Mahjabeen v. Gulf Medical Diagnostic Service [P] Ltd. , Rep. by Dr. T. Sivabakkiyam
2019-07-09
P.T.ASHA
body2019
DigiLaw.ai
ORDER : (Prayer in C.R.P.(NPD)No.230 of 2019: Civil Revision Petition is filed under Section 25 of the Tamil Nadu Buildings Lease & Rent Control Act, against the fair and decreetal order dated 03.01.2018 passed in R.C.A.No.235 of 2016 by the learned IX Judge, Court of Small Causes at Chennai, [Rent Control Appellate Authority] confirming the fair and decreetal order dated 03.11.2014 passed in R.C.O.P.No.1315 of 2012 by the Learned XVI Judge, Court of Small Causes at Chennai. Prayer in C.R.P.(NPD)No.231 of 2019: Civil Revision Petition is filed under Section 25 of the Tamil Nadu Buildings Lease & Rent Control Act, against the fair and decreetal order dated 03.01.2018 passed in R.C.A.No.232 of 2016 by the learned IX Judge, Court of Small Causes at Chennai, [Rent Control Appellate Authority] confirming the fair and decreetal order dated 03.11.2014 passed in R.C.O.P.No.1317 of 2012 by the Learned XVI Judge, Court of Small Causes at chennai. Prayer in C.R.P.(NPD)No.1766 of 2018: Civil Revision Petition is filed under Section 25 of the Tamil Nadu Buildings Lease & Rent Control Act, against the fair and decreetal order dated 03.01.2018 passed in R.C.A.No.77 of 2015 on the file of the IX Small Causes Court (Appellate Authority) Chennai, confirming the order dated 03.11.2014 passed in R.C.O.P.No.1317 of 2012 on the file of the XVI Small Causes Court (Rent Controller) Chennai. Prayer in C.R.P.(NPD)No.2343 of 2018: Civil Revision Petition is filed under Section 25 of the Tamil Nadu Buildings Lease & Rent Control Act, against the fair and decreetal order dated 03.01.2018 passed in R.C.A.No.76 of 2015 on the file of the IX Small Causes Court (Appellate Authority) Chennai, confirming the order dated 03.11.2014 passed in R.C.O.P.No.1315 of 2012 on the file of the XVI Small Causes Court (Rent Controller) Chennai.) C.R.P.No.230 of 2019 is the revision filed by the landlady and C.R.P.No.2343 of 2018 is the revision filed by the tenant. Both these revisions emanate from the proceedings in R.C.O.P.No.1315 of 2012. C.R.P.No.231 of 2019 filed by the landlady and C.R.P.No.1766 of 2018 filed by the tenant, emanates from R.C.O.P.No.1317 of 2012. The parties are referred to as landlady and tenant wherever the context so requires. 2.
Both these revisions emanate from the proceedings in R.C.O.P.No.1315 of 2012. C.R.P.No.231 of 2019 filed by the landlady and C.R.P.No.1766 of 2018 filed by the tenant, emanates from R.C.O.P.No.1317 of 2012. The parties are referred to as landlady and tenant wherever the context so requires. 2. The landlady had filed R.C.O.P.No.1315 of 2012 on the file of the XVI Judge, Small Causes Court, Chennai, under Section 4 of the Tamil Nadu Building (Lease and Rent Control) Act (herein after referred to as the Act), for fixing the fair rent in respect of the portion of the third floor of the demised premises bearing Door No.16, Chinnappa Rowther Street, Triplicane, chennai - 5. The case of the landlady was that she had let out the said premises to the tenant for the residential use on a monthly rental of Rs.4,000/-. The rent in respect of the said property was very low, considering the fact that the property was situate close to Triplicane High Road and was situate in the junction of Devaraja Mudali Street and Chinnappa Rowther Street. The building consisted of a ground and three floors. 3. The demised premises have several locational advantages like Schools, Hotels, Post Office, Lodges, Hospitals and the M.A. Chidambaram Stadium. Apart from that there were several other Commercial establishments in and around the demised premises. The Building consisted of over 20 tenants and was a type I, Class "A" construction with the basic and schedule I amenities. The landlady would contend that the premises would fetch a fair rent of Rs.11,473/- per month. 4. The tenant had resisted the above petition inter alia contending that the demised property is situate far away from the main road. That apart, the premises consisted of several tenants and there is no petition filed against the other tenants and therefore the petition lacked bona fides. 5. R.C.O.P.No.1317 of 2012 is also filed for fixing the fair rent in respect of the 1st floor of the premises bearing No.16, Chinnappa Rowther Street, Triplicane, Chennai - 5, on the file of the XVI Small Causes Court, Chennai. It is the case of the landlady that the demised premises has been let out on rent to the tenant for a non-residential use and the present rent in respect of the premises is Rs.16,500/-.
It is the case of the landlady that the demised premises has been let out on rent to the tenant for a non-residential use and the present rent in respect of the premises is Rs.16,500/-. Considering the locational advantages and the fact that the premises is a type I, Class "A" construction with the basic and schedule I amenities, the landlady would contend that the same would fetch a fair rent of Rs.55,476/-. 6. The counter in R.C.O.P.No.1317 of 2012 filed by the tenant was on the same lines as in R.C.O.P.No.1315 of 2012. 7. The learned Rent Controller (XVI Small Causes Court), had taken up the matter for enquiry and on the landlady's side one Ajeez Mohideen, an Engineer has been examined as P.W.1 and Ex.P.1 to Ex.P.4 were marked in respect of both the R.C.O.Ps. 8. The tenant on their part had examined Deenanath Rao, an Engineer and Licensed surveyor as R.W.1 and marked Ex.R.1 to Ex.R.8 in both R.C.O.P.No.1315 of 2012 and R.C.O.P.No.1317 of 2012. 9. The Rent Controller after analysing the evidence on record had ultimately fixed the fair rent at a sum of Rs.7,285/- per month in respect of R.C.O.P.No.1315 of 2012 and Rs.49,360/- per month in respect of R.C.O.P.No.1317 of 2012. The learned Rent controller had taken into account the Type of the building, age of the building, depreciation and basic amenities as there was no difference between the report of the P.W.1 and R.W.1. However, with reference to the plinth area, the landlady's Engineer, namely, P.W.1 had arrived at built up area of 487 Sq.ft in respect of the third floor, 28.8 Sq.ft as Stair case area and 38.25 Sq.ft as cantilevered slab extent. The tenant's engineer assessed the plinth area at 443 Sq.ft. in third floor, 29 Sq.ft. as Stair Case area. 10. The Rent Controller had observed that P.W.1 had not filed any proof to show the plinth area, whereas R.W.1 had filed a plan with all details and therefore the report of R.W.1 was accepted. In so far as the 1st floor was concerned P.W.1 arrived at a built up area of 2,256 Sq.ft, 28.8 Sq.ft towards Staircase area and 260 Sq.ft towards cantilevered slab extent. On the other hand R.W.1 assessed the plinth area as 2,240 Sq.ft., 28 Sq.ft. towards Stair case area and 147 Sq.ft in the Balcony.
In so far as the 1st floor was concerned P.W.1 arrived at a built up area of 2,256 Sq.ft, 28.8 Sq.ft towards Staircase area and 260 Sq.ft towards cantilevered slab extent. On the other hand R.W.1 assessed the plinth area as 2,240 Sq.ft., 28 Sq.ft. towards Stair case area and 147 Sq.ft in the Balcony. The learned Rent Controller had accepted the report of R.W.1 and not P.W.1 as his evidence was not supported by the documents. 11. The next point in contention was the apportionment of the land area. The tenant's measurement of 118 Sq.ft was taken into consideration. It was on the land value that there was a huge difference between the value fixed by the landlady's engineer and the value fixed by the tenant's engineer. P.W.1 assessed the property value at Rs.1,73,49,397/- per ground and R.W.1 had arrived at a sum of Rs.11,84,000/- per ground. The tenant had relied on three documents in respect of the properties situate at Devaraj Mudali street, Chinnappa Mudali street as well as the Triplicane High Road. 12. The landlady had filed a document dated 12.11.2012 which is after the filing of the petitions. The tenant had relied on the documents of the year 2011 and therefore they were not taken into consideration. The learned Rent Controller taking note of this fact came to the suo moto conclusion that the ground value is a sum of Rs.1,50,00,000/-. Therefore the Rent Controller had fixed the fair rent of Rs.7,285/- per month, for the third floor non-residential portion and Rs.49,360/- per month for the 1st floor non residential portion. 13. The said order was taken up on challenge both by the landlady as well as by the tenant. The landlady had filed R.C.A.No.235 of 2016 against the order in R.C.O.P.No.1315 of 2012 and the tenant had filed R.C.A.No.76 of 2015 against R.C.O.P.No.1315 of 2012. Likewise, the landlady had filed R.C.A.No.232 of 2016, challenging the order in R.C.O.P.No.1317 of 2012 and the tenant had filed R.C.A.No.77 of 2015 against the order in R.C.O.P.No.1317 of 2012. The Appeals were all before the IX Small Causes Court, Chennai. 14. The Appellate Authority on consideration of the evidence on record as well as the Judicial pronouncements had confirmed the order of the Rent Controller and dismissed all the appeals.
The Appeals were all before the IX Small Causes Court, Chennai. 14. The Appellate Authority on consideration of the evidence on record as well as the Judicial pronouncements had confirmed the order of the Rent Controller and dismissed all the appeals. It is aggrieved by this common order that the Civil Revision Petitions now before this Court has been filed both by the landlady and by the tenant. 15. Heard Mr. Ashok Menon, learned counsel appearing on behalf of the landlady and Mr. P. Raja, learned counsel appearing on behalf of the tenant. From the submissions made it is evident that the only bone of contention between the parties is the land value. The landlady has produced certified copies of the sale deed dated 12.11.2012 and the tenant in turn has filed sale deeds dated 15.12.2011, 15.09.2011 and 24.03.2011. From the records it is seen that the Rent Control Petitions have both been filed in July 2012. 16. The sale deed that has been produced on the side of the landlady is exactly four months after the filing of the Rent control Petition, whereas, the sale deeds produced by the tenant which are marked as Ex.R.2, Ex.R.4 and Ex.R.6 are dated 15.12.2011, 15.09.2011 and 24.03.2011 in respect of the properties situate in Devaraj Mudali Street, Chinnapa Rawthor Street as well as on Triplicane High Road. The document Ex.P.2, produced on the side of the landlady relates to the property situate on Big Street, Triplicane. 17. Mr. Raja would argue that the document Ex.P.2, which is filed on the side of landlady is four months after the filing of the R.C.O.P and therefore it could be safely taken note of. He would argue that the documents which have been filed on the side of the tenant namely Ex.R.1, Ex.R.4 and Ex.R.6 all relate to the period prior to the filing of the R.C.O.Ps on 15.12.2011, 15.09.2011 and 24.03.2011. Ex.R.2, sale deed is eight months prior to the filing of the petition and therefore both the Rent Controller and the Appellate Authority had not considered the sale deeds filed on either side and the Rent Controller had suo moto arrived at a land value of Rs.1,50,00,000/- which was confirmed by the Appellate Authority. The landlady would seek an enhancement and the tenant a reduction. 18.
The landlady would seek an enhancement and the tenant a reduction. 18. Before proceeding to analyse the order under Revision and considering the fact that the proceedings arise from petitions to fix the fair rent, it is necessary to reproduce Section 4 herein below: Section 4 of the Act would read 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) The fair 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 any one 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 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 shall not exceed- (i) in the case of any residential building, fifteen per cent; and (ii) in the case of any non-residential building, twenty-five per cent, 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.
(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 the cost 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." Therefore from a reading of the above Section it is evident that the Rent Controller for arriving at a total cost of construction of the building should take into account - (a) The cost of the site on which the building is constructed. (b) The cost of construction of the building (c) The cost of provision of any one or more of the amenities that has specified in schedule I. [Schedule I of the Act describes seventeen items which would constitute amenities.] 19. From a reading of the proviso it further appears that while calculating the market value of the site, the Rent Controller is bound to take into account the site on which the building is constructed and also the appurtenant land. In the instant case, from a reading of the Engineer's report as well as the orders under revision this Court unable to comprehend the total extent of the land. Unless the total extent of the land is arrived at the proportional cost of the site cannot be arrived at. 20. This Honourable Court as early as in the year 1980 elaborated the manner in which the land value has to be calculated. In the Judgment reported in (1982) 2 MLJ 441 - Chelladurai Alias V.N.Veeman Vs. Paramanand Jindal the learned Judge has stated as follows: "Section 4(1) introduced by Tamil Nadu Act XXIII of 1973 states that 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 Sub-sections (2) to (5).
Sub-sections (2) and (3) enumerate that the fair rent for any residential building shall be 9% gross return per annum, while the fair rent for any non-residential building shall be 12% gross return per annum on the total cost of such building. Sub-section (4) indicates how the total cost in respect of either a residential or a non-residential building has to be arrived at. The total cost referred to in Sub-sections (2) and (3) of Section 4 consists of the market value of the site in which the building is constructed, the cost of constructions of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent. Then follows the first proviso which runs thus: 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 upto fifty per cent. there of the vacant land, if any, appurtenant to such building, the excess portion of the vacant land being treated as amenity ; 21. The learned Judge had further added meaning to the proviso to Section 4 which reads as follows: "The proviso simply means this. The actual area of the site over which the construction has been put up has to be first determined. From the total area of the site, the area of the site over which the building has been put up has to be deducted and the balance, if any, will be the vacant land. If, the area of the vacant land thus arrived at is equal to or less than 50 % of the area of the site over which the construction has been put up has to be first determined. If the area of the vacant land thus arrived at is equal to or less than 50 % of the area of the site over which the construction has been put up, such extent of vacant land has to be added on to the area of the site occupied by the construction and the market value of the site will be the market value of that area.
If, however, the vacant land is in excess of 50% of the area over which the construction has been put up, then, the extent to be added to the area of the site occupied by the construction will be only 50% of that area and no more and the market value of the site will be the market value of that area. In the latter case, the vacant land remaining after so adding 5p % of the area of the site over which the construction has been put up to the area of the site occupied by the construction, is treated as on excess portion and amenity. In other words, such excess is not taken into account as site for purposes of ascertaining the market value, but treated as an amenity." 22. This court in another Judgment reported in (1982) 2 MLJ 124 - Kores India Limited Public Limited Company, Registered Office at Plot No.10, Harries Road, Worli, Bombay vs Dinesh Mothilal was called upon to consider the fixation of fair rent in respect of the building in the occupation of several tenants who had taken on lease portions of the building. The learned Judge had held as follows: "the method adopted under the law is to arrive at the aggregate capital value of the building as such and elicit there from the fair rent as a percentage on the total capital value. In the case of residential buildings, the statute has now fixed 9% on the building, land and other amenities, as the measure of fair rent. For non-residential buildings, it is 12%. On this broad basis, Section 7 provides for detailed methods of calculation. A consideration of the scheme of this section as a whole, would show that fixation of fair rent is not to be the end-result of an adjudicatory process based on the realities of the situation, but is to be determined on the basis of a rule of thimb or statutory formula. In that formula would go in: (1) the market value of the building; (2) the cost of construction less depreciation; and (3) the value of the amenities. The results of valuation under all the three heads will have to be totalled up and the statutory percentage applied to it so as to arrive at the fair rent.
In that formula would go in: (1) the market value of the building; (2) the cost of construction less depreciation; and (3) the value of the amenities. The results of valuation under all the three heads will have to be totalled up and the statutory percentage applied to it so as to arrive at the fair rent. Each of the components, which goes into the final determination, is itself subject to certain detailed provisions. It is in this context that Section 4 contains a proviso, which has a bearing on the market valuation of the land. The provision begins by laying down that the land on which the building stands must be valued on the basis of the market value. The proviso to the section lays down that the land on which the building stands must also cover the appurtenant land upto a maximum of 50%. 5. In other words, if the appurtenant land of a given building is less than 50% of the plinth area, only the actual area of the appurtenant land will be taken into account. If on the contrary, the area of the appurtenant lamd is 50% or more of the plinth area, then, only 50% of the appurtenant land shall be, deemed to be the land on which the building stands for the purpose of evaluating the market value of the land." 23. Both these Judgments were referred to the Full Bench in view of the conflict between the decisions of single Judges of this Court. The Full bench of this Court in the Judgment reported in AIR 1989 MAD 225 = 1989 (1) MJL 213 - H.C. Lodha Vs. Dr. C. Ranganathan and others had agreed with the ratio laid down in the two Judgments. The position was once again reiterated in the Judgment reported in 1993-1-LW-344 - M. Radhakrishna Rao Vs. A.B. Ahmed Basha and others. 24. In the case on hand, it is not known as to how the Authorities have come to the conclusion that the land in question measures an extent of 2,400 Sq.ft without there being any supporting documents. Further it is seen, that the landlady had produced a document Ex.P.2 which is a sale deed dated 12.11.2012 nearly four months after filing of the Rent Control Petitions. On the other hand the tenant had relied upon three sale deeds, Ex.R.2 (15.12.2011), Ex.R.4 (15.09.2011) and Ex.R.6 (24.03.2011).
Further it is seen, that the landlady had produced a document Ex.P.2 which is a sale deed dated 12.11.2012 nearly four months after filing of the Rent Control Petitions. On the other hand the tenant had relied upon three sale deeds, Ex.R.2 (15.12.2011), Ex.R.4 (15.09.2011) and Ex.R.6 (24.03.2011). Ex.R.2 is seven months prior to the filing of the Rent Control Petition. The market value to be calculated is the market value of the site as on the date of the filing of the petition. 25. Since the documents that has been filed on the side of the landlady is nearly four months after the filing of the Rent Control Petition, the Rent Controller should have taken into account the documents filed by the tenant, that is Ex.R.2 dated 15.12.2011. The Authorities below ought to have adopted the dictum laid down by the Honourable Supreme Court in the Judgment reported in 2002 (3) SCC 688 - Special land Acquisition Officer Vs. Mohamed Hanif Sahib Bawa Sahib, wherein the Apex Court has held that where there is no current document to show the market value of any property and where an early document is available, 10% appreciation of the value given in the earlier document can be given so as to arrive at the market value of the property on the date of the filling of the petition under Section 4 of the Act. 26. Applying the principles laid down in the above Judgment the Rent Controller ought to have provided a 10% escalation per year and arrived at a market value as on the date of the filing of the Rent Control Petition instead of suo moto arriving at a value of Rs.1,50,00,000/-. 27. In view of the above observations, this Court is of the considered view that the matters should be remitted back to the Appellate Authority for re-working the fair rent by taking into consideration the formulae laid down in Section 4 and the Judgments cited supra, arrive at the total land area and also the total constructed area on the land. The land area to be apportioned to the demised premises should be the result arrived at by dividing plinth area in the tenant's possession by the total plinth area in the complex.
The land area to be apportioned to the demised premises should be the result arrived at by dividing plinth area in the tenant's possession by the total plinth area in the complex. The total area of the land has to be divided by the figure arrived at supra and the result would be the proportionate land area to which the market value has to be applied to. Since there is no materials available to show the extent of the land in question the Appellate Authority shall appoint an Advocate Commissioner solely for the purpose of arriving at the extent of the land and extent upon which construction has been put up and also the total constructed area. The Appellate Authority thereafter shall pass orders fixing the fair rent. The entire exercise shall be completed within a period of four months from the date of receipt of a copy of the order. The Appellate Authority shall report compliance to this Court. The Civil Revision Petitions are disposed of with the above directions. There shall be no order as to costs. Consequently, connected Civil Miscellaneous Petitions are also closed.