Research › Search › Judgment

Andhra High Court · body

2014 DIGILAW 819 (AP)

G. S. Ashok v. Dhirajlal Maganlal Shah

2014-07-04

L.NARASIMHA REDDY

body2014
Judgment : The deceased-1st respondent was the tenant in the ground floor of premises constructed in Plot No.24, Jawahar Nagar Colony, Hyderabad. The petitioners purchased the entire building in the year 2001, and the tenancy of the deceased-1st respondent was attorned through a letter dated 07-05-2001. The lease at the relevant point of time was Rs.500/- per month. The petitioners filed R.C.No.192 of 2001 before the Additional Rent Controller-cum-XVIII Junior Civil Judge, at Secunderabad, under Section 4 of the A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short ‘the Act’) for fixation of fair rent, for the premises, to be at Rs.7,000/- per month. They pleaded that the premises is located in an important area, and though it was residential in nature, the respondents were undertaking non-residential activity, namely, running of a clinic. It was also pleaded that before the premises were purchased by the petitioners, they too were tenants, and for the first floor, they were paying Rs.3,800/- per month, whereas the 1st respondent was paying, just Rs.500/-per month. They pleaded that the ground floor has an advantage, from the point of view of access and amenities, and prayed for enhancement of the rent. The 1st respondent died during the pendency of the proceedings, and his legal representatives, respondents 2 to 5 were brought on record. They admitted the tenancy and the demand made by the petitioners for enhancement of the rent. According to them, the garage in the ground floor was occupied by the petitioners and that there is no basis for the petitioners for demanding enhanced rent. Through its order dated 25-10-2004, the Rent Controller enhanced the rent to Rs.1,200/-per month, from the date of filing of the petition. The respondents filed R.A.No.321 of 2004 before the Chief Judge, City Small Causes Court, Hyderabad, challenging the order, enhancing the rent, passed by the Rent Controller. The petitioners, on the other hand, filed Cross-objections, seeking enhancement up to Rs.7,000/-per month. The lower Appellate Court dismissed the appeal as well as the cross-objections, through order dated 28-12-2010. Hence, this revision, under Section 22 of the Act. Sri N. Raghavan, learned counsel for the petitioners submits that the premises are located in an important residential and developed area in Secunderabad, and that the rent of even a flat of small the area would be in the range of Rs.10,000/- to Rs.15,000/-per month. Hence, this revision, under Section 22 of the Act. Sri N. Raghavan, learned counsel for the petitioners submits that the premises are located in an important residential and developed area in Secunderabad, and that the rent of even a flat of small the area would be in the range of Rs.10,000/- to Rs.15,000/-per month. He submits that the premises under lease, to the respondents, comprise of several rooms, surrounded by open area and that the demand for enhancement of rent to Rs.7,000/-per month was reasonable. He submits that though oral evidence of PWs 1 to 3 was adduced, and document, such as the valuation certificate, was filed as Ex.P-2, the Rent Controller did not take the same into account, and ordered enhancement, which is totally irrational and insufficient. He further submits that the tenants in the nearby locality were examined and the counterfoils of rents paid by them were also filed. Learned counsel submits that the rent ought to have been enhanced as prayed for. Smt. Manjari S. Ganu, learned counsel for the respondents, on the other hand, submits that originally the 1st respondent was in occupation of the ground and first floor and on the demand made by the original owner, the first floor was vacated. She contends that even in the ground floor, garage was occupied by the petitioners and that the water supply was also disconnected. She contends that no further enhancement needs to be ordered. There is no dispute as to the existence of relationship of landlord and tenant, between the petitioners and the respondents. The RC was filed under Section 4 of the Act for enhancement of the rent. It is brought to the notice of this Court that independent proceedings are pending in relation to eviction. The Rent Controller framed only one point for consideration, viz.,whether the petitioners have shown sufficient cause for fixation of fair rent in respect of the petition schedule premises. In support of their claim, the petitioners examined PWs 1 to 3 and filed Exs.P-1, P-2 and Exs.X-1 to X-4. The 4th respondent deposed as RW-1 and he filed Exs.R-1 to R-19, photographs, and Ex.R-20, a copy of the rental agreement. As observed earlier, the Rent Controller enhanced the rent from Rs.500/- to Rs.1,200/- per month. The same was confirmed by the lower Appellate Court. The 4th respondent deposed as RW-1 and he filed Exs.R-1 to R-19, photographs, and Ex.R-20, a copy of the rental agreement. As observed earlier, the Rent Controller enhanced the rent from Rs.500/- to Rs.1,200/- per month. The same was confirmed by the lower Appellate Court. In the context of fixation of fair rent, factors such as the location and extent of the premises and the age thereof become relevant. The record is not clear as to when the tenancy commenced. It is true that the tenancy of the deceased-1st respondent was attorned in the year 2001. The RC was filed immediately after attornment. Oral and documentary evidence was adduced by the parties. The Rent Controller, no doubt, has undertaken extensive discussion about the matter. This Court, however, finds that most of the discussion was outside the scope of the RC. The rent, which a premises of similar nature would fetch, becomes relevant. It is not in dispute that Jawahar Nagar, is one of the most developed localities in Secunderabad, and what is in occupation of the respondents is the entire ground floor premises, except the garage. The rent of even a flat in that area would be in the range of Rs.10,000/- to Rs.15,000/-per month, at present. It would be in the range of Rs.5000/- to Rs.6,000/- in the year 2001. The learned Appellate Judge was mostly impressed by the fact that a clinic is being run in the scheduled premises between 9:00 a.m. and 12:30 p.m. and 6:00 p.m. to 8:30 p.m., and for rest of the time, it is left vacant. The second reason that weighed with him in confirming the rent at Rs.1,200/- per month is that, water supply in the premises was disconnected, and the respondents arranged for an independent connection on their own accord. I am afraid whether these two grounds can be treated as relevant and germane in the context of fixation of fair rent. Once a tenant is in exclusive possession of the premises, it hardly matters as to for how much time, he is putting them to use and the nature thereof. It matters least for the owner of the premises, as to whether the tenant is residing in the premises, or as to how many persons are living thereof, or whether it is kept under lock for most of the time. The rent represents the charges for usage of the premises. It matters least for the owner of the premises, as to whether the tenant is residing in the premises, or as to how many persons are living thereof, or whether it is kept under lock for most of the time. The rent represents the charges for usage of the premises. It is for the tenant to put them to optimum use. If the reason furnished by the lower Appellate Court is to be accepted, a tenant would not be under any obligation to pay any rent for particular month, if he does not use the premises during that period. The second reason namely, disconnection of water supply, is in the realm of providing amenities for the premises. If the tenant was denied the amenities, the Act prescribes separate procedure for restoration of the same. As and when an application is filed in that behalf, the question as to whether the landlord was responsible for disruption of any amenity, and if so, what is the method of restoration thereof; can be considered. The rent legislations were enacted at a time when there is acute dearth of accommodation and the owners of the premises were exploiting the tenants. The situation has changed drastically and plenty of accommodation is available. Change in the approach of the Courts is also evident from the judgment of the Supreme Court, in Atma Ram Properties (P) Ltd., v. Federal Motors (P) Limited ( (2005) 1 SCC 705 ),wherein the Hon’ble Supreme Court held that rent has to be determined with reference to the value of the property, duly indicating the formula thereof. Though such exercise was in relation to the rent payable during the pendency of an appeal, by a tenant, who suffered an order of eviction, guidance can be received therefrom. If that formula is applied, the increase in the rent for the premises would be phenomenal. This Court is of the view that whatever may have been the inhibition for the Courts in enhancing the rent to Rs.7,000/- per month, in the year 2001, at least now, it can be enhanced. Hence, the C.R.P is allowed, and the orders under revision are modified to the effect that the rent for the scheduled premises shall stand enhanced to Rs.7,000/- per month, with effect from July 2014. There shall be no order as to costs.