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2022 DIGILAW 186 (TS)

Srinivas Bottle Trading Co v. Yegender Kumar Patel

2022-03-11

M.LAXMAN

body2022
ORDER: 1. This revision has been directed against the judgment and decree dated 17.12.2013 in R.A.No.30 of 2012 on the file of the Additional Chief Judge, City Small Causes Court, Hyderabad (lower appellate Court), whereunder the appeal filed by the tenant was dismissed confirming the order of the III Additional Rent Controller, City Small Causes Court, Hyderabad, (trial Court) in R.C.No.94 of 2009, dated 11.11.2011, whereunder fair rent was fixed and 10% increase on fair rent for every two years was granted. 2. The petitioner herein is the tenant and the respondent herein is the landlord. For the sake of convenience, the parties are hereinafter referred to as the tenant and the landlord, respectively. 3. The landlord has filed R.C.No.94 of 2009 before the trial Court for fixation of fair rent of Rs.10,000/- per month in respect of mulgi bearing No.15-1-664/8, admeasuring 10 x 18 feet (180 sft.), situated at Goshamahal, Hyderabad. The facts disclose that originally lease was commenced from 08.04.1985 with monthly rent of Rs.500/- excluding the municipal taxes and electricity consumption charges. Subsequently, the rent was increased to Rs.800/- per month apart from paying Rs.400/-per month towards maintenance charges. Earlier also, the landlord has filed R.C.No.80 of 2003 against the tenant before the trial Court and the same was dismissed, after contest, on the ground that the trial Court had no jurisdiction to try the case, since the rent payable was Rs.1,200/- per month. Challenging the same, the tenant filed R.A.No.206 of 2005 and the same was also dismissed confirming the order of the trial Court. As no revision was preferred against the said judgment, it has become final. 4. Thereafter, the landlord filed the present case for fixation of fair rent claiming that the suit mulgi is located in the heart of the city and it is surrounded by many commercial establishments. He has further claimed that the living cost has gone up and money value has come down and the rental value in the place in which the suit mulgi is located is increased in many folds. On the above grounds, the landlord sought to fixation of fair rent of Rs.10,000/- per month. 5. The tenant has filed a counter affidavit admitting the ownership of the landlord over the suit mulgi. On the above grounds, the landlord sought to fixation of fair rent of Rs.10,000/- per month. 5. The tenant has filed a counter affidavit admitting the ownership of the landlord over the suit mulgi. It is his case that the fair rent in respect of the suit mulgi was only Rs.800/- per month as on the date of filing of the application. He denied the averments that he was paying Rs.400/- per month towards maintenance charges and that the suit mulgi is located in the heart of the city. He has stated that there are no commercial buildings or business centre near to the suit mulgi. The suit mulgi is of 50 years old and there are no repairs to the same and the rent which he was paying is the fair rent and the same requires no enhancement. 6. The trial Court, on the basis of the above pleadings, has framed the following issues: “1. Whether the quantum of monthly rent is Rs.800/- or Rs.12,00/-? 2. Whether the petitioner is entitled for fixation of fair rent in respect of petition schedule premises? 3. To what relief?” 7. The landlord, to support his case, examined P.Ws.1 and 2 and relied upon Exs.P-1 to P-3 and Exs.X-1 to X-3. The tenant, to support his case, examined himself as R.W.1 and relied upon Exs.R-1 to R-5. 8. The trial Court, after appreciating the evidence on record, has partly allowed the claim of the landlord and fixed the fair rent at Rs.3,000/- per month with further enhancement of 10% for every two years on the fair rent fixed. Challenging the same, the tenant has filed R.A.No.30 of 2012 and the landlord has filed cross-objections seeking further enhancement of rent. The lower appellate Court, by judgment dated 17.03.2009, dismissed the appeal and the cross objections. Aggrieved by the dismissal of tenant’s appeal, the present Civil Revision Petition is filed. 9. The learned counsel for the appellant/tenant has contended that the trial Court, while fixing the fair rent, did not take into consideration that the suit mulgi is of 50 years old, no repairs were attended and that the existing rent, as on the date of filing of the case, was the fair rent. 9. The learned counsel for the appellant/tenant has contended that the trial Court, while fixing the fair rent, did not take into consideration that the suit mulgi is of 50 years old, no repairs were attended and that the existing rent, as on the date of filing of the case, was the fair rent. It is also his contention that the grant of enhancement of rent @ 10% for every two years on the fair rent fixed is against Section 5 of the Telangana State Buildings (Lease, Rent & Eviction) Control Act, 1960 (for short, the Act). He has relied upon the judgment of this Court in Mohd. Osman v. Smt.D.Shakuntala Bai (died), 2019 (2) R.C.R. (Rent) 319 to contend that enhancement of 10% of rent for every two years is contrary to Section 5 of the Act and such enhancement was declared to be invalid. 10. The learned counsel for the respondent/landlord has contended that the suit mulgi is located in the commercial area and it is situated near to Begum Bazar and Gosha Mahal Timber Centre, as such, there is a great demand for the mulgies on account of advantageous location of the suit mulgi. According to him, the fair rent fixed by the trial Court is meager, and hence, the same requires enhancement. He has also contended that the grant of enhancement of rent @ 10% for every two years on the fair rent fixed is in terms of the guidelines given by the Apex Court in Mohammad Ahmad v. Atma Ram Chauhan, (2011) 7 SCC 755 , wherein it is held that the fair rent should be enhanced by 10% for every three years, if there is no agreed term for enhancement of rent in between the landlord and the tenant. 11. In the light of the above submissions, the points arise for determination in the present revision are (i) whether the rent fixed by the trial Court, as affirmed by the lower appellate Court is fair rent and requires any reduction and (ii) whether grant of 10% enhancement of fair rent for every two years is contrary to Section 5 of the Act? 12. 12. A close scrutiny of the evidence on record shows that the landlord examined P.Ws.1 and 2, whose evidence clearly shows that the suit mulgi is located at Goshamahal area and there is also an admission from the tenant that the suit mulgi is located one kilometer distance to Goshamahal Timber business centre and two kilometers to Begum Bazar. It is also the admitted case of the landlord that there is no commercial shopping complex immediately opposite to the suit mulgi. The record discloses that the tenancy was commenced in the year 1985 and the case was filed in the year 2009. In the interregnum, there is huge increase in the rents in the Hyderabad city. The trial Court and the lower appellate Court have considered the increase of normal rents in the locality and also took into consideration the advantageous location of the suit mulgi i.e., located near to the commercial establishments of timber business in Goshamahal and general business in Begum Bazar while fixing the fair rent. Therefore, the fair rent fixed by the trial Court, as affirmed by the lower appellate Court, does not require any interference. Therefore, the said point is decided accordingly. 13. With regard to competency of the trial Court to grant enhancement of rent @ 10% for every two years, it is relevant to refer to Section 5 of the Act, which reads as under: “(5) In the case of a building for which the fair rent has been fixed before the commencement of this Act, the Controller shall, on the application of the landlord, allow such increase in the fair rent as in the opinion of the Controller the landlord is entitled to under this section. 5. 5. (1) When the fair rent of a building has been fixed under this Act no further increase in such fair rent shall be permissible except in cases where some addition, improvement or alteration has been carried out at the landlord’s expense and if the building is then in the occupation of a tenant, at his request: Provided that the increase shall be calculated at a rate per annum not exceeding six per cent of the cost of such addition, improvement or alteration carried out and the fair rent as increased under this sub-section shall not exceed the fair rent payable under this Act for a similar building in the same locality, with such addition, improvement or alteration: Provided further that any dispute between the landlord and the tenant in regard to any increase claimed under this sub-section shall be decided by the Controller. (2) Where, after the fair rent of a building has been fixed under this Act, there is a decrease or diminution in the accommodation or amenities provided, the tenant may claim a reduction in the fair rent as so fixed. Provided that any dispute between the landlord and the tenant in regard to any reduction so claimed shall be decided by the Controller.” 14. A reading of Section 5 (1) of the Act would show that increase in fair rent is not permissible except in cases where some addition, improvement or alteration has been carried out at the landlord’s expense. According to the learned counsel for the tenant, admittedly there is no improvement in the amenities what the tenant was enjoying when the fair rent was fixed, and when there is no improvement in respect of the amenities and property at the instance of the landlord, there is no question of increase of 10% for every two years and the same is contrary to Section 5 of the Act. 15. No doubt, this Court in Mohd. Osman’s case (supra), has taken a view that grant of increase of 10% of fair rent for every two years is contrary to Section 5 of the Act. 15. No doubt, this Court in Mohd. Osman’s case (supra), has taken a view that grant of increase of 10% of fair rent for every two years is contrary to Section 5 of the Act. It is to be noted that while passing the said judgment, this Court has not taken cognizance of the decision of the Apex Court in Mohammad Ahmad’s case (supra), whereunder the Apex Court, in order to minimize the landlord-tenant litigations which are flooding in the Courts, has given certain guidelines to be followed by the Courts and the parties. The said guidelines are as follows: “21. According to our considered view majority of these cases are filed because landlords do not get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. So before saying omega, we deem it our duty and obligation to fix some guidelines and norms for such type of litigation, so as to minimise landlord-tenant litigation at all levels. These are as follows:- (i) The tenant must enhance the rent according to the terms of the agreement or at least by ten percent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently. (ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only. (iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only. (iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord. (iv) But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties. (v) If present and prevalent market rent assessed and fixed between the parties is paid by the tenant then landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus for a period of 5 years the tenant shall enjoy immunity from being evicted from the premises. (vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter. (vii) The rent so fixed should be just, proper and adequate, keeping in mind, location, type of construction, accessibility with the main road, parking space facilities available therein etc. Care ought to be taken that it does not end up being a bonanza for the landlord.” 16. As per guideline No.1, when there is a term of agreement to enhance the rent, the same has to be honoured. In the absence of terms of agreement to enhance the rent, 10% increase shall be given effect for every three years. By seeing the guidelines, it is clear that the Apex Court has not indicated that the increase of 10% for every three years can only be resorted when there is improvement as is required under Section 5 of the Act. 17. The learned counsel for the tenant has tried to distinguish the said judgment by contending that the said guidelines were framed in the light of the provisions existing in the Utter Pradesh Rent Control Act, and hence, same cannot be taken as the law laid down by the Apex Court in respect of other States. 17. The learned counsel for the tenant has tried to distinguish the said judgment by contending that the said guidelines were framed in the light of the provisions existing in the Utter Pradesh Rent Control Act, and hence, same cannot be taken as the law laid down by the Apex Court in respect of other States. This contention has no merit for the simple reason that the law laid down by the Apex Court shall be binding on all the Courts in India by virtue of Article 141 of the Constitution of India. In K.Rojarani v. Lalitha Macherla, MANU/HY/0205/2018, the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh, has considered the guidelines framed by the Apex Court in Mohammad Ahmad’s case (supra), while disposing of the case. The Apex Court in N.Motilal v. Faisal Bin Ali, Civil Appeal No.710 of 2020, dated 30.01.2020 has upheld the grant of 10% increase for every two years, though the Court has not discussed the principle in detail. 18. As seen from the order of the trial Court, it has relied upon the decision of the then High Court of Andhra Pradesh in P.Rajanna v. Smt.K.Lalitha Reddi @ Chinnama Devi, 1995 (3) ALT 789 in fixing the additional 10% of increase on the rent for every two years. The aforesaid guidelines framed by the Apex Court show that the increase must be 10% for every three years, but in the present case, the trial Court granted increase for every two years. Such increase is not in tune with the decision of the Apex Court in Mohammad Ahmad’s case (supra) which enhancement can only for every three years. Therefore, to that extent of the order of the trial Court, as affirmed by the lower appellate Court, requires to be modified. 19. The learned counsel for the tenant has contended that the tenant may be given time to deposit the entire arrears of rent, including 10% increase, so that he can avoid eviction, which is under process for default in payment of rent, in the light of the application of the aforesaid guidelines framed by the Apex Court. The learned counsel for the landlord has opposed for the same by contending that the tenant is not honest in paying the rent fixed by the Courts below. The learned counsel for the landlord has opposed for the same by contending that the tenant is not honest in paying the rent fixed by the Courts below. If the tenant was honest in depositing the rents, there would be a justifiable case to invoke the power of this Court to give some concession by granting of time to deposit the arrears of rent in order to avoid eviction. According to him, the tenant is not paying even the basic rent of Rs.1,200/- per month, which was existing prior to initiating the rent control proceedings. Therefore, the tenant is not entitled for any sympathy. 20. I find some force in the contention of the learned counsel for the landlord. The rent control case was filed by the landlord claiming the basic rent of Rs.1,200/-. In fact, the same was confirmed by the trial Court and the same was also affirmed in the appeal. Even the rent of Rs.1,200/- per month is not being paid by the tenant and he was only paying Rs.800/- per month, which according to him is fair rent in spite of clear-cut findings of both the Courts below. If really the tenant was honest in depositing the fair rent, as fixed by the trial Court and affirmed by the lower appellate Court, during the pendency of this revision, the request of the tenant should have been considered, since he was harping upon the impugned order of granting enhancement, which according to him is contrary to Section 5 of the Act. That is not the case here and the tenant has been enjoying the property for almost all 13 years i.e., from the date of institution of rent control case till date. Therefore, the aforesaid guidelines framed by the Apex Court, which are favourable to the tenant, have no applicability to the present case for the reason that the tenant lacks bona fides in depositing the fair rent fixed which is, in fact, a meager amount considering the existing rent. Therefore, I am not inclined to extend such a benefit to the tenant. 21. In the result, the Civil Revision Petition is allowed in part. Therefore, I am not inclined to extend such a benefit to the tenant. 21. In the result, the Civil Revision Petition is allowed in part. The order dated 11.11.2011 in R.C.No.94 of 2009 on the file of the III Additional Rent Controller, City Small Causes Court, Hyderabad, as confirmed by the Additional Chief Judge, City Small Causes Court, Hyderabad, in its judgment and decree dated 17.12.2013 in R.A.No.30 of 2012, to the extent of granting enhancement of rent @ 10% for every two years on the fair rent is modified to that of granting enhancement of rent @ 10% for every three years on the fair rent and the rest of the findings are confirmed. There shall be no order as to costs. Miscellaneous petitions, if any, pending, shall stand closed.