at the fixed rate provided under Section 6(1) of the Act notwithstanding any agreement contrary to it. The agreement executed prior to the commencement of the Act of 2001 would not be void, if it provides lower or higher rate for revision of rent though would be ineffective to the extent of rate of revision, if it is not @5% per year. The difference in Section 6 and 7 of the Act is for the reason that if execution of the agreement is prior to the commencement of the Act of 2001 with a provision for increase of rate more or less than 5% per annum, then agreement would not be void as nobody was knowing as to what would be legislation in future but such a provision in agreement would be ineffective. Section 7 of the Act whereas provides agreement for revision of rent beyond 5% to be void for the reason that it is executed after commencement of the Act of 2001. It is after knowing about maximum rate for revision of rent, thus is not permitted contrary to the provisions of the Act. The two provisions operate in the different situations and the object, as explained above. The moot question still remains as to whether the landlord was justified to calculate the rent at the rate provided under Section 6 of the Act without a liberty to do so. The Act of 2001 does not permit revision of rent at the instance of tenant unless parties agree for a date of revision under Section 6(4) of the Act. In case nothing is done by the parties, as provided under Section 6(4) of the Act, there can be no revision of rent. The landlord is not at liberty to calculate the rent at the rate provided in the agreement unless date for revision is agreed or an application for revision of rent is filed and is accepted. In case nothing is done by the parties, as provided under Section 6(4) of the Act, there can be no revision of rent. The landlord is not at liberty to calculate the rent at the rate provided in the agreement unless date for revision is agreed or an application for revision of rent is filed and is accepted. Section 6 of the Act starts with non-obstantive clause, thus no agreement to provide higher or lower rate of revision of rent would operate after commencement of the Act of 2001. The landlord was thus not at liberty to claim rent with enhancement @10% per annum. If case in hand is looked into, the non-petitioner-landlord was not entitled to enhancement of the rent even by 5% or 7½% as increased by the petitioner-tenant. It is in view of the fact that there was no agreement between the parties about the date to revise the rent and at the same time no application was filed by the landlord under Section 6 of the Act so as to give effect to sub-section (4) of Section 6 of the Act. In absence of application and agreement between the parties about the date of revision of rent, the revision was not permissible in strict sense. When agreement executed prior to commencement of the Act cannot be given effect to for revision of rent at the rate different than what has been provided under Section 6(1) of the Act, the demand of rent by the landlord by revising it at the rate of 10% per annum was not legal and permissible. In the background aforesaid and even if the petitioner-tenant was not entitled to seek revision of rent, the landlord was also not authorized to make revision of rent unless it is mutually agreed by the parties for the date or on an application by the landlord. Sub-section (4) of Section 6 rather goes against the landlord in regard to revision of rent. The landlord was entitled to the rent as was payable on the date of commencement of the Act of 2001 without its revision, in facts and circumstances of this case. In view of above, I find that demand of rent based on the agreement was not proper so as to consider it to be a case of short remittance and default in payment of rent thereof. In view of above, I find that demand of rent based on the agreement was not proper so as to consider it to be a case of short remittance and default in payment of rent thereof. In the background aforesaid, the findings of the default in payment of rent, recorded by the Rent Tribunal so also by Appellate Rent Tribunal cannot be allowed to stand. The impugned orders passed by the Rent Tribunal so also by Appellate Rent Tribunal are thus, quashed. A case of default in payment of rent is not made out. Accordingly, writ petition is allowed along with stay application. It would be no order as to costs.