Patna High Court
Secretary, Balika Siksha Bhawan, ... vs State Of Bihar And Ors. on 25 April, 1989
Equivalent citations: AIR1990PAT126, AIR 1990 PATNA 126
Author: B.P. Singh
Bench: B.P. Singh
ORDER B.P. Singh, J.
1. In the instant writ application, the petitioners have prayed for quashing of the orders Annexures 1 to 3 passed by the authorities under the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1982 fixing fair rent of the premises in question. Annexure 1 is the order passed by the Sub-divisional Officer, Sadar, Ranchi, dated 24-1-1985 whereby he accepted the report submitted by the Executive Magistrate and has fixed the monthly rental at Rs. 5500/-. The order of the Sub-divisional Officer has been upheld by the Deputy Commissioner, Ranchi by his order Annexure 2 dated 5-11-1985. Annexure 3 is the order dated 14th July, 1987 passed by the Commissioner, South Chotanagpur Division, whereby she dismissed the revision preferred by the petitioners.
2. A few facts not in dispute may be stated thus :--
Petitioner No. 2 is a school which is also a society registered under the Societies Registration Act. Petitioner No. 1 is its Secretary. Respondents Nos. 5 and 6 are the landlords of the premises in question. The premises is situate on the Circular Road in the city of Ranchi and the School runs in the premises in question. The building is an old building said to have been constructed in or about the year 1904. The petitioners have been the tenants in the aforesaid premises since the year 1934. At the time when the application for fixation of fair rent was filed by the respondents/landlords, a monthly rental of Rs. 200/- was payable by way of rent for the aforesaid premises.
3. Learned counsel for the petitioners has submitted two main submissions for consideration in this writ application. He firstly submitted that under the proviso to Sub-section (c) of Section 8 of the Act, the maximum increase permissible in such a proceeding is 25% of the average monthly rent payable by the tenant over a period of 12 months preceding the first day of December, 1980. The submission is that on an application filed by the landlord for enhancement of rent, the authorities concerned may enhance the rent only to the extent of Rs. 25% over and above the rent paid in respect of the premises in question during the period of 12 months preceding the 1st day of December, 1980. In the instant case, the rent payable was Rs. 200/- per month. It was, therefore, submitted that the increase could not be more than 25% of the aforesaid rent namely not more than Rs. 50/- per month in terms of the aforesaid proviso. A grievance was made that the rent was enhanced from Rs. 200/- to Rs. 5500/- per month which was wholly unreasonable and contrary to the provisions of the Act.
The second submission urged before me was that the authorities under the act mechanically placed reliance upon the report of the Executive Magistrate who had enquired into the matter and without considering whether the aforesaid report had been submitted having regard to the factors to be taken into account under the Act and the Rules the authorities have based their orders solely on the aforesaid enquiry report. According to the petitioners, a mere perusal of the report of the Executive Magistrate concerned would show that he has not taken into account the relevant considerations in recommending the enhancement of rent for the premises in question. The aforesaid report of the Executive Magistrate is Annexure B to the counter affidavit filed on behalf of respondent No. 6.
4. So far as first submission is concerned, it is necessary to notice the relevant provisions of the Act. Section 5 of the Act provides as follows:--
"5. Determination of fair rent of buildings in occupation of tenants-- (1) When, on application by the landlord or by the tenant in possession of a building or otherwise, the Controller has reason to believe that the rent of that building is low or excessive, he shall hold a summary enquiry and record a finding.
(2) If, on a consideration of all the circumstances of the case, including any amount paid by the tenant by way of premium or any other like sum in addition to the rent, the Controller is satisfied that the rent of the building is low or excessive he shall determine the fair rent for such building."
Section 8 of the Act provides for the matters to be considered in determining the fair rent which reads as follows :--
"8. Matters to be considered in determining fair rent -- (1) (a) For the purposes of the Act the fair rent of a building shall be determined as for a tenancy from month to month.
(b) The fair rent of a building shall be determined in accordance with the rules framed for this purpose.
(c) In determining the fair rent of any other building under Section 5 or 6, the Controller shall have due regard to the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances at any time during the twelve months preceding the first day of December, 1980, and to the increased cost of repairs, and in the case a building which has been constructed after that date, also to any general increase in the cost of site and building construction:
Provided that where the Controller is satisfied, on an application made to him by the landlord under Section 5, that the rent of a building referred to in this clause is low, the Controller shall, in determining the fair rent of such building to be payable by a tenant fix the rent of the building at a figure which shall not be less than the average monthly rent actually paid for the same or simitar accommodation by any tenant over the period of twelve months preceding the first day of December, 1980, increased by not more than 25 per cent of the average monthly rent so received by the landlord during the aforesaid period in addition to the enhancement, if any, on account of the increased cost of repairs or the general increase in the cost of sites and building construction, where such enhancement is admissible under the foregoing provision of this clause.
Explanation: (1) For the purpose of this clause where rent was charged by the landlord or actually paid by the tenant for the same building over the aforesaid period on any other than a monthly basis, the average monthly rent for such building shall be calculated at thirty times the average rent per day of the period in respect of which the rent was charged or actually paid.
(2) When the fair rent of a building has been determined or redetermined, any sum in excess or short of such fair rent paid, in respect of occupation for any period after such date shall in case of excess, be refunded to the person by whom it was paid or at the option of such person be otherwise adjusted and, in case of shortage be realised by the landlord as arrears of rent from the tenant:
Provided that if a building is let out subsequent to the determination or determination of a fair rent, on a rent which is less than the fair rent, so determined or re-determined, the landlord shall not be entitled at any time to realise the difference between that fair rent and the rent at which the tenant was admitted to occupation."
Rules have been framed under the Act known as the Bihar Buildings (Lease, Rent and Eviction) Control Rules, 1983. Rule 3 thereof is relevant for the present purpose. The relevant part of the Rule provides as follows :--
"3. (i) The Controller may determine the fair rent of a building either on the application by the landlord or by the tenant in possession of the building or on his own motion as also on the application of the landlord or prospective tenant.
(ii) In determining the fair rent the Controller shall take into account the following factors:
(a) The prevailing rates of rent in the locality for the same or similar accommoda-
tion in similar circumstances at any time during the twelve months preceding the date of his order;
(b) The increased cost of repairs required to be made in the building;
(c) The amenities, general or special provided in the building;
(d) The compound or the open land attached to the building;
(e) The type of construction and the location of the building, and the nature of tenancy, i.e. whether it is for residential purpose or for business purpose, etc.
(f) The municipal tax or corporation tax of the building;
(g) Any lawful agreement entered into by the landlord and the tenant.
(iii) The Controller in determining the fair rent shall follow the provisions of the Act and apply the rules in accordance with them and in case of any doubt or conflict the provisions of the Act shall invariably prevail in determining the fair rent.
(iv) The Controller shall fix fair rent after due enquiry and after duly giving notice to the parties concerned and after providing them the opportunity of being heard. '
(v) to (vi) xx xx xx xx xx xx"
5. It will be noticed that the proviso to Sub-section (c) of Section 8 deals with the case of an application made to the Controller by the landlord under Section 5 of the Act complaining that the rent of the premises was low. The proviso prescribes what the Controller shall do in considering such a case of a landlord and it provides that in determining the fair rent of such building, the rent fixed shall not be less than the average monthly rent actually paid for the same or similar accommodation by any tenant over the period of twelve months preceding the first day of December, 1980, increased by not more than 25% of the average monthly rent so received by the landlord during the aforesaid period in addition to the enhancement on account of increased cost of repairs etc. Learned counsel for the respondents urged that the proviso could not be given the meaning which the petitioners want it to be given. The proviso only prescribes what the Controller should do while determining the fair rent. It only prescribes that the rent fixed by the Controller shall not be less than the average monthly rent paid over the period of 12 months preceding the 1st day of December, 1980 increased by not more than 25%. The language of the proviso supports this construction. Because, it in terms, mentions (i) in determining the fair rent of such building.....fix the rent of the building at a figure which shall not be less than the average monthly rent actually paid for the same or similar accommodation by any tenant over the period of 12 months preceding the 1st day of December, 1980 increased by not more than 25%....."
Learned counsel for the respondent submitted that shorn of unnecessary words, the proviso reads as under :--
"When the Controller is satisfied........ that the rent........is low, he shall .........fix the rent.........at a figure which shall not be less than the average monthly rent actually paid.......over the period of twelve months preceding the first day of December, 1980, increased by not more than 25 per cent ................ in addition to the enhancement if any on account of the increased cost of......."
6. The submission of the respondents must be accepted. The proviso may not be very happily worded, but, its intendment is clear. It provides that in an application made by the landlord for fixation of fair rent on the ground that the rent being paid by the tenant is low, the Controller shall fix rent at a figure which shall not be less than the average of 12 months rent payable before 1-12-1980 increase by 25%. The proviso does not provide anything more than the minimum. It does not provide for a maximum otherwise it could have been simply stated that rent shall not be less than 12 months average rent paid immediately before 1-12-1980 and not more than 25% over and above such rent. I have, therefore, no doubt that the proviso to Sub-section (c) to Section 8 only lays down the minimum that the Controller must determine by way of monthly rent where an application is made to him by the landlord under Section 5 of the Act complaining that the rent being paid to him by the tenant is low. The Act is of the year 1982, the rule? were framed in the year 1983 and the relevant date for reckoning the average monthly rental being the 1st December, 1980, the additional sum of 25% represents what the Legislature thought was the probable increase in the rent during that period. I, therefore, hold that there is nothing in the aforesaid proviso to hold that the Controller is not authorised to fix the fair rent which is more than 25% of the average monthly rent paid during the period of 12 months preceding the 1st of December, 1980. In my view it is open to the Controller to fix any higher amount by way of fair rent having regard to the provisions of Section 8 of the Act and Rule 3 of the Rules.
7. The second submission of the petitioners must, however, prevail. As observed earlier, the Controller has to fix fair rent having regard to the matters which have been enumerated in Section 8 of the Act and Rule 3 of the Rules. Section 8 refers to the rules framed for the purpose. Rule 3 provides that the Controller while determining the fair rent shall take into account the factors enumerated therein. Some of the factors to be taken into account are as follows : --
(a) the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances at any time during the twelve months preceding the date of his order;
(b) the amenities, general or special provided in the building;
(d) the type of construction and the location of the building; etc. In the instant case, the Executive Magistrate who was directed to make an enquiry and to submit a report, has submitted a report in which he has carefully worked out the total area of the premises in question. He has fixed three rates separately for the ground floor, the first floor, and the asbestos shade on the ground floor. He has then considered the rent payable in respect of other premises in the locality. He has considered the case of Apsara Hotel and has taken into account the room charges payable in the aforesaid Hotel on daily basis. He has then considered the case of the premises occupied by Bharat Earth Movers. The rent being paid was at the rate of Rs. 2- per sq. feet and the aforesaid house is situate adjacent to the premises in question. He assessed that taking the year 1980 as the basis, the fair rent should be Rs. 1.75 per sq. feet. He has then considered the premises known as Ashirbad Bhawan in which the office of the General Manufacturing Company Ltd. is situate. The aforesaid company pays rent @ Rs. 1.75 per sq. feet. On the basis of the rent payable in respect of these three premises, the Executive Magistrate recommended that the fair rent of the premises in question should be @ Rs. 1.50 per sq. feet for the ground floor, Re. 1/- per sq. feet for the first floor and Re. 1/- per sq. feet for the asbestos shade.
8. From the report of the Executive Magistrate it is quite apparent that all that he has taken into account is the rent payable by the tenants of those premises. He has not at all considered whether those premises are comparable with the premises in question so that they could be considered to be similar accommodation in similar circumstances. He has also not considered the amenities that have been provided in those premises as compared to the amenities available in the premises in question. In fact, he has not taken into account any of the factors enumerated in Rule 3 of the Rules except the rate of rent payable by the tenants of those premises. In my view such an approach is vitiated in law. The law enjoins upon the Controller to consider not merely the rent payable in the locality but also to have regard to the other factors mentioned in Rule 3 of the Rules. Only after considering all those circumstances, or such of them as are relevant, in a particular case, can the Controller fix the fair rent of the premises. Since the Controller as well as the appellate and revisional authority have acted on the basis of such report which does not meet the requirements of law, their orders are also vitiated on the ground of the said error. In the circumstance, those orders must be quashed and the matter be remitted for fresh determination in accordance with law.
9. In the result, this application is allowed and Annexures 1, 2 and 3 are quashed. The matter is remitted to the Controller under the Act/ Subdivisional Officer in charge for hold ing a proper enquiry either by himself or through any other Magistrate authorised by him and to pass an appropriate order having regard to the provisions of Section 8 of the Act and Rule 3 of the Rules. The report and the order sheet may be passed must disclose the con sideration of various factors which are rele vant under Section 8 read with Rule 3 of the Rules. There shall be no order as to costs.