Madras High Court
Kethmul vs Hussaini Begum on 29 January, 2002
Equivalent citations: (2002)1MLJ568
Author: Prabha Sridevan
Bench: Prabha Sridevan
ORDER
1. The Rent Control Appellate Authority held that a second application for fixing the fair rent is maintainable and therefore, this revision.
2. The revision petitioner is the tenant. In 1983, the respondent/the landlord fifed HRCOP No. 1167 of 1982 under Section 4 of the Act. Fair rent was fixed at Rs.221 per month. On appeal, it was quantified at Rs.211 per month. After the death of the petitioner's father, the petitioner and the respondent entered into a tenancy agreement. Notwithstanding the fact that the fair rent had been fixed in the above proceedings, a sum of Rs.500 per month was paid as rent and received by the respondent. In March, 1995, the respondent filed RCOP No.575 of 1995 for fixing the fair rent. The Learned Rent Controller while dismissing the petition on the ground that a second application for fixation of fair rent was not maintainable, proceeded to quantify the fair rent on the basis of the materials produced before him. The fair rent thus fixed was Rs.1311 per month. The respondent preferred an appeal. The Appellate Authority relying on Malpe Vishwanath Acharya v. State of Maharashtra, came to the conclusion that a fresh petition for fixing the fair rent was maintainable, since both the parties had chosen to ignore the fair rent fixed in the earlier proceedings and since rent was paid at a rate fixed by consensus, allowed the appeal and confirmed the fair rent fixed by the Rent Controller.
3. Mr. K. Chandramouli, learned senior counsel appearing for the petitioner submitted that a second petition for fixing the fair rent was not maintainable in law. He further submitted that the tenant cannot waive the benefit given to him under the Act. He would also submit that Courts cannot legislate even if there, is a lacuna in the Act and it is for the legislature to amend the provisions of an Act, if necessary and the law should be interpreted as it is and not be substituted by judicial opinion. It was further submitted that in proceedings under the Rent Control Act the legality of the Act cannot be questioned. He would further submit that even assuming without admitting the petition was maintainable, the Tribunals erred in including the entire 100 sq. feet, which was the vacant site for the purpose of calculating the land value while only 50% of the vacant site can be included. The following three decisions were relied on to show the extent of Court's power while interpreting a statute. In all the three cases the question was how to harmonise the time limit prescribed for filing an application under Order 21, Rule 89 of C.P.C, with Article 127, Limitation Act.
(a) Thangammal v. K. Dhanalakshmi, ; (b) P.K. Unni v. Nirmala Industries, ;(c) Dadi Jagannadham v. Jammulu Ramulu, 2001 (4) CTC 314 : AIR 2001 SC 2000 Certain passages in the above decision were referred to show that Courts cannot assume that the Legislature had made a mistake in this respect or that it made an omission and that even if there were some omission they are matters exclusively within the domain of legislation by Parliament and the Court cannot presume deficiency and supply the omission and that the learned Senior counsel would submit that even if the Rent Control Law is harsh on the landlords by barring a second application for fixation of fair rent the Courts cannot presume to set it right. Courts must proceed on the basis that legislature did not make a mistake, and must adopt as far as possible a construction which will carry out the obvious intention of the Legislature.
4. He would also submit that, Malpe Viswanath Acharya's case, arose out of proceedings under the Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947) which pegged down the rent to the rates prevailing on 1st September 1940 and therefore, it can have no application to the Tamil Nadu Act. Further, the learned senior counsel pointed out that even in that case the Supreme Court did not strike down the Act.
5. Other decisions were relied on by the learned senior counsel.
(a) Sha Dbanraj Ghunilal v. C Vedachalam Chetti, 1986 L.W. 672, and Mattapudi Janardana Rao v. Yanduri Venkata Subba Rao, 1952 (I) MLJ 472 where it was held that an application for fixation of fair rent for a second time was not maintainable.
(b) Murlidhar Agarwal v. State of Uttar Pradesh, was relied on to show that the benefits of the Act cannot be waived by the tenant.
(c) Ravaland Co. v. K.G. Ramachandran, was relied on to show that the fair rent is fixed only for the building and not for a particular tenant or a landlord and to deflect the argument that since the earlier proceedings were filed against the revision petitioner's father it was possible to maintain the second petition against the son, who is the revision petitioner.
(d) K.S. Venkataraman and Co. (P) Ltd., v. State of Madras, was relied on to show that a statutory authority cannot decide the validity of that very statute of which he is a creature.
(e) In Nalinakhya Bysack v. Shyam Sunder Haldar and Ors. it was held that no Court is competent to proceed on the assumption that the Legislature had made a mistake. The Court must proceed on the footing that the Legislature intended what it has said. Even if there is some defect in the phraseology used by the Legislature the Court cannot step in to remedy the defect.
It was also pointed out that while in Section 6 of the Tamil Nadu Payment of Fair Rent Act, 1956 (Act XXIV of 1956) it is provided that the fair rent fixed shall continue in force for five years no such provision is found in the Rent Control Act.
Therefore looked at from any angle, the revision must be allowed.
6. Mr. Rathinadurai, learned counsel for the respondent on the other hand would submit that the Appellate Authority's order did not need any interference and that no legislation can be unjust to one, giving a disproportionate advantage to the other, and that is why in Malpe Viswanath Acharya's case, the Supreme Court held that periodical revision of rent is necessary. It was pointed out that in the evidence of the landlord, he has stated that now the entire area was utilized for the business, which was not challenged in cross-examination. Therefore, the area for which fair rent is fixed in the present application is different from and larger than the area for which fair rent was fixed in the earlier proceedings. It was further submitted that when the parties themselves have ignored the fair rent fixed in the earlier proceedings, the Authorities need not take that into account. Therefore, it was open to the respondent to apply again for fixing the fair rent.
7. Reliance was placed on the decision reported in Mohammed Anis v. Union of India, 1993 (2) I.T.(S.C.)305 wherein the Supreme Court held that the Courts shall exercise their plenary and overriding power under Article 142 of the Constitution of India to do complete justice. According to the learned counsel, such powers should be exercised in this case where the petitioner is enjoying a property in a prime locality by paying a very meagre rent. The decision in Khem Chand v. State of Rajasthan, 1999 (2) AIR CJ 438 was also relied on. In this case the Division Bench of the Rajasthan High Court held that Section 6(2) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, which "froze" the rent at the rate settled as on l.1.65 was ultra vires and unconstitutional. It was submitted that since Malpe Viswanath's case, clearly lays down that freezing of rents is unfair, this must be followed and the Appellate Authority had rightly done that. So there was no justification to interfere in revision.
8. Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act (the Act in short) deals with fixation of fair rent and the principles to be followed by the Rent Controller for fixing the fair rent. Section 5 of the Act provides that when the fair rent of the building has been fixed or refixed under the Act no further increase in such fair rent shall be permissible except under certain conditions. Section 6 of the Act provides for increase over rent in certain cases when the taxes and cesses payable by the landlord are increased. Section 7 of the Act provides that the landlords shall not claim or receive any rent in excess of fair rent or agreed rent.
9. In Raval and Co. v. K.G. Ramachandran, , it was held that, "A close reading of the Act shows that the fair rent is fixed for the building and it is payable by whoever is the tenant whether a contractual tenant or statutory tenant. What is fixed is not the fair rent payable by the tenant or to the landlord who applies for fixation of fair rent but fair rent for the building, something like an incident of the tenure regarding the building."
And indeed the section also reads, "when the fair rent of a building has been fixed or refixed."
(Empbasis supplied) Therefore, the fact that the earlier proceedings were filed against the father of the revision petitioner and the subsequent proceedings against the son is not relevant so far as the question of maintainability is concerned.
10. Next, the premises that is subject matter of the present petition is the same as the property which was the subject matter of the earlier proceedings, as seen from the pleadings Para No.6 which reads thus:
"In respect of the petition premises the petitioner abovenamed filed RCOP No.1 167 of 1982 on the file of this Hon'ble Court for fixing fair rent."
It is seen from the earlier order and the present one, that the petition premises in both are the same. So this objection is also rejected.
11. The Appellate Authority had relied on Malpe Viswanath Acharya's case, for arriving at the conclusion that a second application is maintainable. In that case the appellants before the Supreme Court were landlords, who challenged the provisions of the Bombay Rent Act, which restricted the rights of the landlords to claim increased rent. The Supreme Court held that a legislation, which was justified at the time of enactment, may become arbitrary, discriminatory, and unreasonable with passage of time and that there was considerable judicial authority in support of this. They referred to State of Madhya Pradesh v. Bhopal Sugar Industries, which deals with the question whether geographical classification due to historical reasons would be valid and held that a purely temporary provision, which because of compelling forces justified differential treatment without a rational basis, cannot be permitted to assume permanency, if the initial expediency disappear. They also referred to Rattan Arya v. State of Tamil Nadu, where notice was taken on the enormous increase in the rent and to Synthetics and Chemicals Ltd., v. State of Uttar Pradesh, where it was observed that "restrictions valid under one circumstance may become invalid in changed circumstances."
12. The following paragraphs are important.
"28. In so far as social legislation, like the Rent Control Act is concerned, the law must strike a balance between rival interests and it should try to be just to all. The law ought not to be unjust to one and give a disproportionate benefit or protection to another section of the society. When there is shortage of accommodation it is desirable, may, necessary that some protection should be given to the tenants in order to ensure that they are not exploited. At the same time such a law has to be revised periodically so as to ensure that a disproportionately larger benefit than the one, which was intended is not given to the tenants. It is not as if the government docs not take remedial measures to try and off set the effects of inflation. In order to provide fair wage to the salaried employees the government provides for payment of dearness and other allowances from time to time. Surprisingly this principle is lost sight of while providing for increase in the standard rent-the increases made even in 1987 are not adequate, fair or just and the provisions continue to be arbitrary in today's context.
29. When enacting socially progressive legislation the need is greater to approach the problem from a holistic perspective and not to have a narrow or short-sighted parochial approach. Giving a greater than due emphasis to a vocal section of society results not merely in the miscarriage of justice but in the abdication of responsibility of the legislative authority."
The learned Supreme Court Judge also commented on the extra-legal methods adopted by landlords to achieve their ends.
13. The respondent's counsel submitted that it was common knowledge that in Bombay landlords resort to the under-world for help for evicting tenants who either refuse to vacate or to pay rent and that though the situation is not so serious in Tamil Nadu it would not be long before the effect of extra judicial backlash is felt in this State also.
14. In Raval and Co. v. K.G. Ramachandran, 1974 SC 818 the Supreme Court noted that the Act did not proceed on the basis that all tenants belong to the weaker section of the community and need protection and that all landlords belong to the better of classes.
15. In Khem Chand v. State of Rajasthan, 1999 (2) AIRCJ 438 the learned Judges of the Rajasthan High Court took note of Malpe Viswanath Acharya's case, and Issac Ninan v. State of Kerala, (DB) 1996 AIHCC 357. The following paragraph from the Kerala High Court was referred to:
"As held by the Supreme Court in Ganpat Ram v. Gayatri Devi, the Rent Control Act is a beneficial legislation, beneficial to both the landlord and the tenant. It protects the tenant against unreasonable eviction and exhorbitant rent, It also ensures certain limited rights to the landlord to recover possession on stated contingencies. Legislation does not confer any vested right on the tenants. As held by the Supreme Court in Inder Mohan Lal v. Ramesh Khanna, there is no presumption in all cases that the tenants are weaker sections. By lapse of time the tenants (at least many of them) doing business in commercial buildings taken on rent are far more affluent financially than the owners of the building in which they do business. Though the rent control legislation is stated to be a beneficial one, it must be reasonable just and fair."
16. The Division Bench in the end struck down Section 6(2) of the Rajasthan Act as ultra vires and unconstitutional.
17. It is important to bear in mind that in Malpe Vishwanath Acharya's case, the Supreme Court after observing that the freezing of the rent to one particular period was unreasonable, did not strike down the relevant provision because the existing Act was about to lapse on 31.3.1998 and a new Act was in the anvil.
18. The Act bars the second application once fair rent has been fixed under this Act so what is crucial is only that that fair rent was fixed under the Act. The fact that subsequently the parties agreed to pay or receive a higher rent does not have a bearing on the maintainability. In fact, Section 7 specifically bars the landlord from claiming or receiving in excess of fair rent. Therefore, the Appellate Authority's conclusion that the parties agreed to waive and therefore, the second application is maintainable is not correct.
19. The revision arises out of proceedings under the Act and the authorities will have to operate within the four corners of the Act. If the Act imposes a restriction on the powers of the authority in a particular manner the authority cannot go beyond that. The Supreme Court had not struck down Section 5 of the Act in Malpe Viswanath's case. What was declared was the necessity to strike a balance between the two interests.
20. In K. Sahavdev v. Suresh Bir, 1995 Supp. (3) SCC 668 an interesting question arose out of the A.P. Rent Control Act. Earlier in 1987 (1) ALT 216, Section 4 of the said act was struck down. Subsequently the Supreme Court in , which arose from the Punjab High Court upheld the validity of a similar provision. The learned Single Judge of the A.P. High Court ignored 1987 (1) ALT 216 and followed the arose out of this judgment of the Andhra Pradesh High Court. The Supreme Court held that the proper course for the learned Single Judge was to refer the matter to a larger Bench, since the declaration given by the learned Judge in 1987 1 ALT 216 cannot be set at naught by a decision of the Supreme Court rendered in respect of another Act.
21. In 1987 1 ALT 216, the learned Judge of the Andhra High Court held that it was highly unrealistic to cling to the old rates of rent in view of the current economic standards and spiraling prices. The learned Judge traced the history of the Rent Control Act and how the war in 1941 gave rise to an increased demand for accommodation and consequent exploitation of tenants by landlords. Thus the Madras House Rent Control Order, 1941 was passed. It was made applicable to the Hill Stations only and then extended to the entire Madras Province. The learned Judge thereafter referred to the Madras Godown Rent Control Act, 1942 and the Madras Non-residential Buildings Rent Control Order, 1945. In 1946, the Madras Buildings (Lease and Rent) Control Act, 1946 was introduced. The Rent Control Acts in the various States were aimed at protecting the tenant from unreasonable evictions and providing the manner in which tenants can be evicted legally while making provisions for payment of rent pending proceedings and for fixation of fair rent. The learned Judge observed that "The object of the Act is to interdict unreasonable eviction of tenants and though the slant towards tenants is clearly discernible from the provisions of the Act the corresponding obligations of tenants with reference to punctual payment of rent, embargo on subletting without express consent of landlord and keeping the demised premises in a fit condition and attempting to defy the title of the landlord are provided."
Section 4 of the A.P. Rent Control Act was struck down as unconstitutional.
22. It is relevant to note that this decision arose only from proceedings filed under the Rent Control Act. No doubt the A.P. High Court envisages the fixation of fair rent in consonance with rents prevailing in the locality during the period of 12 months prior to 1.4.1944. The Tamil Nadu Act only bars a second application when the fair rent is fixed or refixed. It cannot be denied that the value of rupee is fallen down and with inflation the value of real estate has gone up and as observed by the Supreme Court in the case cited above not all tenants are poor nor all landlords affluent. There may be cases where the rental income is the only source of income for the landlord whereas the tenant may be a successful businessman occupying various rental accommodations. The rival interests of the landlord and the tenant must be balanced.
23. The Act was brought into regulate the letting of buildings, to control rents and to prevent unreasonable eviction. The question now raised is whether control of rents means freezing of rents. The principle of equality as laid down by the Supreme Court is that it is a dynamic concept and while striking down Section 32(b) of the A.P. Rent Control Act as violative of Article 14, it was held as:
"The long period that has elapsed after the passage of the Act itself serves as a crucial factor in deciding the question whether the impugned law has become discriminatory or not because the ground on which the classification of buildings into two categories is made is not a historical or geographical one but is an economic one. Exemption was granted by way of an incentive to encourage building activity and in the circumstances such exemption cannot be allowed to last for ever."
24. Therefore, the fact that Section 5 has been in the statute since 1973 is not an argument in support of its constitutionality. In referred in Malpe Viswanath Acharya's case, the Supreme Court quoted this legal maxim "Cessante Ratione Legis Cessat Ipsa Lex" which means "Reason is the soul of law, and when the reason of any particular law cease, so does the law itself." If the reason for enacting Section 5 of the Act(or any other legal provision for that matter) continues to be current then the section shall remain unchanged but if the reason has disappeared either wholly or to some extent or if the reason results in palpable injustice then the law shall change. Therefore, the fact that Section 5 has been in force for so long cannot decide its validity. What will decide this issue is the reason for this provision.
25. But in these proceedings the constitutionality of Section 5 cannot be considered and definitely not solely on the basis of Malpe Viswanath Acharya's case, . As the learned Judges of the Supreme Court themselves have held in 1995 Supp. 3 SCC 668, the constitutionality of the provisions of one Act cannot be decided on the basis of the decision given perhaps with regard to a similar though not identical provision in another Act. The Bombay Act which came up for consideration in Malpe Viswanath Acharya's case, pegged down the rates prevailing on 1.9.1940. The Andhra Act which was struck down in 1987 (I) ALT 216, froze the rents at a rate prior to 5.4.1944. But the Tamil Nadu Act is different. The scope of the provisions regarding fixing of fair rent under Section 4,5,6 and 7 of the Act has already been touched upon. The Appellate Authority ought not to have entertained the second petition for fixing of fair rent when the Act does not permit the same. Therefore, the impugned order must be set aside. This order does not ofcourse preclude the right of the respondent to challenge the constitutional validity of the provisions of the Act. The civil revision petition is therefore, allowed. No costs. The connected C.M.Ps. are closed.