ORDER : Anil K. Narendran, J. This Rent Control Revision filed under Section 20 of the Kerala Buildings (Lease and Rent Control) Act, 1965, arises out of the judgment dated 30.06.2015 in R.C.A.No.43 of 2014 of the Rent Control Appellate Authority (Addl. District Judge-I), Kozhikode and the order dated 15.10.2013 in R.C.P.No.53 of 2010 of the Rent Control Court (Principal Munsiff-II), Kozhikode. R.C.P.No.53 of 2010 was one filed by the 1st respondent herein-landlord, under Section 5 of the Act, seeking fixation of fair rent of the petition schedule building as Rs.5,000/- per month. The original tenant, namely, Manganthara Raveendran, died during the pendency of the Rent Control Petition and his legal representatives were impleaded as supplemental respondents 2 to 4, by the order dated 09.02.2012 in I.A.No.4590 of 2011. They are petitioners 1 and 2 and the 2nd respondent in this Rent Control Revision. The original tenant filed counter in R.C.P.No.53 of 2010, opposing the reliefs sought for. After the impleadment as supplemental respondents 2 to 4, they filed a statement adopting the contentions of the original tenant. 2. Before the Rent Control Court, on the side of the landlord, he was examined as PW1 and Exts.A1 to A6 were marked. The reports and plan of the Advocate Commissioner were marked as Exts.C1, C1(a) and C2. On the side of the legal representatives of the original tenant, the 1st petitioner herein was examined as RW1. After considering the pleadings and evidence on record, the Rent Control Court by the order dated 15.10.2013 allowed R.C.P.No.53 of 2010, fixing the fair rent of the petition schedule building at Rs.7.50 per sq.ft., from the date of the petition, which has to be increased by 10% every year. Challenging the order dated 15.10.2013 of the Rent Control Court in R.C.P.No.53 of 2010, the legal representatives of the original tenant filed R.C.A.No.43 of 2014, before the Rent Control Appellate Authority, invoking the provisions under Section 18(1)(b) of the Act. That appeal ended in dismissal by the judgment dated 30.06.2015, thereby confirming the fixation of fair rent by the Rent Control Court. Challenging the judgment dated 30.06.2015 of the Rent Control Appellate Authority in R.C.A.No.43 of 2014 and the order dated 15.10.2013 of the Rent Control Court in R.C.P.No.53 of 2010, the supplemental respondents 2 and 4 in R.C.P.No.53 of 2010 have filed this Rent Control Revision, invoking the provisions under Section 20 of the Act.
Challenging the judgment dated 30.06.2015 of the Rent Control Appellate Authority in R.C.A.No.43 of 2014 and the order dated 15.10.2013 of the Rent Control Court in R.C.P.No.53 of 2010, the supplemental respondents 2 and 4 in R.C.P.No.53 of 2010 have filed this Rent Control Revision, invoking the provisions under Section 20 of the Act. The supplemental 3rd respondent in R.C.P.No.53 of 2010 is arrayed as the 2nd respondent in this Rent Control Revision. 3. On 24.11.2015, when this Rent Control Revision came up for admission, this Court admitted the matter on the file and issued urgent notice to the respondents, returnable in ten days. 4. By the order dated 08.01.2016, this Rent Control Petition was directed to be placed before the Honourable the Chief Justice, to place the matter before a Full Bench. Paragraphs 2 to 4 of that order read thus; “2. One of the issues that arise for consideration in this revision petition is whether, while fixing the fair rent, the Rent Control Court can direct that the rent fixed by it will stand increased periodically even without a fresh application for fixation of fair rent being filed. While Sri P.A. Harish, learned counsel appearing for the tenant submits, relying on the decision of a Division Bench of this court in Kadar Pillai v. Goven Travels [ 2014 (4) KLT 593 ] that periodical enhancement cannot be granted by the Rent Control Court while fixing the fair rent, learned counsel appearing for the respondents submits, relying on the decisions of two Division Benches of this Court in Sreekumaran Nair v. V.A. Ponnuswami Chettiyar [ 2010 (3) KLT 444 ] and George v. T.K. Saidu Muhammed [ 2013 (2) KLT 513 ] that such periodical enhancement is permissible. Learned counsel appearing on both sides also invited our attention to the recent decision of a Division Bench of this court in Rajesh R. Kartha v. K.A. Ismail [ 2015 (4) KHC 408 ] wherein the Division Bench has granted only a quinquennial enhancement of fair rent by 15%. 3.
Learned counsel appearing on both sides also invited our attention to the recent decision of a Division Bench of this court in Rajesh R. Kartha v. K.A. Ismail [ 2015 (4) KHC 408 ] wherein the Division Bench has granted only a quinquennial enhancement of fair rent by 15%. 3. A reading of the decision of the Division Bench in Kadar Pillai v. Goven Travels (supra) discloses that it was after noticing the decision of the Division Bench in Sreekumaran Nair v. V.A. Ponnuswami Chettiyar (supra) that the Division Bench held that the cause of action to fix fair rent is a recurring cause of action depending upon the factors that warrant fixation of the fair rent. It was held that in an extreme case, the fair rent so fixed may have to be reduced on account of the decrease in market transactions, change of main avenue, shift of commercial activities, diversion of main road, etc. and therefore in such a situation it is not safe to award periodical increase. The Division Bench thereafter proceeded to hold that in the case before it no reasons have been assigned by the Rent Control Court to grant periodical enhancement and accordingly affirmed the decision of the Appellate Authority which had set aside the periodical enhancement granted by the Rent Control Court. The Division Bench, which decided Rajesh R. Kartha v. K.A. Ismail (supra) has not referred to the decision of the Division Bench in Sreekumaran Nair v. V.A. Ponnuswami Chettiyar (supra). In view of the conflict of judicial opinion as regards the question whether the Rent Control Court while fixing the fair rent can grant periodical increase in the fair rent so fixed, we are of the opinion that the said issue requires consideration by a Full Bench of this Court, as otherwise the Rent Control Courts/Rent Control Appellate Authorities will find it difficult to decide the question whether periodical increase in the fair rent can be granted while exercising jurisdiction under section 5(1) of the Act. 4. There is also yet another reason why we are inclined to refer this revision petition to a Full Bench for consideration.
4. There is also yet another reason why we are inclined to refer this revision petition to a Full Bench for consideration. The Apex Court has in Mohammad Ahmad and another v. Atma Ram Chauhan and others [ AIR 2011 SC 1940 ] while laying down the guidelines and norms to be followed in litigations between landlord and tenant, inter alia stipulated that if the present and prevailing market rent assessed and fixed between the parties is paid by the tenant, then the landlord shall not be entitled to bring any action for his eviction at least for a period of five years. In other words, it was stipulated that for a period of five years the tenant shall enjoy immunity from being evicted. The said stipulation was pressed into service before the Division Bench which decided Subair and others v. C.P.Kunhami Kunjhimariyam and others [ 2015 (5) KHC 260 ] wherein, the Division Bench to which one of us (P.N.Ravindran, J.) was a party, held that fair rent was fixed with effect from the date of the petition and by the time the petition for eviction was filed, the said period of five years had expired and therefore, no reliance can be placed on the decision of the Apex Court in Mohammad Ahmad and another v. Atma Ram Chauhan and others (supra) to contend for the position that the petition for eviction which was filed within a period of five years from the date of the order fixing the fair rent, is not maintainable. It is relevant in this context to note that if the guideline laid down by the Apex Court in the aforesaid decision is pressed into service, a tenant of a building in respect of which fair rent has been fixed can with impunity sub-let the tenanted premises, cause material alteration and damage to the building, refuse to pay even the fair rent fixed by the Rent Control Court and close down his business and in such eventualities, the landlord will be disabled from instituting a petition for eviction for a period of five years. There may also be cases where a dire need for own occupation may arise after the fair rent is fixed. Such being the situation, we are of the opinion that the said question also deserves to be considered by a Full Bench of this court.
There may also be cases where a dire need for own occupation may arise after the fair rent is fixed. Such being the situation, we are of the opinion that the said question also deserves to be considered by a Full Bench of this court. The question whether Sections 5, 6 and 8 of the Act which were declared to be unconstitutional and void by a Division Bench of this court in Issac Ninan v. State of Kerala [ 1995 (2) KLT 848 ] can be brought back to the statute by a court exercising the power of review or by a bench of co-ordinate strength on the reasoning that unless all or any of the provisions of the Act are thus restored, the Rent Control Courts will not be in a position to discharge their duties, has also been referred to a Full Bench of this Court as per the reference order passed on 11.9.2015 in R.C.R.Nos.203 and 348 of 2013.” 5. Heard the learned counsel for the petitioners and also the learned counsel for the 1st respondent. 6. The learned counsel for the petitioners would contend that periodical enhancement cannot be granted by the Rent Control Court while fixing the fair rent of a building. The law laid down by a Division Bench of this Court in Edger Ferus v. Abraham Itticheriya [ 2004 (1) KLT 767 ], which stands affirmed by the Apex Court in Edger Ferus v. Abraham Itticheriya [ 2009 (4) KLT 673 ], laid down the principles governing fixation of fair rent under Section 5(1) of the Act. A provision in the order passed by the Rent Control Court fixing periodical revision, without considering the question as to whether the fair rent fixed in an application under Section 5(1) of the Act requires revision upwards or downwards on account of increase or decrease in market transactions, change of main avenue, shift of commercial activities, diversion of main road, etc., is legally impermissible, which would defeat the very object and purpose of Section 5(1) of the Act. The learned counsel would place reliance on various decisions, in support of the said contention. In so far as the guidelines and norms laid down by the Apex Court in Mohammad Ahmad v. Atma Ram Chauhan [ (2011) 7 SCC 755 ] are concerned, the learned counsel would point out the peculiar facts and circumstances of that case.
The learned counsel would place reliance on various decisions, in support of the said contention. In so far as the guidelines and norms laid down by the Apex Court in Mohammad Ahmad v. Atma Ram Chauhan [ (2011) 7 SCC 755 ] are concerned, the learned counsel would point out the peculiar facts and circumstances of that case. In the said decision, the Apex Court was dealing with a case arising out of an application filed under Section 21(1)(a) of the UP Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972, against the tenants, for release of shop rooms. Before the High Court of Judicature of Allahabad, the learned counsel for the landlords submitted that the rent of the shop rooms is too meagre looking to the prevailing rent available for similarly situated shops. Therefore, a prayer was made that the rent may be increased reasonably according to the market rate. On that offer being made, the learned counsel for the tenants submitted that the case for enhancement of rent may be considered by the court, according to the condition, location and situation of the shop rooms. The decisions of the High Court and the Apex Court were rendered in the context of such an offer made by the landlords. 7. Per contra, the learned counsel for the 1st respondent would contend that the provisions under Section 5(1) of the Act and also the law laid down by the Division Bench of this Court in Edger Ferus [ 2004 (1) KLT 767 ], which stand affirmed by the Apex Court in Edger Ferus [ 2009 (4) KLT 673 ], which laid down the principles governing fixation of fair rent do not bar or interdict the Rent Control Court, while fixing fair rent of the building, from making appropriate provision for revision of the fair rent at regular intervals, at an appropriate rate, taking note of the market transactions, commercial activities, etc. The learned counsel would place reliance on various decisions in support of the said contention. The learned counsel would also point out the peculiar facts and circumstances of the case dealt with by the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ].
The learned counsel would place reliance on various decisions in support of the said contention. The learned counsel would also point out the peculiar facts and circumstances of the case dealt with by the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ]. Though the application was under the provisions of Section 21(1)(a) of the UP Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972, against the tenants for release of shop rooms, the issue considered by the High Court of Judicature of Allahabad, based on the arguments of the learned counsel on both sides, was as to whether the rent of the shop rooms can be increased reasonably according to market rate. 8. Section 5 of the Kerala Buildings (Lease and Rent Control) Act deals with determination of fair rent. As per Section 5(1), the Rent Control Court shall, on application of the tenant or landlord of a building, fix the fair rent for such building after holding such enquiry as it thinks fit. 9. In Edger Ferus [ 2004 (1) KLT 767 ] a Division Bench of this Court declared that Section 5(1) of the Act shall remain in the statute book, enabling the Rent Control Court to fix fair rent. In paragraph 14 of the order, the Division Bench laid down the principles governing the fixation of fair rent under Section 5 of the Act as follows; “14. We, therefore, enunciate the following principles; 1. Section 5(1) of the Act would remain in the statute book enabling the Rent Control Court to fix fair rent. 2. The claim for payment of any premium by way of pakidi in consideration of grant, renewal or continuance of tenancy is immoral and opposed to public policy and any agreement entered into for payment or receipt of pakidi in consideration of grant, renewal or continuance of tenancy would be unlawful and cannot be enforced through court of law, in view for the decision in Aboobacker v. Vasu [ 2003 (3) KLT 1029 ]. 3. The construction of buildings and letting them out to the tenants would come within the ambit of business under Article 19(1)(g) of the Constitution of India and hence is a fundamental right. Total prohibition in claiming enhanced rent would amount to unreasonable restriction and it would be violative of the fundamental rights of the landlords guaranteed under Article 21. 4.
The construction of buildings and letting them out to the tenants would come within the ambit of business under Article 19(1)(g) of the Constitution of India and hence is a fundamental right. Total prohibition in claiming enhanced rent would amount to unreasonable restriction and it would be violative of the fundamental rights of the landlords guaranteed under Article 21. 4. Section 116 of the Transfer of Property Act, 1882 if has the effect of imposing any restriction in the revision of rent, it would amount to unreasonable restriction affecting the fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India and to the extent of its inconsistency the said provision would be void under Article 13(1), so far as fixation of rent is concerned. 5. The judgment in P. John Zacharia and Co. v. Ittychriah [ 1987 (1) KLT 156 ], holding that even beyond the period originally stipulated, till evicted under Section 11 of the Kerala Buildings (Lease and Rent Control) Act, only the agreed rent alone is payable by the tenant is not good law and to that extent, it stands overruled. 6. The landlord or the tenant, as the case may be, can approach the Rent Control Court for revision of rent quinquennially. Even if there is no provision for periodical revision of the rent in the rent deed, even then the landlord can approach the Rent Control Court for revision of rent. We hold that the plea of continuous occupation by holding over or the protection as a statutory tenant since those rights are subservient to the fundamental rights guaranteed to the landlord under Article 19(1)(g) and 21 of the Constitution of India. 7. Rent Control Court while fixing fair rent could take note of the inflation and resultant reduction in the purchasing power of money, variations in the cost-of living index in the area since the commencement of the lease, demand for accommodation and availability of the buildings in the locality. 8. The cost of construction of the building including the cost of labour and building materials, the capital value of the entire premises in the enjoyment of the tenant inclusive of the value of the land under the actual enjoyment of the tenant whether immediately appurtenant to the building or otherwise, type of construction, locational importance, situations of the tenanted premises, ground floor, first floor, etc.
and other advantages and amenities, such as access to places of public importance like bus stand, railway station, educational institution, hospitals, etc. would also be guiding factors. 9. The Rent Control Court will also take into consideration the prevailing rent in the locality for the same and similar accommodation. The type of construction, the amenities, general or special provided in the building, and the open land attached to the building, whether residential or non-residential are also to be borne in mind. 10. Annual rental value of the building at the time of filing the application for fair rent may also be taken as a guiding factor along with others. 11. Revision or fresh imposition of municipal taxes, cess, rate in respect of other increases in the charge of electricity or water consumption by the tenant and also by the landlord and increase on account of sufficient repairs would also be taken note of by the Rent Control Court. 12. The Rent Control Court can while resolving any rent control dispute on an application either by the landlord or tenant examine whether the rent is static and requires revision and fix fair rent accordingly permitting the parties to adduce evidence. 13. The judgment of the learned Judge in George v. Narayani [ 1998 (1) KLT 239 ] fixing fair rent while reinduction under the third proviso to Section 11(4)(iv) of the Act is affirmed.” (underline supplied) 10. The principles laid down by the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ] governing the fixation of fair rent under Section 5(1) of the Act stand affirmed by the Apex Court in Edger Ferus [ 2009 (4) KLT 673 ]. 11. The provisions under Section 5 of the Act make it clear that, once the Rent Control Court is called upon either by the tenant or the landlord to decide the fair rent, it is the responsibility of the court, after holding an enquiry as it thinks fit, in the facts and circumstances of the case, to fix the fair rent. The court can take into consideration the evidence let in by the parties and relevant to the issue, while fixing the fair rent, following the guidelines laid down in Edger Ferus [ 2004 (1) KLT 767 ]. 12.
The court can take into consideration the evidence let in by the parties and relevant to the issue, while fixing the fair rent, following the guidelines laid down in Edger Ferus [ 2004 (1) KLT 767 ]. 12. In Thankamma Mathew v. Ravi Mathew [ 2005 (4) KLT 859 ] a Division Bench of this Court noticed that the concept of fair rent under the Act is evident from Section 5 of the Act. In Issac Ninan v. State of Kerala [ 1995 (2) KLT 848 ] it was held that the provisions in Sections 5, 6 and 8 of the Act are unconstitutional. Later another Division Bench in Edger Ferus [ 2004 (1) KLT 767 ] has reviewed the said decision and it is now laid down beyond doubt that Section 5(1) of the Act is perfectly constitutional and continues on the statute book and is available for enforcement. Fair rent can now be fixed under Section 5(1) of the Act. Even in the absence of Sections 5, 6 and 8 of the Act, fair rent can be fixed by the Rent Control Court when it comes to the third proviso to Section 11(4)(iv) of the Act, in respect of reconstructed premises. Whether under Section 5(1) of the Act or under the third proviso to Section 11(4)(iv), the Rent Control Court is competent to fix fair rent. If there is no agreement between the parties, either party can approach the Rent Control Court to get the fair rent fixed in accordance with Section 5(1) or under Section 11(4)(iv). That right of the parties cannot be doubted or disputed. 13. In Sreekumaran Nair v. A. Ponnuswami Chettiyar [ 2010 (3) KHC 423 ] a Division Bench of this Court was dealing with a case in which the tenant filed the Rent Control Revision against the concurrent findings of the Rent Control Court as well as the Appellate Authority fixing fair rent and allowing a periodic increase of 10% in the fair rent every year. The Division Bench found that the fair rent fixed was reasonable considering the location and the status of the building. Before the Division Bench, it was urged that the decision of the authorities allowing 10% annual increase in the fair rent is contrary to law.
The Division Bench found that the fair rent fixed was reasonable considering the location and the status of the building. Before the Division Bench, it was urged that the decision of the authorities allowing 10% annual increase in the fair rent is contrary to law. The Division Bench noticed that a cursory reading of Section 5(1) of the Act, which stands restored to the statute book by the decision of the Apex Court in Edger Ferus [ 2009 (4) KLT 673 ], approving the decision of this Court in Edger Ferus [ 2004 (1) KLT 767 ], can give room for an argument that the Rent Control Court has the power to fix only a definite amount as fair rent for a given building and has no power to permit periodical increase on the fair rent so fixed. The Rent Control Appellate Authority noticed several relevant aspects such as the value of money being on the decline, the corresponding increase in the value of land, inflationary trends in the economy and also the regular growth of the city as a whole, etc. These reasons are good reasons which can justify the decision to allow an increase on the fair rent at a reasonable rate, at regular intervals. The Division Bench noticed that, had Section 6(1) of the Act continued on the statute book, perhaps the ground raised by the revision petitioner against the periodical increase permitted by the Rent Control Appellate Authority would have been stronger. But Section 6 and Section 7 of the Act were struck down in Issac Ninan [ 1995 (2) KLT 848 ] and that judgment has been reviewed in Edger Ferus [ 2004 (1) KLT 767 ] to the extent of restoring Section 5(1). Hence, in Sreekumaran Nair, the Division Bench held that the authorities under the Act have the power not only to fix fair rent but also to allow reasonable modifications to the rate so fixed at reasonable intervals by the order fixing fair rent itself. 14. In George v. T.K. Saidu Muhammed [ 2013 (2) KHC 326 ] another Division Bench of this Court noticed that, under Section 5(1) of the Act, an application for fixation of fair rent can be filed by the tenant or the landlord.
14. In George v. T.K. Saidu Muhammed [ 2013 (2) KHC 326 ] another Division Bench of this Court noticed that, under Section 5(1) of the Act, an application for fixation of fair rent can be filed by the tenant or the landlord. In the Rent Control Petition, the landlord sought for fixation of fair rent after raising various pleas including important developments in the locality and other relevant factors. All those are factors which are relevant, in the light of the decision of this Court in Edger Ferus [ 2004 (1) KLT 767 ], wherein the Division Bench held that Section 5(1) of the Act will remain in the Statute book enabling the Rent Control Court to fix fair rent and other parameters for fixing fair rent have also been laid down therein. As per paragraph 14(6) of the said decision, the landlord or the tenant, as the case may be, can approach the Rent Control Court for revision of rent quinquennially. The Division Bench held that, even if there is no provision for periodical revision of the rent in the rent deed, the landlord can approach the Rent Control Court for revision of rent. Going by paragraph 14(7), in fixing fair rent the Rent Control Court could take note of the inflation and resultant reduction in the purchasing power of money, variations in the costof- living index in the area since the commencement of the lease, demand for accommodation and availability of the buildings in the locality. The prevailing rent in the locality for the same and similar accommodation, the type of construction and the amenities, general or special, are all factors which have been specified in paragraph 14(9) of the said decision. 15. In George [ 2013 (2) KHC 326 ], on the facts of the case on hand, the Division Bench found that the above factors have been considered by both the Rent Control Court as well as by the Appellate Authority. The relevant evidence has been considered in finding that the landlord is entitled to fixation of fair rent, as the initial rent was fixed in the year 1989 and the petition was filed on 15.12.2004. After referring to the decisions of this Court, the fair rent has been fixed by the Rent Control Court. The Appellate Authority in para. 10 of the judgment, found that the area is 250 sq.ft. and Rs.15/- per sq.ft.
After referring to the decisions of this Court, the fair rent has been fixed by the Rent Control Court. The Appellate Authority in para. 10 of the judgment, found that the area is 250 sq.ft. and Rs.15/- per sq.ft. can be fixed as a reasonable amount. Accordingly, the fair rent has been fixed at Rs.3,750/- with a periodical increase of 5% every year. The Division Bench held that the fair rent will be as fixed by the Appellate Authority at the rate of Rs.3,750/- per month with a periodical increase at the rate of 5% every year, as already ordered by both the authorities. The Division Bench found that the method adopted cannot be said to be defective or unsupportable and it cannot also be said to be perverse. Therefore, the Division Bench confirmed the fixation of fair rent with a 5% periodical increase every year. 16. In Kadar Pillai K.S. v. Goven Travels [ 2014 (4) KHC 535 ] another Division Bench of this Court was dealing with a case in which the Rent Control Court fixed fair rent from the date of application with an enhanced rate of rent of 10% in every two years. The Rent Control Appellate Authority restricted the fixation of fair rent from the date of the order passed by the Rent Control Court and also vacated the 10% enhancement ordered by the Rent Control Court. The Rent Control Court relied on the lease deeds executed in favour of the landlord by other tenants, who were inducted in possession of the upstairs portion of the building in the year 2007- 09. After referring to the decision in George [ 2013 (2) KHC 326 ], wherein it was held that fixation of fair rent is to be ordered by the Rent Control Court from the date of application or petition, the Division Bench noticed that the rights and liabilities of the parties to the lis have to be determined with reference to the date of filing of the petition. However, in the matter relating to the fair rent fixation, there can be a departure from the said rule on a finding that reliance placed by the landlord for fixation of fair rent is based on a material that has arisen subsequent to the filing of the petition. The fair rent is fixed based on the prevailing rate of rent in the locality for similar buildings.
The fair rent is fixed based on the prevailing rate of rent in the locality for similar buildings. The components of fair rent depend upon the market criteria related to the fixation of fair rent. These components are liable for changes and fluctuations. The court has to advert to the market criteria that might have become prevalent in the locality and the date of commencement of such criteria by marshalling the factors that require to establish fair rent fixation. If those conditions exist as on the date of application for fixation of fair rent, necessarily, the court has to fix the fair rent as on the date of application. In Kadar Pillai K.S. [ 2014 (4) KHC 535 ], on the facts of the case on hand, the Division Bench noticed that the documents produced by the landlord clearly indicate that the rent at the rate of Rs.30/- per sq.ft. was prevailing before the application for fixation of fair rent. In such circumstances, the fair rent that should have been fixed from the date of application. Accordingly, the Division Bench affirmed the decision of the Rent Control Court and vacated the order passed by the Appellate Authority, restricting fair rent from the date of the order. 17. In Kadar Pillai K.S. [ 2014 (4) KHC 535 ] another question before the Division Bench was as to whether the Rent Control Court is justified in granting periodical enhancement of fair rent, at the rate of 10% every two years. The Division Bench noticed that, in Sreekumaran Nair [ 2010 (3) KHC 423 ], on the question as to whether the decision of the statutory authorities to allow 10% increase in fair rent per year can be approved, another Division Bench held that the aspects noticed by the Rent Control Court, like the value of money is on the decline, the corresponding increase in the value of land, inflationary trends in the economy and also the regular growth of the city as a whole, etc. are good reasons which can justify the decision to allow an increase on the fair rent, at a reasonable rate, at regular intervals. Those factors can be taken note of for periodical enhancement. But those general factors are to be shown to exist while granting periodical enhancement. The Rent Control Court cannot routinely allow reasonable modification to rates so fixed.
are good reasons which can justify the decision to allow an increase on the fair rent, at a reasonable rate, at regular intervals. Those factors can be taken note of for periodical enhancement. But those general factors are to be shown to exist while granting periodical enhancement. The Rent Control Court cannot routinely allow reasonable modification to rates so fixed. It has to be remembered that the right of the landlord to approach the court again for fair rent fixation is not foreclosed by fixing a fair rent by the Rent Control Court. The cause of action to fix fair rent is a recurring cause of action depending upon factors that warrant the fixation of the fair rent. In an extreme case, there may warrant a reduction of the fair rent so fixed on account of the decrease in market transactions, change of the main avenue, the shift of commercial activities, diversion of the main road etc. Therefore, in such situation it is not safe to award periodical increase. In Kadar Pillai K.S. [ 2014 (4) KHC 535 ], on the facts of the case on hand, the Division Bench found that no reason has been assigned by the Rent Control Court in granting periodical enhancement. Therefore, the Division Bench affirmed the decision of the Appellate Authority in setting aside the periodical enhancement. 18. In Kadar Pillai K.S. [ 2014 (4) KHC 535 ] the Division Bench restored Section 5(5) of the Act and directed all Rent Control Courts to intimate the fair rent fixed on the building to the local authority in terms of Section 5(5). However, a Full Bench of this Court in Selvaraj v. U. Murugadas [ 2021 (3) KHC 292 ] held that Kadar Pillai K.S. to the extent it directs restoration of Section 5(5) to the Act is not good law. 19. In Rajesh R. Kartha v. K.A. Ismail [ 2015 (4) KHC 408 ], a Division Bench of this Court held that fixation of fair rent under Section 5(1) of the Act should be on sound reasoning and based on satisfactory and sufficient authoritative materials indicative of the parameters laid down by Division Bench of this Court in Edger Ferus [ 2004 (1) KLT 767 ], which stand affirmed by the Apex Court in Edger Ferus [ 2009 (4) KLT 673 ].
The guidelines enumerated therein are not exhaustive, which are some of the parameters meant to be looked into by the courts empowered under Section 5(1) of the Act to deal with the question of fixation of fair rent. The parameters laid down therein are directives to the authorities who are shouldered with the power to fix fair rent under Section 5(1) of the Act and they are expected to exercise discretion within that sphere. In the decision in Rajesh R. Kartha [ 2015 (4) KHC 408 ], without any reference to the law laid down by the Division Bench of this Court in Sreekumaran Nair [ 2010 (3) KLT 444 ] and George [ 2013 (2) KLT 513 ], the Division Bench granted a quinquennial revision of fair rent by 15%. In paragraph 60 of the said decision, the Division Bench noticed that, in view of the progress likely to accrue to the business in the locality on account of the construction of Metro Rail and the tremendous development in Kochi City taking place day by day a quinquennial revision at the rate of 15% is reasonable. Therefore, while fixing fair rent of the building at the rate of Rs.55/- per sq.ft, with effect from the date of Rent Control Petition, i.e., 23.12.2012, the Division Bench enhanced the monthly rent payable from Rs.1,500/- to Rs.13,000/- with 15% quinquennial enhancement. 20. In Rajesh R. Kartha [ 2015 (4) KHC 408 ], on the facts of the case on hand, the Division Bench noticed that the petition schedule building is situated on the ground floor of a multi-storied building where Paramara Road joins Banerjee Road. On the southern side of the building is Banerjee Road and the western side is Paramara Road. The building has got direct access from the aforesaid two public roads. The land on which the said building is located is in a commercial area where so many commercial buildings dealing with various items are located. There are banks, commercial institutions, educational institutions, hotels, clinics, petrol pumps, shopping centres, etc., in the vicinity of the said building. Bus stops situate adjacent to the said building. There are various public utility services in the locality where the building is located. The North Railway Station is hardly 250 meters away from the said building.
There are banks, commercial institutions, educational institutions, hotels, clinics, petrol pumps, shopping centres, etc., in the vicinity of the said building. Bus stops situate adjacent to the said building. There are various public utility services in the locality where the building is located. The North Railway Station is hardly 250 meters away from the said building. Kaloor Junction and Kacheripady Junction are two important areas having commercial potential, which are in the vicinity of the said building. 21. In Thomas M. Joshua v. Church of South India Trust Association [ 2019 (3) KHC 316 ] a Division Bench of this Court noticed that the proposition that could be culled out from the decision in Kadar Pillai K.S. [ 2014 (4) KHC 535 ] is that the rights and liabilities of the parties to the lis are to be determined from the date of institution of the Rent Control Petition and it is the general rule. So, the fair rent is to be fixed from the date of institution of the Rent Control Petition. But, in exceptional cases, where reliance is placed by the landlord, for fixation of fair rent, on a material which had arisen subsequent to the filing of the Rent Control Petition, the fair rent has to be fixed from the date of the order. In Thomas M. Joshua the Division Bench held that, where the Rent Control Court determines the fair rent on the basis of the material evidence, which would show the prevailing rent of similar buildings, at the time of passing of the order, the fair rent must be fixed from the date of the order and not from the date of institution of the Rent Control Petition. On the other hand, if the determination of fair rent is on the basis of the material, which would show the prevailing rent at the time of institution of the Rent Control Petition, the fair rent is liable to be fixed and put it in operation from the date of institution of the Rent Control Petition. 22.
On the other hand, if the determination of fair rent is on the basis of the material, which would show the prevailing rent at the time of institution of the Rent Control Petition, the fair rent is liable to be fixed and put it in operation from the date of institution of the Rent Control Petition. 22. In Selvaraj v. U. Murugadas [ 2021 (3) KHC 292 ] the correctness of the decision in Edger Ferus [ 2004 (1) KLT 767 ] reviewing its judgment in Issac Ninan [ 1995 (2) KLT 848 ] to a limited extent, by which Section 5(1) of the Act has been restored back to the statute book, was considered by a Full Bench of this Court. In the order of reference, the Division Bench observed that though Sections 5, 6 and 8 of the Act have been declared to be ultra vires the Constitution and void in Issac Ninan [ 1995 (2) KLT 848 ], in a review petition filed after 9 years, in Edger Ferus [ 2004 (1) KLT 767 ], this Court had restored Section 5(1) to the Statute. In Edger Ferus [ 2004 (1) KLT 767 ], two Civil Revision Petitions and the Review Petition in Isaac Ninan [ 1995 (2) KLT 848 ] were decided as per a common judgment. The Civil Revision Petitions, which were the subject matter in Edger Ferus [ 2004 (1) KLT 767 ] alone came to be challenged before the Apex Court by filing Civil Appeal Nos.7088-89 of 2004 and those were dismissed by the order dated 04.11.2009 - Edger Ferus [ 2009 (4) KLT 673 ]. Another Division Bench in Kadar Pillai [ 2014 (4) KHC 535 ] again passed an order restoring Section 5(5) to the Statute book. In the order of reference, it was observed that, the Division Bench could not have exercised the power of review after 9 years of the provision of law being declared unconstitutional and void and could not have restored the said provision to the statute book.
In the order of reference, it was observed that, the Division Bench could not have exercised the power of review after 9 years of the provision of law being declared unconstitutional and void and could not have restored the said provision to the statute book. Therefore, in the order of reference, the Division Bench found the necessity of an authoritative pronouncement of the question as to whether any of the provisions contained in Sections 5, 6 and 8, which had been declared to be ultra vires, unconstitutional and void in Issac Ninan [ 1995 (2) KLT 848 ] can be brought back to the statute book by a Court exercising power of review or by a Bench of co-ordinate strength. 23. In Selvaraj [ 2021 (3) KHC 292 ] the Full Bench found that in Edger Ferus [ 2004 (1) KLT 767 ] the Division Bench had given sufficient reasons and under what circumstances Section 5(1) of the Act had to be brought back to the statute book. The Division Bench held that, if Section 5(1) of the Act is not in the statute book, several other provisions in the Act would become ineffective and unworkable. The review in Edger Ferus [ 2004 (1) KLT 767 ] has been allowed, taking note of various factors, the plight of the litigants, the lethargic approach of the Government in enacting comprehensive legislation, etc. In Edger Ferus [ 2004 (1) KLT 767 ], other than taking note of the approach taken by the Government, this Court had also clearly observed that the challenge in Issac Ninan [ 1995 (2) KLT 848 ] was only with regard to Sections 6 and 8 of the Act, whereas the Court declared Sections 5, 6 and 8 as unconstitutional. The only grievance of the review petitioner was that Section 5(1) of the Act has not been severed from the remaining objectionable provisions. Apparently, while considering the review, the Division Bench proceeded on the basis that Section 5(1) by itself was not unconstitutional, whereas if the said provision is not retained and necessary parameters are not laid down for proper fixation of fair rent, the intention and object of the Act will be defeated and the litigant public will be prejudiced.
Apparently, while considering the review, the Division Bench proceeded on the basis that Section 5(1) by itself was not unconstitutional, whereas if the said provision is not retained and necessary parameters are not laid down for proper fixation of fair rent, the intention and object of the Act will be defeated and the litigant public will be prejudiced. The Full Bench found no error being committed by the Division Bench, taking note of the mistake or error which was apparent on the face of the record, in declaring Section 5(1) of the Act also as unconstitutional. Hence, it was well within the powers of the Division Bench to review its earlier view in Isaac Ninan [ 1995 (2) KLT 848 ], taking note of various factors including the fact that Section 5(1) was not substantially challenged by the petitioner. Therefore, the Full Bench held that the Division Bench was justified in reviewing the judgment in Issac Ninan [ 1995 (2) KLT 848 ], further, this Court expected the Government to bring comprehensive legislation and when it was found that after a period 9 years, no such legislation had been enacted, the Court was evolving mechanisms to consider issues relating to fixation of fair rent. Therefore, it was all the more necessary that a forum is provided to consider claims for fixation of fair rent. However, the principles argued by learned counsel for the tenant squarely apply to the judgment in Kader Pillai [ 2014 (4) KHC 535 ], wherein a Division Bench of this Court restored Section 5(5) of the Act to the statute book. It is trite law that once a provision of law has been declared unconstitutional, the Court cannot legislate and restore the same to the statute. It is as if there is no provision at all. The judgment in Edger Ferus [ 2004 (1) KLT 767 ] stands in a slightly different situation insofar as the Division Bench was considering a review petition in Issac Ninan [ 1995 (2) KLT 848 ] along with two other Civil Revision Petitions. The Full Bench answered the reference as follows; (i) Edger Ferus [ 2004 (1) KLT 767 ] holds the field and the reference is answered accordingly. (ii) Kader Pillai [ 2014 (4) KHC 535 ] to the extent it directs restoring of Section 5(5) to the Act, is not good law and is hereby overruled. 24.
The Full Bench answered the reference as follows; (i) Edger Ferus [ 2004 (1) KLT 767 ] holds the field and the reference is answered accordingly. (ii) Kader Pillai [ 2014 (4) KHC 535 ] to the extent it directs restoring of Section 5(5) to the Act, is not good law and is hereby overruled. 24. In Sreekumaran Nair [ 2010 (3) KHC 423 ], while upholding the concurrent findings of the Rent Control Court as well as the Appellate Authority fixing fair rent and allowing a periodic increase of 10% in the fair rent every year, a Division Bench of this Court held that the authorities under the Act have the power not only to fix fair rent but also to allow reasonable modifications to the rate so fixed at reasonable intervals by the order fixing fair rent itself. On the facts of the case on hand, the Division Bench noticed that the Rent Control Appellate Authority noticed several relevant aspects such as the value of money being on the decline, the corresponding increase in the value of land, inflationary trends in the economy and also the regular growth of the city as a whole, etc., which are good reasons to justify the decision to allow an increase on the fair rent at a reasonable rate, at regular intervals. Had Section 6(1) of the Act continued on the statute book, perhaps the ground raised by the revision petitioner against the periodical increase permitted by the Rent Control Appellate Authority would have been stronger. 25. In George [ 2013 (2) KHC 326 ], while upholding the concurrent findings of the Rent Control Court as well as the Appellate Authority fixing fair rent and allowing a periodic increase of 5% in the fair rent every year, another Division Bench of this Court found that the method adopted by the Rent Control Court, as well as the Appellate Authority, cannot be said to be defective or unsupportable and it cannot also be said to be perverse. On the facts of the case on hand, the Division Bench noticed that, in the Rent Control Petition, the landlord sought for fixation of fair rent after raising various pleas including important developments in the locality and other relevant factors. All those are factors which are relevant, in the light of the decision of the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ].
All those are factors which are relevant, in the light of the decision of the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ]. 26. In Kadar Pillai K.S. [ 2014 (4) KHC 535 ], on the question as to whether the Rent Control Court was justified in granting periodical enhancement of fair rent 10% every two years, another Division Bench of this Court held that the aspects noticed by the Rent Control Court, like the value of money is on the decline, the corresponding increase in the value of land, inflationary trends in the economy and also the regular growth of the city as a whole, etc. are good reasons which can justify the decision to allow an increase on the fair rent, at a reasonable rate, at regular intervals. Those factors can be taken note of for periodical enhancement. But those general factors are to be shown to exist while granting periodical enhancement. 27. In Rajesh R. Kartha [ 2015 (4) KHC 408 ], without any reference to the law laid down by the Division Bench of this Court in Sreekumaran Nair [ 2010 (3) KLT 444 ] and George [ 2013 (2) KLT 513 ], the Division Bench granted a quinquennial revision of fair rent by 15%. The reasoning of the Division Bench in paragraph 60 of the said decision is that, in view of the progress likely to accrue to the business in the locality on account of the construction of Metro Rail and the tremendous development in Kochi City taking place day by day a quinquennial revision at the rate of 15% is reasonable. 28. In State Bank of India v. Prasanna Kumari and others [ 2019 (2) KHC 575 ] a Division Bench of this Court noticed that there is no provision prohibiting institution of a Rent Control Petition, where there is an agreement between the landlord and tenant for periodical enhancement of rent during the period of the lease deed. On the other hand, according to Section 11(9) of the Act, where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply to the Rent Control Court for eviction of the tenant before the expiry of such period.
On the other hand, according to Section 11(9) of the Act, where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply to the Rent Control Court for eviction of the tenant before the expiry of such period. The Legislature was so conscious to omit such a bar against institution of Rent Control Petition seeking fixation of fair rent even if there is an agreement between the landlord and the tenant fixing the rent with provision for periodical enhancement. The absence of such a statutory bar gives rise to an inference that the Legislature has consciously permitted the landlord to approach the Rent Control Court to get the fair rent determined, notwithstanding the stipulation regarding periodical enhancement in the lease agreement. Therefore, an agreement fixing the rent with periodical enhancement at a specified rate, between the landlord and tenant, will not preclude the landlord from instituting a rent control petition invoking Section 5(1) of the Act, for fixation of fair rent. 29. On the question as to whether the Rent Control Court while fixing the fair rent under Section 5(1) of the Kerala Buildings (Lease and Rent Control) Act can grant periodical increase in the fair rent so fixed, we notice that, in view of the law laid down by the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ], Section 5(1) of the Act shall remain in the statute book, enabling the Rent Control Court to determine fair rent of the building, after holding such enquiry as it thinks fit. An application under Section 5(1) of the Act for the determination of fair rent can be filed before the Rent Control Court, either by the tenant or the landlord of a building. 29.1. The principles governing the determination of fair rent are contained in paragraphs 14(7) to (11) of the decision in Edger Ferus [ 2004 (1) KLT 767 ], which stand affirmed by the Apex Court in Edger Ferus [ 2009 (4) KLT 673 ]. An agreement between the landlord and tenant fixing the rent with periodical enhancement at a specified rate, will not preclude the landlord from instituting a Rent Control Petition invoking Section 5(1) of the Act, for fixation of fair rent.
An agreement between the landlord and tenant fixing the rent with periodical enhancement at a specified rate, will not preclude the landlord from instituting a Rent Control Petition invoking Section 5(1) of the Act, for fixation of fair rent. Even if there is no provision for periodical revision of the rent in the rent deed, the landlord or the tenant, as the case may be, can approach the Rent Control Court for revision of rent quinquennially. While resolving any rent control dispute on an application, either by the landlord or tenant, the Rent Control Court can examine whether the rent is static and requires revision and fix fair rent accordingly, permitting the parties to adduce evidence. 29.2. The Rent Control Court, while fixing fair rent, should take note of the inflation and resultant reduction in the purchasing power of money, variations in the cost-of-living index in the area since the commencement of the lease, demand for accommodation and availability of the buildings in the locality; the cost of construction of the building, including the cost of labour and building materials and other parameters in paragraph 14(8) of the decision in Edger Ferus [ 2004 (1) KLT 767 ]; the prevailing rent in the locality for the same and similar accommodation and other parameters in paragraph 14(9) of the said decision; the annual rental value of the building at the time of filing the application for fair rent; revision or fresh imposition of municipal taxes, cess and other parameters in paragraph 14(11) of the said decision. 29.3. As held by the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ], the construction of buildings and letting them out to the tenants would come within the ambit of business under Article 19(1)(g) of the Constitution of India and hence is a fundamental right. A total prohibition in claiming enhanced rent would amount to unreasonable restriction and it would be violative of the fundamental rights of the landlords guaranteed under Article 21. 29.4. As held by the Division Bench in Kadar Pillai K.S. [ 2014 (4) KHC 535 ], the cause of action to fix fair rent is a recurring cause of action, depending upon the factors that warrant fixation of the fair rent, as contained in paragraphs 14(7) to (11) of the decision of the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ].
The right of the landlord to approach the Rent Control Court for revision of rent quinquennially, in view of the law laid down by the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ], is not foreclosed by the order of the Rent Control Court fixing fair rent of a building in an application under Section 5(1) of the Act. 29.5. In exceptional cases, the situation may warrant a reduction of the fair rent fixed under Section 5(1) of the Act, on account of a tremendous decrease in market transactions in the locality, a shift of the main avenue or commercial activities, a diversion of the main road, etc.; or an increase of the fair rent so fixed, on account of a tremendous increase in market transactions in the locality, developments in the locality on account of the construction of metro rail, major roads, etc. The right of the tenant or the landlord, as the case may be, to approach the Rent Control Court in such exceptional cases for reduction or increase of fair rent already fixed, is not foreclosed by the order of the Rent Control Court fixing or revising fair rent quinquennially, in an application under Section 5(1) of the Act. 29.6. Regular growth of the city as a whole, regular inflationary trends in the economy, regular increase in the land value, etc. are good reasons for the Rent Control Court to grant a periodical increase of the fair rent fixed under Section 5(1) of the Act, at a reasonable rate, say 5% to 10%, at reasonable intervals, say every year or every two years. As held by the Division Bench in Kadar Pillai K.S. [ 2014 (4) KHC 535 ], the Rent Control Court cannot routinely grant periodical increase of the fair rent fixed under Section 5(1) of the Act. The burden of proof is on the landlord to establish before the Rent Control Court, with reliable materials, the existence of the aforesaid general factors, for granting such periodical increase. 29.7.
The burden of proof is on the landlord to establish before the Rent Control Court, with reliable materials, the existence of the aforesaid general factors, for granting such periodical increase. 29.7. Even in a case in which the Rent Control Court granted periodical increase of the fair rent fixed under Section 5(1) of the Act, the right of the tenant or the landlord, as the case may be, to approach the Rent Control Court for revision of the fair rent, on account of the situations in Para.29.5 above, that may warrant a reduction or increase of the fair rent so fixed, is not foreclosed by the order of the Rent Control Court under Section 5(1) of the Act granting periodical increase of the fair rent, at regular intervals. 29.8. The first question of law referred to the Full Bench as to whether the Rent Control Court while fixing the fair rent under Section 5(1) of the Act can grant periodical increase in the fair rent so fixed is answered as above. 30. We shall now deal with the second question referred to the Full Bench on the guidelines and norms laid down by the Apex Court in Mohammad Ahmad v. Atma Ram Chauhan [ (2011) 7 SCC 755 ], to be followed in litigations between landlord and tenant. 31. In Mohammad Ahmad [ (2011) 7 SCC 755 ] the Apex Court was dealing with a case in which the appellants are the tenants of two shops admeasuring 10x12 feet each, equivalent to 240 sq.ft., situated at National Highway Chakrata Saharanpur (U.P.). The 1st respondent, who was working as the Medical Officer at Zila Parishad, Saharanpur, retired on 31.07.1992. For his personal need, he bona fide needed two shops, i.e., the east-facing room (for consultation and setting up medical equipment) and the adjoining west-facing room (to serve as a waiting room for patients). The landlords (respondents 1 to 3) requested both the appellants and the 4th respondent to release any one pair of the shops, but neither of them acceded to his request. They filed an application under Section 21(1)(a) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 against the appellants as well as the 4th respondent praying for the release of any one pair of the said two pairs of shops in his favour.
They filed an application under Section 21(1)(a) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 against the appellants as well as the 4th respondent praying for the release of any one pair of the said two pairs of shops in his favour. At that time the appellants were paying rent at Rs.40 and Rs.20/- per month (total rent Rs.60/-) for the pair of shops in their possession. The matter was contested by the appellants before the Prescribed Authority, Additional Civil Judge-IV, Saharanpur, whereby and whereunder the said authority allowed the application of the landlords and on a comparative assessment of facts and circumstances, released the property in which the 4th respondent was a tenant. Feeling aggrieved, Rent Control Appeals were preferred by the landlords and also the 4th respondent before the Appellate Authority, the Additional District Judge, Saharanpur. Vide the judgment dated 24.08.2004, the Appellate Authority modified the decree of the Prescribed Authority to the extent that the pair of shops in the tenancy of the Appellants before the Apex Court be released, instead of the pair of shops in the possession of the 4th respondent, as decreed by the Prescribed Authority, and furthermore, they were directed to deliver peaceful and vacant possession thereof to respondents 1 to 3 (landlords), within one month from the date of the said order. Thus, the order of release passed by the Prescribed Authority came to be partially modified by the Appellate Authority, inasmuch as the order of release for two shops in their favour was maintained. Feeling aggrieved by the judgment of the Appellate Authority, the Appellants before the Apex Court preferred Writ Petition before the High Court of Judicature at Allahabad. While considering the application for stay, the learned Single Judge, by the order dated 14.09.2002, directed that the appellants will not be dispossessed from the shops in dispute, provided, they pay the landlords rent at the rate of Rs.600/- per month with effect from September, 2005 onwards and by 7th of each succeeding month. In case of two defaults, the stay order would stand vacated automatically. Non-payment of rent may also be a ground for dismissal of the writ petition.
In case of two defaults, the stay order would stand vacated automatically. Non-payment of rent may also be a ground for dismissal of the writ petition. On 13.02.2007, when the Writ Petition came up for hearing before another learned Single Judge, the learned counsel for the landlords submitted that the rent of the shops is too meagre, looking to the present rent available for other similarly situated shops, so a prayer was made that it be increased reasonably according to market rate. On this offer being made, learned counsel appearing for the appellants submitted that the case for enhancement of rent may be considered by the court according to the condition, location and situation, etc. of the tenanted shops. It was further submitted that, in case the appellants are evicted from the disputed shops, then they would suffer irreparable loss and injury. Lastly, it was contended by them that, even though many accommodations are available nearby, none would be available at the rent, which is being paid presently by appellants to the landlords. In the light of the aforesaid offer having been made by the landlords and duly considered by the appellants, the learned Single Judge thought it fit to enhance the rate of rent from Rs.600/- per month for both the shops to Rs.2,100/- per month, payable from February 2007 onwards. Even though the appellants' writ petition was kept pending and directed to be listed in the month of July, 2007, for reporting compliance of the aforesaid directions, the appellants feeling aggrieved thereof have preferred appeal before the Apex Court on a variety of grounds. 31.1. In Mohammad Ahmad [ (2011) 7 SCC 755 ], before the Apex Court, the first thrust of the arguments of the learned counsel for the appellants was that, the rent having been enhanced to Rs.600/- per month only on 14.09.2005, no case was made out for further enhancement from Rs.600/- to Rs.2,100/- per month, vide the impugned order dated 13.02.2007, within two years thereof. Further, the Apex Court has severely deprecated the practice of enhancement of rent in petitions filed under Article 226 or 227 of the Constitution of India, during the pendency of those petitions before the High Court, that too without any valuation report. In support of the said contention, the learned counsel for the appellants cited unreported judgments/orders of the Apex Court in Md.
In support of the said contention, the learned counsel for the appellants cited unreported judgments/orders of the Apex Court in Md. Iqbal v. Atma Ram and others - order dated 19.01.2009 in Civil Appeal No.316 of 2009; Md. Safi (died) through his LRs. and others v. Sri Farhat Ali Khan - order dated 03.01.2008 in Civil Appeal No.14 of 2008 and Sadan Gopal Gautam v. Sushila Devi and others - order dated 20.10.2008 in Civil Appeal No.6171 of 2008. 31.2. In Mohammad Ahmad [ (2011) 7 SCC 755 ] the Apex Court noticed that in the aforesaid cases neither there was any offer made by the landlord nor any corresponding acceptance by the tenant, still the High Courts in each of such cases enhanced the rates of rent unilaterally. But, in the case on hand, it is clearly reflected that the landlords made an offer to the appellants-tenants which they agreed, only thereafter that the rent was enhanced from Rs.600/- per month to Rs.2,100/- per month, for both the shops. Thus, the ratio of the judgments/orders cited by the learned counsel for appellants has no application to the facts of the case on hand. Before the Apex Court, the learned counsel for the landlords contended that the building in the case on hand, known as Jaitpur House, with the passage of time, has come within the market area of Saharanpur, and can therefore be called a building falling within the meaning of a commercial area. Further, looking to various factors such as the nature of construction, its prime location in the city, being situated on the main highway, and thus having easy accessibility to it and the availability of all other amenities and facilities, etc., even the rent fixed by learned Single Judge at the rate of Rs. 2100/- per month for both the shops is on the lower side and too meagre. The total area under the occupation of the appellants is 240 sq.ft. With the rent fixed at Rs.2,100/-, the rate of rent comes to Rs.87.50 per sq.ft., which according to the learned counsel for the landlords is too low, keeping in mind the present trend and the prevalent market rate of rent. 31.3.
The total area under the occupation of the appellants is 240 sq.ft. With the rent fixed at Rs.2,100/-, the rate of rent comes to Rs.87.50 per sq.ft., which according to the learned counsel for the landlords is too low, keeping in mind the present trend and the prevalent market rate of rent. 31.3. In Mohammad Ahmad [ (2011) 7 SCC 755 ], the Apex Court, after looking into the matter from all angles, opined that the rent fixed by the learned Single Judge for the two shops having a total area of 240 sq.ft. to Rs. 2100/- per month is not only reasonable but would be just and proper. Any enhancement in rent will not ipso facto be deemed to be unreasonable and exorbitant unless the party aggrieved is able to give cogent reasons for the same. In this context, the Apex Court referred to the decision in Atma Ram Properties (P) Ltd. v. Federal Motors Pvt. Ltd. [ (2005) 1 SCC 705 ], the relevant portion thereof is reproduced hereinbelow; "In the case at hand, it has to be borne in mind that the tenant has been paying Rs.371.90 rent for the premises since 1944. The value of real estate and rent rates have skyrocketed since that day. The premises are situated in the prime commercial locality in the heart of Delhi, the Capital City. It was pointed out to the High Court that adjoining premises belonging to the same landlord admeasuring 2,000 sq.ft. have been recently let out on rent at the rate of Rs.3,50,000/- per month. The Rent Control Tribunal was right in putting the tenant on terms of payment of Rs.15,000/- per month charges for use and occupation during the pendency of the appeal. The Tribunal took extra care to see that the amount was retained in deposit with it until the appeal was decided so that the amount in the deposit could be disbursed by the Appellate Court consistently with the opinion formed by it at the end of the appeal. No fault can be found with the approach adopted by the Tribunal. The High Court has interfered with the impugned order of the Tribunal on an erroneous assumption that any direction for payment by the tenant to the landlord of any amount at any rate above the contractual rate of rent could not have been made.
No fault can be found with the approach adopted by the Tribunal. The High Court has interfered with the impugned order of the Tribunal on an erroneous assumption that any direction for payment by the tenant to the landlord of any amount at any rate above the contractual rate of rent could not have been made. We cannot countenance the view taken by the High Court. We may place on record that it has not been the case of the tenant-respondent before us, nor was it in the High Court, that the amount of Rs.15,000/- assessed by the Rent Control Tribunal was unreasonable or grossly on the higher side". 31.4. In Mohammad Ahmad, the Apex Court noticed that the learned Single Judge has also taken note of the aforesaid judgment and only thereafter, the rent was worked out as Rs.2,100/- per month for two shops, as against Rs.600/- per month. The learned Single Judge has applied his own yardstick in working out the rent, but only after the contentions of both parties were taken into account, and the said yardstick appears to be absolutely correct and the perfect method of working out the present market rental of the premises. Even though the report of the valuation was not taken into consideration as there was none, the assessment and judgment of the learned Single Judge cannot be disallowed, even though detailed reasons have not been assigned for enhancing the rate of rent because the ultimate conclusion arrived at by him does not suffer from any infirmity, illegality or perversity. Therefore, the Apex Court opined that the appeal from such an interim order of the learned Single Judge, being devoid of merit and substance, deserves to be dismissed. Accordingly, the Apex Court dismissed the appeal. 31.5. In Mohammad Ahmad [ (2011) 7 SCC 755 ] the Apex Court viewed that 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. Therefore, the Apex Court in paragraph 21 of the said decision laid down some guidelines and norms for such types of litigation, so as to minimise landlord-tenant litigation at all levels.
Therefore, the Apex Court in paragraph 21 of the said decision laid down some guidelines and norms for such types of litigation, so as to minimise landlord-tenant litigation at all levels. Those guidelines and norms are as follows; (i) The tenant must enhance the rent according to the terms of the agreement or at least by 10% after every 3 years and the 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 a 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, and electricity charges for the actual consumption of the tenanted premises and for the 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 or 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 the landlord shall not be entitled to bring any action for 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, the location, type of construction, accessibility with the main road, parking space facilities available therein, etc.
Care ought to be taken so that it does not end up being a bonanza for the landlord. (underline supplied) The Apex Court has made it clear that these are some of the illustrative guidelines and norms, but not exhaustive, which can be worked out between landlord and tenant so as to avoid unnecessary litigation in court. 32. In Subair and others v. C.P. Kunhami @ Kunjhimariyam and others [ 2015 (5) KHC 260 ] a Division Bench of this Court was dealing with a case in which the landlord filed a Rent Control Petition seeking eviction alleging bona fide need and arrears of rent. The tenants contended that the petition is not maintainable in view of the guidelines issued by the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ] and that, the bona fide need as alleged is not made out. The tenants brought to the notice of the court that the fair rent in respect of the premises was fixed as per the judgment of the Rent Control Appellate Authority on 27.07.2011, hence they sought for dismissal of the Rent Control Petition stating that it was not maintainable as it was instituted 15.10.2011, which is not from five years from the date of fixation of fair rent. The Rent Control Court dismissed the petition. In appeal, the Appellate Authority held that, though the judgment fixing the fair rent attained finality only on 27.07.2011 since the fair rent was fixed from the date of filing of the Rent Control Petition, i.e., 2002, the present petition for eviction is maintainable. Thus, the Rent Control Petition was allowed as a bona fide need was made out. Aggrieved, the tenants have filed the Rent Control Revision before this Court. 32.1. In Subair [ 2015 (5) KHC 260 ], before the Division Bench, the learned counsel for the petitioners-tenants contended, relying on the decision of the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ], more particularly the guidelines laid down by the Apex Court in the said decision, that once the fair rent is fixed, the landlord is not entitled to bring an action for eviction against the tenant at least for a period of five years.
Since the fair rent was fixed by the judgment rendered by the Rent Control Appellate Authority on 27.07.2011 in RCA No. 58 of 2010, the petition for eviction which was filed on 15.10.2011 is liable to be dismissed on that short ground, and was rightly dismissed by the Rent Control Court. The interpretation placed by the Appellate Authority on the guidelines framed by the Apex Court is not tenable and is liable to be set aside. Per contra, the learned counsel for the respondents-landlords contended that the Rent Control Appellate Authority has in the judgment delivered by it on 27.07.2011 in RCA No. 58 of 2010 fixed the fair rent, with effect from the date of the petition for fixation of fair rent, i.e., 15.07.2002. The period of five years stipulated by the Apex Court expired on 15.07.2007 and therefore, by no stretch of the imagination can it be said that the Rent Control Petition for eviction, which was filed on 15.10.2011, is within the period of five years after the fair rent was fixed. Relying on the decision in George [ 2013 (2) KHC 326 ] it was contended that an order fixing the fair rent is to be treated as operative from the date of filing of the application and therefore, no exception can be taken to the judgment of the Rent Control Appellate Authority fixing the fair rent with effect from the date of the petition for fixation of fair rent, i.e., 15.07.2002. As the bona fide need has been concurrently found in favour of the landlords and the tenants have failed to prove the ingredients of the first and the second provisos to Section 11(3) of the Act, an order of eviction ought to have followed and was rightly passed by the Rent Control Appellate Authority. 32.2. In Subair [ 2015 (5) KHC 260 ] the Division Bench found that, in view of the proposition laid down in George [ 2013 (2) KHC 326 ] an order fixing the fair rent is to be treated as operative from the date of filing of the petition for fixation of fair rent.
32.2. In Subair [ 2015 (5) KHC 260 ] the Division Bench found that, in view of the proposition laid down in George [ 2013 (2) KHC 326 ] an order fixing the fair rent is to be treated as operative from the date of filing of the petition for fixation of fair rent. The judgment delivered by the Rent Control Appellate Authority on 27.07.2011 in RCA No.58 of 2010 disclosed that OS No.128 of 2002 filed by the landlord, wherein he had prayed for fixation of fair rent, was dismissed by the Munsiff Court, Vatakara, by the decree and judgment dated 28.06.2003. The landlord filed an appeal before the Additional District Court, Vatakara as AS No.94 of 2003, which was renumbered as RCA No.58 of 2010, pursuant to the decision of the Division Bench in Edger Ferus [ 2004 (1) KLT 767 ]. The judgment in RCA No.58 of 2010 disclosed that the contract rent of Rs.350/-, which was fixed in the year 1976 and was refixed as Rs.525/- in the year 1996, was enhanced to Rs.1,575/- per month with effect from the date of the plaint in OS No.128 of 2002, i.e., 15.07.2002. The judgment in RCA No.58 of 2010 has attained finality. The Division Bench found that, in the light of the decision in George [ 2013 (2) KHC 326 ], no exception can be taken to the said judgment. In any case, as the judgment in RCA No.58 of 2010 has not been subjected to challenge and has attained finality, it governs the rights of the parties. Such being the situation, it cannot be contended that the Rent Control Petition for eviction, which was filed on 15.10.2011 is liable to be thrown out on the ground that it is one filed within five years from the date of fixation of the fair rent. Such an interpretation cannot be placed on paragraph 21(iii) of the decision of the Apex Court in Mohammad Ahmad. The Division Bench noticed that the appellants before the Apex Court in Mohammad Ahmad were the tenants of a commercial building. The landlord filed an application for eviction under the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 praying for release of two of the shop rooms in his favour. The tenants were at that point of time paying Rs.40/- and Rs.20/- respectively for the shops in their possession.
The landlord filed an application for eviction under the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 praying for release of two of the shop rooms in his favour. The tenants were at that point of time paying Rs.40/- and Rs.20/- respectively for the shops in their possession. The Prescribed Authority passed an order of eviction in respect of two shop rooms in the possession of the appellants. That order was upheld in appeal. In a writ petition filed before the High Court challenging the aforesaid orders, the learned Single Judge passed interim orders enhancing the rate of rent in respect of the shop room, initially to Rs.600/- per month, and later to Rs.2,100/- per month. Challenging that order, the tenants moved the Apex Court. While dismissing the appeal, the Apex Court in Mohammad Ahmad laid down the guidelines and norms to minimise the landlord-tenant litigation on the reasoning that majority of the cases are filed because the landlords do not get reasonable rent akin to market rent and that, for that reason on one ground or the other, litigation is initiated. The Division Bench noticed that all that is stipulated in the guidelines framed by the Apex Court in Mohammad Ahmad is that if the present and prevailing market rent assessed and fixed between the parties is paid by the tenant, then the landlord shall not be entitled to bring any action for eviction against such a tenant at least for a period of five years. The Apex Court has not held in the said decision that the period of five years will commence from the date of the order fixing the fair rent, either by the original authority or the Appellate Authority. The guidelines framed by the Apex Court in Mohammad Ahmad are only to the effect that the tenant who is paying the fair rent should enjoy immunity from being evicted for a period of five years. The fair rent in the instant case was fixed with effect from 15.07.2002. The period of five years computed in accordance with the decision of the Apex Court in Mohammad Ahmad, as rightly held by the Appellate Authority, expired on 15.07.2007.
The fair rent in the instant case was fixed with effect from 15.07.2002. The period of five years computed in accordance with the decision of the Apex Court in Mohammad Ahmad, as rightly held by the Appellate Authority, expired on 15.07.2007. Therefore, the Division Bench was not persuaded to hold that in view of the decision of the Apex Court in Mohammad Ahmad the petition for eviction is liable to be dismissed as one brought prematurely within the period of five years. The Division Bench held that there is no merit in the Rent Control Revision petition and accordingly dismissed the same. 33. In Prasanna Kumari [ 2019 (2) KHC 575 ] one of the questions that came up for consideration before the Division Bench of this Court was as to whether an agreement between the landlord and the tenant stipulating periodical enhancement of rent or the guidelines enumerated in the decision of the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ] would preclude the landlord from instituting a rent control petition under Section 5(1) of the Act seeking fixation of fair rent at a rate more than the specified rate of enhancement provided in the lease agreement. On the facts of the case on hand, the Division Bench noticed that, even in the original rent deed dated 08.12.2000, there was a provision for periodical enhancement of rent and the original rent at the rate of Rs.4.25/- per square feet was subsequently enhanced and fixed at Rs.12,493/-. Thereafter, the original lease agreement was renewed by a renewal agreement dated 03.04.2009. As per that agreement, the petitioner and the respondent agreed to enhance the rent at the rate of 25% on every five years, and the Rent Control Petition was filed on 14.11.2011. On a survey of various provisions under the Act, the Division Bench found that there is no provision prohibiting institution of a Rent Control Petition, where there is an agreement between the landlord and tenant for periodical enhancement of rent during the period of the lease deed. On the other hand, according to Section 11(9) of the Act, where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply to the Rent Control Court for eviction of the tenant before the expiry of such period.
On the other hand, according to Section 11(9) of the Act, where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply to the Rent Control Court for eviction of the tenant before the expiry of such period. The Legislature was so conscious to omit such a bar against institution of Rent Control Petition seeking fixation of fair rent even if there is an agreement between the landlord and the tenant fixing the rent with provision for periodical enhancement. The absence of such a statutory bar gives rise to an inference that the Legislature has consciously permitted the landlord to approach the Rent Control Court to get the fair rent determined, notwithstanding the stipulation regarding periodical enhancement in the lease agreement. Therefore, an agreement fixing the rent with periodical enhancement at a specified rate, between the landlord and tenant, will not preclude the landlord from instituting a rent control petition invoking Section 5(1) of the Act, for fixation of fair rent. 33.1. In Prasanna Kumari [ 2019 (2) KHC 575 ], the Division Bench found that even though in Mohammad Ahmad [ (2011) 7 SCC 755 ] the Apex Court has held that the tenant must enhance the rent according to the terms of the agreement or at least by 10% after every three years, the said enhancement does not preclude the landlord from invoking the statutory provision for fixing the fair rent at a rate higher than the rate of rent in the agreement or more than 10%. In the aforesaid decision, it is specifically stated that the guidelines are only illustrative and not exhaustive, to minimise litigation between the landlord and the tenant. It is not a bar against institution of Rent Control Petition seeking fixation of fair rent. Therefore, the Division Bench found that clause (i) in paragraph 21 of the decision in Mohammad Ahmad [ (2011) 7 SCC 755 ] will not preclude the landlord from seeking fixation of fair rent at a rate more than the specified rate at which periodical enhancement is stipulated in the agreement between the landlord and the tenant.
Therefore, the Division Bench found that clause (i) in paragraph 21 of the decision in Mohammad Ahmad [ (2011) 7 SCC 755 ] will not preclude the landlord from seeking fixation of fair rent at a rate more than the specified rate at which periodical enhancement is stipulated in the agreement between the landlord and the tenant. Coming to clause (v) in paragraph 21 of the said decision, the Division Bench found that as per the said clause, the landlord is precluded from bringing any action for the eviction of the tenant at least for a period of five years if the present and prevalent market rent assessed and fixed between the parties is paid by the tenant. There is no immunity in favour of the tenant from the landlord instituting a Rent Control Petition seeking fixation of fair rent, even if the landlord and the tenant had fixed the rent with periodical enhancement at a specified rate in the lease agreement or renewal agreement. In that view of the matter, the Division Bench held that the decision in Mohammad Ahmad [ (2011) 7 SCC 755 ] will not preclude the landlord from instituting a Rent Control Petition seeking fixation of fair rent at a rate more than the agreed rent or the rent enhanced periodically as stipulated in the lease deed. 34. As already noticed hereinbefore in Mohammad Ahmad [ (2011) 7 SCC 755 ] the Apex Court was dealing with a case in which the application was filed under Section 21(1)(a) of the U.P. Urban Building (Regulation of Letting Rent and Eviction) Act, 1972 against the tenants praying for release of any one pair out of two pairs of shop rooms. The Prescribed Authority allowed that application. The Appellate Authority modified that decree to certain extent. That was under challenge in a writ petition filed before the High of Judicature at Allahabad, in which the learned Single Judge by the order dated 14.09.2002 directed that the tenants will not be dispossessed from the shops, provided that, with effect from September 2005 onwards they will pay the landlords rent at the rate of Rs.600/- per month.
That was under challenge in a writ petition filed before the High of Judicature at Allahabad, in which the learned Single Judge by the order dated 14.09.2002 directed that the tenants will not be dispossessed from the shops, provided that, with effect from September 2005 onwards they will pay the landlords rent at the rate of Rs.600/- per month. On 13.02.2007 when that writ petition came up for consideration before another learned Judge, the learned counsel for the landlords submitted that the rent of the shops is too meagre looking to the present rent available for other similarly situated shops, so a prayer was made that it be increased reasonably according to market rate. On this offer being made, learned counsel appearing for the appellants submitted that the case for enhancement of rent may be considered by the court according to the condition, location and situation, etc. of the tenanted shops. In the light of the aforesaid offer having been made by the landlords and duly considered by the appellants, the learned Single Judge thought it fit to enhance the rate of rent from Rs.600/- per month for both the shops to Rs.2,100/- per month, payable from February 2007. 35. As already noticed hereinbefore, in Mohammad Ahmad [ (2011) 7 SCC 755 ], before the Apex Court, the first thrust of the arguments of learned counsel for the appellants was that the rent having been enhanced to Rs.600/- per month only on 14.09.2005, no case was made out for further enhancement from Rs.600/- to Rs.2,100/- per month, vide the impugned order dated 13.02.2007, within two years thereof. Further, the Apex Court has severely deprecated the practice of enhancement of rent in petitions filed under Article 226 or 227 of the Constitution of India, during the pendency of those petitions before the High Court, that too without any valuation report. To advance contention in this regard, several unreported judgments/orders of the Apex Court have been relied on. The Apex Court noticed that in these cases neither there was any offer made by the landlord nor any corresponding acceptance by the tenant, still the High Courts, in each of these cases enhanced the rates of rent unilaterally.
To advance contention in this regard, several unreported judgments/orders of the Apex Court have been relied on. The Apex Court noticed that in these cases neither there was any offer made by the landlord nor any corresponding acceptance by the tenant, still the High Courts, in each of these cases enhanced the rates of rent unilaterally. But in the case on hand, it is clearly reflected that the landlords made an offer to the appellants-tenants which they agreed, only thereafter the rent was enhanced from Rs.600/- per month to Rs.2,100/- per month, for both the shops. Thus, the ratio of the judgments/orders cited by learned counsel for appellants has no application to the facts of the case on hand. On the other hand, the learned counsel appearing for the landlords strenuously contended that the building known as Jaitpur House, with the passage of time, has come within the market area of Saharanpur and can therefore be called a building falling within the meaning of a commercial area. It was also contended that looking to various factors such as the nature of construction, its prime location in the city, being situated on the main highway, and thus having easy accessibility to it and the availability of all other amenities and facilities etc. even the rent fixed by learned Single Judge at the rate of Rs. 2,100/- per month for both the shops is on the lower side and too meagre. The total area under the occupation of the appellants is 240 sq.ft. With the rent fixed at Rs.2,100/-, the rate of rent comes to Rs.87.50 per sq.ft., which according to the learned counsel is too low, keeping in mind the present trend and the prevalent market rate of rent. 36. In Mohammad Ahmad [ (2011) 7 SCC 755 ], the Apex Court, after looking into the matter from all angles, opined that the rent fixed by the learned Single Judge for the two shops having a total area of 240 sq.ft. to Rs.2,100/- per month is not only reasonable but would be just and proper. Any enhancement in rent will not ipso facto be deemed to be unreasonable and exorbitant unless the party aggrieved is able to give cogent reasons for the same. In this context, the Apex Court referred to the decision in Atma Ram Properties (P) Ltd. [ (2005) 1 SCC 705 ].
Any enhancement in rent will not ipso facto be deemed to be unreasonable and exorbitant unless the party aggrieved is able to give cogent reasons for the same. In this context, the Apex Court referred to the decision in Atma Ram Properties (P) Ltd. [ (2005) 1 SCC 705 ]. The Apex Court noticed that the learned Single Judge has also taken note of the aforesaid judgment and only thereafter, the rent worked out as Rs.2,100/- per month for two shops, as against Rs.600/- per month. The learned Single Judge has applied his own yardstick in working out the rent, but only after the contentions of both parties were taken into account, and the said yardstick appears to be absolutely correct and perfect method of working out the present market rental of the premises. Even though the report of the valuation was not taken into consideration as there was none, the assessment and judgment of the learned Single Judge cannot be disallowed, even though detailed reasons have not been assigned for enhancing the rate of rent because the ultimate conclusion arrived at by him does not suffer from any infirmity, illegality or perversity. Therefore, the Apex Court opined that the appeal from such an interim order of the learned Single Judge, being devoid of merit and substance, deserves to be dismissed. Accordingly, the Apex Court dismissed the appeal. 37. In that context, the Apex Court viewed in Mohammad Ahmad [ (2011) 7 SCC 755 ] that the majority of the cases are filed because landlords do not get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. Therefore, the Apex Court laid down some guidelines and norms for such types of litigation, so as to minimise landlord-tenant litigation at all levels. The Apex Court has made it clear that the guidelines in clauses (i) to (vii) are some of the illustrative guidelines and norms, but not exhaustive, which can be worked out between landlord and tenant so as to avoid unnecessary litigations in court. 38. Section 11 of the Kerala Buildings (Lease and Rent Control) Act, deals with eviction of a tenants.
38. Section 11 of the Kerala Buildings (Lease and Rent Control) Act, deals with eviction of a tenants. As per sub-section (1) of Section 11 of the Act, notwithstanding anything to the contrary contained in any other law or contract a tenant shall not be evicted, whether in execution of a decree or otherwise, except in accordance with the provisions of the Act. Section 11(2)(b) of the Act deals with eviction on the ground of arrears of rent, Section 11(3) deals with eviction on the ground of bona fide need, Section 11(4)(i) deals with eviction on the ground of subletting, Section 11(4)(ii) deals with eviction on the ground of the tenant reducing the value or utility of the building, Section 11(4)(iii) deals with eviction on the ground of the tenant acquiring another building, Section 11(4)(iv) deals with eviction on the ground of reconstruction, Section 11(4)(v) deals with eviction on the ground of the tenant ceases to occupy the building for the specified period and Section 11(8) deals with eviction on the requirement of the landlord for additional accommodation. 39. The statutory right of the landlord under Section 11 of the Act to get the tenant evicted from the tenanted premises on any one of the grounds under Section 11 of the Act, by initiating eviction proceedings before the Rent Control Court, is not taken away by the guidelines and norms laid down by the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ], which were laid down by the Apex Court to avoid unnecessary litigations in court, i.e., litigation initiated before the Rent Control Court on one ground or the other, because the landlords do not get reasonable rent akin to market rent. 39.1. Clause (i) in paragraph 21 of the decision in Mohammad Ahmad [ (2011) 7 SCC 755 ] will not preclude the landlord from seeking fixation of fair rent, invoking Section 5(1) of the Act, at a rate more than the specified rate at which periodical enhancement is stipulated in the agreement between the landlord and the tenant since the Legislature has consciously permitted the landlord to approach the Rent Control Court to get the fair rent determined, notwithstanding the stipulation regarding periodical enhancement in the lease agreement. 39.2.
39.2. The second question referred to the Full Bench on the guidelines and norms laid down by the Apex Court in Mohammad Ahmad [ (2011) 7 SCC 755 ] is answered as above. Registry to list this matter before the Bench as per roster.