Madras High Court
M. Radhakrishna Rao vs A.B. Ahmed Basha And Anr. on 8 April, 1992
Equivalent citations: (1992)2MLJ615
ORDER Srinivasan, J.
1. These matters arise out of two petitions filed by the landlord, who is the petitioner in C.R.P. Nos. 1608 and 1625 of 1985, for fixing of fair rent under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 as amended by Act XXIII of 1973. One of the petitions, viz., R.C.O.P. No. 3115 of 1982 relates to the two flats in the ground floor of Door No. 631, Thiruvottiyur High Road, Tondiarpet, Madras, occupied by A.B. Ahmed Basha, who is the respondent in C.R.P. No. 1608 of 1985 and petitioner in C.R,P. No. 478 and 479 of 1988. The other petition, viz., R.C.O.P. No. 3116 of 1982 relates to two flats in the first floor of the same building occupied by Manoharlal Sablok, respondent in C.R.P. No. 1625 of 1985. C.R.P. No. 1608 of 1985, 478 of 1988 and 479 of 1988 form one group as they pertain to one tenant viz., Ahmed Basha, occupying two flats in the ground floor. C.R.P. No. 1625 of 1985 and C.M.P. No. 14705 of 199l go together and they will be dealt with as a separate group.
2. Ahmed Basha was paying a rent of Rs. 265 per mensem under the contract of tenancy, In the petition for fixation of fair rent, the landlord claimed Rs. 1,931 per mensem. The Rent Controller fixed Rs. 635 per mensem as fair rent by order dated 26.3.1983. There were two appeals, one by the landlord and another by the tenant, numbered as R.C.A. Nos. 1213 of 1983 and 56 of 1984 respectively. They were disposed of by order dated 19.11.1984 by the appellate authority, who fixed the fair rent at Rs. 890 per mensem.
3. Manoharlal Sablok was paying a rent of Rs. 235 per mensem under the contract of tenancy and the landlord claimed Rs. 1,488 per mensem as fair rent. The Rent Controller fixed Rs. 556 per mensem. There were two appeals, R.C.A. Nos. 1214 of 1983 and 55 of 1984 by the landlord and tenant respectively. The Appellate Authority fixed Rs. 820 as the fair rent.
4. These four revision petitions were filed, two by the landlord and two by the ground floor tenant, Ahmed Basha. The first floor tenant has not filed any revision petition, though he has now filed a petition for admission of certain documents as additional evidence in order to challenge one of the findings given by the Courts below against him. Though all the revision petitions had been presented in this Court in April, 1985, the revision petitions filed by the landlord were numbered and taken on file in April, 1985 itself, while the revision petitions filed by the tenant were not numbered till February, 1988. They were taken on file only on 15.2.1988. But, even before that, the revision petitions filed by the landlord came up for hearing before Sivasubramaniam, J. The learned Judge found it impossible to decide the question of fixation of fair rent solely on the basis of P.W.D. rates in view of the peculiar facts of the case. Both counsel conceded before him that the matter had to be decided afresh by the appellate authority or the Rent Controller as additional evidence might be required. Both counsels agreed that a finding could be called for from the appellate authority regarding the cost of construction. Accordingly, the learned Judge passed an order on 11.9.1987 calling for findings from the appellate authority. The relevant passage in his order reads thus:
...Both the learned Counsels agree that a finding may be called for from the appellate authority regarding the cost of construction of the petition building after comparing the nature of the building for which P.W.D. has prescribed the rates and specifications available for such building with the P.W.D. and the type of construction in so far as the petition-building is concerned. Therefore, the appellate authority is directed to consider the question of cost of construction of the petition building afresh taking note of the rates prescribed by P.W.D., the nature and type of construction relating to which P.W.D. rates have been prescribed, the nature and type of the petition building with, special reference to the thickness of the walls, height of the walls, windows etc., after comparing the nature of the building involved in the specifications of the P.W.D. and the petition building, the appellate authority can decide as to the quantum of fair rent which can be fixed for the petition-building. It is open to the parties to adduce evidence, oral and documentary, if necessary. The appellate authority is direcled to finish the enquiry and submit a report to this Court within a' month from the date of receipt of a copy of this order, if it is found necessary, it is open to the appellate authority to call for further particulars from the Public Works Department to enable him to fix the fair rent.
5. Thereafter, the appellate authority recorded evidence and heard arguments.He has submitted his findings, according to which, the fair rent for the ground floor portion occupied by Ahmed Basha is Rs. 1,140 per mensem and the fair rent for the first floor portion occupied by Manoharlal Sablok is Rs. 985 per mensem. The landlord examined a Junior Engineer of P.W.D. as his witness P.W.2. The tenants examined a private Consulting Engineer as R. W.3. The report of P.W.2 is marked as Ex.P-10 and the report of R.W.3 is marked as Ex.R-8. After the submission of the findings to this Court, the matters were posted before me and counsel on both sides argued at length.
6. Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act provides for fixation of fair rent. Under Sub-section (2), "the fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building". In this case, there is no dispute that the building is a residential one. Under Sub-section (4) thereof, the total cost of the building shall consist of (a) market value of the site in which the building is constructed, as on the date of application for fixation of fair rent, (b) the cost of construction of the building as on the date of application for fixation of fair rent, and (c) the cost of provision of any one or more of the amenities specified in Schedule 1, as on the date of application for fixation of fair rent. There are two provisos to the Sub-section. According to the first proviso, while calculating the market value of the site in which the building is constructed, the Controller shall take into account only that portion of the site on which the building is constructed and of a portion up to fifty per cent thereof of the vacant land, if any, appurtenant to such building. The excess portion of the vacant land shall be treated as amenity. Under the second proviso, the cost of provision of amenities spccified in Schedule 1 shall not exceed, in the case of any residential building, fifteen per cent of the cost of the site in which the building is constructed and the cost of construction of the building as determined under the section. Sub-section (5)(a) provides that the cost of construction of the building including cost of internal water-supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned, and in appropriate cases, the Controller may allow or disallow an amount not exceeding 30 per cent of the cost of construction, having regard to the nature of construction of the building. Sub-section (5)(b) provides for deduction of depreciation from the cost of construction at the rates specified in Schedule 2 to the Act. Schedule 1 to the Act contains a list of amenities referred to in Sub-section (4). Schedule 2 to the Act prescribes the rates of depreciation per annum for different types ofbuildings.
7. The section has been the subject of judicial interpretation in this Court. In A.C. Charities v. Ms. S. Aushadhalaya (1968) 2 M.L.J. 406, Ramaprasada Rao, J. considered the meaning of the word ''site' with reference to a building having more than one floor. He held that in the case of such buildings, the principle ought to be one of apportionment in accordance with the number of storeys. In so far as the ground floor is concerned, he interpreted the word 'site' as it is ordinarily understood as that on which the ground floor stands. With reference to the first floor, second floor or the nth floors, he held that it would mean that portion of the building on which the respective flat or storey was built upon or imposed. But, the learned Judge proceeded to observe as follows:
Having thus far considered as the meaning of the word 'site', the question still remains as to how best to implement the express words of the statute provided for in Section 4(2)(b)(ii) or Section 4(3)(b)(ii) of the Act. The Act makes it obligatory that to arrive at the total cost, the market value of that portion of the site on which the residential or non-residential building is constructed, has to be taken into consideration. Therefore, if a building consists of more than one storey, how is the market value of that portion of the site in each case to be evaluated?
In Namasivaya Chettiar v. Appuswamy Iyer C.R.P. No. 486 of 1964, Ananlanarayanan, J (as he then was) observed as follows:
But since, for the purpose of. the Act, the actual plinth area upon which the construct ion concerned stands, has to be taken into account and a strict interpretation of this will- mean that the plinth area for the first floor, as distinguished from the ground floor, must be assessed as 'nil' value, it appears to me that some such expediency as that actually adopted in the case is inevitable.
The expediency referred to by the learned Judge is the formula adopted by the Court below which is to the following effect; the fair rent is sought to be fixed with reference to the first floor of the building, and for purpose of computation of such fair rent, the court below has adopted a formula of taking the plinth area of the first floor as half the actual area upon which the construction was erected. In Vasantha Watch Co. v. Saraswathi Time Equipment C.R.P. No. 583 of 1964, the same rule was adopted by the learned Judge. In this case also, the following observations are apposite:
I am unable to hold that the courts below were in error in taking the area of the floor for computation purposes as half of the plinth area; otherwise, and if the letter of the rules has to be adhered to, there would be no floor area at all for the simple reason that this is the first floor of the building, and not the ground floor." "I respectfully agree with the principles adopted by the learned Judge. I am also of the view that in the case of buildings having more than one floor the principle ought to be one of apportionment in accordance with the number of storeys. If there are two storeys, the market value of the land for the first floor will be half. If there are more than two storeys, it will be proportionately distributed in accordance with the number of storeys in the building.
8. In Rainbow Electric Supply Corporation v. Chenchuramiah (1972) 2 M.L.J. 446, it was held that the site value in the case of a building having more than one floor must be proportionately distributed in accordance with the number of storeys in the building. Reliance was placed on the judgment of Ramaprasada Rao J. in A.C.Charities' case (1968) 2 M.L.J. 406.
9. In Bombay Tyres International Ltd. v. Express Newspapers (P) Ltd. (1987) 2 M.L.J. 191, Chan-durkar, C.J. held that in the case of fixation of fair rent judicial notice must be taken of the fact that cost of construction and cost of materials which have to be used for construction of a building including the fittings for water supply, sanitary fittings as well as for making electrical installations have always been escalating and are considerably high and there has to be a realistic approach in the matter of estimating the cost of construction and the cost of making amenities available. The same learned Judge in I.A.Emberumanar v. Raghava 1987 T.L.N.J. 307, held that if the landlord failed to give positive evidence of the cost of providing amenities, the Rent Controller would be justified in ignoring the cost of such amenities. The learned Judge observed that if material documents such as plans, measurements and notes prepared by the Engineers were not produced before Court, the Rent Controller was entitled to draw an adverse inference, unless an acceptable explanation was given for non-production of the same, or unless proper acceptable evidence was adduced with regard to matters which would have been proved by the production of such documents.
10. In Savani Transports (P) Ltd, v. R. Jamal Mohammed (1989) 1 L.W. 172, Nainar Sundaram, J. held that the determination of cost of construction shall be done with due regard to the rates adopted for the purpose of estimation by the Public Works Department and when the statute prescribes the manner in which it had to be done, the Court was bound to do it in that manner. It was held in that case that merely because the fair rent to be determined in accordance with the principles contained in the statute would exceed the estimation of fair rent done by the landlord in his petition, the Authorities should not shirk their statutory obligations to fix the fair rent as per the said principles. It was also held that proportionate enhancement had to be made taking note of the passage of time.
11. There was a conflict of opinions with regard to "the extent of the site" to be taken into account for calculating the market value of the site in which the building is constructed for the purpose of the Section. The matter was referred to a Full Bench in Lodha v. Ranganathan (1989)1 M.L.J. 213. It was held that an extent upto 50% of the site on which the building was constructed had to be served out of the vacant land if any, appurtenant to such building and the market value of that 50% must be added on to the market value of that portion of the site on which the building was constructed and the rest of the portion of the vacant land had to be treated as amenity. With reference to the question of apportionment, where the building is occupied by different tenants floor-wise, the Full Bench answered it by saying that the scope of terms and conditions of letting had to be found out in each case. It was observed thus: "...The real test would be how one. party intended to give and how the other party intended to take the demise and the subject matter of the demise. If there is a demise of any land appurtenant to building, certainly the test, as countenanced by us, while answering the first question, will have to be applied. If there is no demise of any land, appurtenant to building, then there is no question of applying the test."
12. In Raitan Private Ltd. v. L. Krishnamoorthy C.R.P. Nos. 708, 709 and 2698 to 2791 of 1985, V. Ramaswami, J. took into account the basic amenities while fixing the cost of construction of the building and refused to make a further provision additionally for such amenities. On the facts, he found that the P.W.D. rate was Rs. 79 per sq.ft. and taking into account the basic amenities, he fixed the cost of construction at the rate of Rs. 100 per sq.ft. When it was contended that certain percentage should be added after the total cost of construction was arrived at for the cost of amenities like water supply, electricity and drainage, he rejected the said contention.
13. Bearing in mind the provisions of the Act and the principles settled in the above rulings, I shall consider the facts in these cases. The contentions raised by both the tenants are the same excepting that the tenant of the first floor viz., Manoharlai Sablok raises an additional contention that he is in occupation of only one portion in the first floor as a tenant and he is not a tenant with reference to another portion. It is to substantiate that contention, he filed C.M.P. No. 14705 of 1991 for admission of certain documents as additional evidence. I will first advert to the question whether Mahoharlal Sablok is a tenant with reference to two flats in the first floor or only one flat. The authorities have concurrently negatived this contention and upheld the claim of the landlord. In paragraph 2 of the counter statement in R.C.O.P. No. 3116 of 1982, the plea is raised in the following terms:
The respondent submits that the application is filed in respect of the two portions when the respondent is in occupation of only one portion. The other portion is occupied by his daughter and nor by the respondent. Therefore the respondent is a tenant only in respect of one portion in the property for which a monthly rent of Rs. 135 is now being paid. Hence the present petition filed by the petitioner for fixing of fair rent for two portions is not at all maintainable in law and it is liable to be dismissed in this short ground alone.
The tenant gave evidence as R.W.2. He admitted having filed the suit W.P. No. 4281 of 1981 along with Ahmed Basha and another against the vendor of the present landlord for injunction restraining him from cutting off electricity supply to the ground floor and first floor. He admitted that he had not mentioned in the said plaint that he was a tenant of only one portion and his daughter was a tenant of another portion. There was also a petition by the tenant under Section 9 of the Act against his previous landlord and the present landlord for deposit of rent viz., H.R.C.4054 of 1981. Admittedly, the tenant averred in that petition that he was a tenant of two portions in the first floor. The previous landlord filed H.R.C. No. 1499 of 1981 for eviction of the tenant from the two portions in the first floor specifically stating that he was a tenant of both the portions. The present landlord was impleaded in that petition as second petitioner later after his purchase. The petition for eviction was dismissed by order dated 9.2.1982 on the ground that there was no wilful default in payment of rent. The order of dismissal is marked as Ex.P-6 in the present proceedings. The contention of the tenant that he was a tenant of only one portion of the first floor and the petition for eviction was not maintainable, was rejected. The Controller found that he was a tenant of both the petitions relying upon his statements in the earlier suit O.S. No. 4281 of 1980 and the petition H.R.C. No. 4054 of 1981. There is no explanation by the tenant of the admissions made by him in the two earlier proceedings. The Rent Controller held that the plea was clearly an after thought and rejected the contention of the tenant. On appeal that was affirmed by the appellate authority. In the appeal before the appellate authority, the finding of the Rent Controller was not canvassed at all. In paragraph 11 of the order of the appellate authority it is stated thus:
The said finding is not canvassed in this appeal and as it has become final.
There is no revision petition by Manoharlai Sablok in this Court. Hence, it is not open to him to raise the question in these revision petitions. The application for filing documents as additional evidence is, therefore, not maintainable at all. Even assuming that it is open to him to canvass the same, there is no explanation at all by him as to why he did not produce these documents either before the Rent Controller or before the appellate authority. There is no explanation also as to why he foiled to canvass the question before the appellate authority. A vague averment is made in the affidavit that the documents were not readily available before him when the matter was being heard by the Rent Controller as they had been mislaid. It is added that "at that time he was facing untold domestic hardship." No details are furnished and even at present, the so called domestic hardship remains untold in the sense that the tenant has not chosen to explain what it is.
14. Learned Counsel for the tenant relied on the judgment of the Supreme Court in K. Venkataramiah v. Seetharama Reddy . It was held in that case that the appellate Court has power to allow additional evidence not only if it requires such evidence to enable it pronounce judgment but also for any other substantial cause. The Apex Court was only laying down the principles to be borne in mind under Order 41, Rule 27 of the Code of Civil Procedure. On the facts of this case, it has not been made out by the tenant that additional evidence should be allowed to be adduced. Learned Counsel also cited Basant Singh v. Janki Singh , and Nagindas v. Balparram , for the proposition that admissions made by a party can be explained and the party can show them to be not true. When the tenant has not even chosen to, challenge the finding before the appellate authority or filed a revision petition in this Court, questioning the correctness of the orders of the courts below on that aspect of the matter, there is no question of his seeking to explain the admissions made by him earlier. The matter is no longer in issue and the rulings of the Supreme Court are of no avail to him in this case. In the circumstances, I have no hesitation whatever to reject the application filed by the tenant for admission of documents as additional evidence. GM.P. No. 14705 of 1991 is dismissed.
15. I. Type of building: Schedule II to the Act, which prescribes rates of depreciation, classifies buildings into four. The first type relates to buildings built in lime mortar and in which teak has been used throughout. It is in evidence that the building is constructed with cement mortar and teak wood had been used. The case of the tenants is that teak wood has not been used and country wood alone has been used. R.W.3 has in the chief-examination deposed to that effect. But, in the cross-examination he has categorically stated that teak wood has been used and he has tested the wood by making an opening. It is contended by learned Counsel for the tenants that there is a wrong recording of the deposition and there was no admission on the part of R.W.3 that teak wood has been used. R.W.3 is an educated man. He is a qualified Civil Engineer and he has 38 years' experience, according to his report, in the construction field. He has signed the deposition recorded by the court. If there was any mistake in there cording he ought to have pointed it out to the court and got the deposition corrected. That not having been done, it is not open to counsel to raise a plea in the revisional Court that there was wrong recording of the deposition. Counsel should have gone through the depositions before arguing the ma tter in the lower appellate court and he could have easily-pointed out the mistake if there was any to the authority who recorded the evidence. On the other hand, the appellate authority in his report has placed reliance on the said deposition of R.W.3 and held that the building is type 1.
16. II. Age of the building: There is no dispute as to the age of the building, either before the appellate authority or before me. It has been fixed as 21 years.
17. III. Depreciation: As the building is type 1, the rate of depreciation is 1% under Schedule II and the formula prescribed in Schedule II should be applied.
18. IV. Cost of construction inclusive of basic amenities: After this Court called for findings, the landlord has examined a Junior Engineer of P.W.D. as P.W.3 and marked his report as Ex.P-10. The tenants have examined a private consulting engineer as R.W.3 and marked his report as Ex.R-8. The appellate authority has found that the rates fixed by P.W.D.. are Rs. 57 per sq.ft. for ground floor, Rs. 52.50 per sq.ft. for first floor terraced portions and Rs. 37.50 per sq.ft. for A.C. sheet portions, though wrongly mentioned as Rs. 42.50 persq.ft.in another place. The Authority has fixed the cost of construction at Rs. 80, Rs. 70 and Rs. 50 per sq.ft. respectively for ground floor, first floor terraced portion and first floor A.C. sheet portion. The Authority has observed that it has taken into account the height and thickness of the walls and windows in the petition mentioned building. Excepting the thickness of the wall, there is no difference between a building taken by the P.W.D. for fixing the rates for construction and the petition building. P.W.3 deposes that normally the load bearing wall in a model building will be of 9" thickness. In fact, he has added that it may vary from 9 inches to 1 -1 1/2. The petition building is having 1 - 3% thick walls. The height of the walls is the same as in a P.W.D. building i.e. 10. No speciality in windows or any other part of the structure has been brought out in evidence. In the absence of specific evidence by the landlord as to the cost of materials used for the building the P.W.D. rates based on control prices of cement, steel etc., should be adopted. There is no basis for accepting the contention of counsel for the landlord that cement and steel were purchased in open market and the rates prevailing in open market should have been adopted. It is in evidence that there was control for cement and steel from 1961 to 1990. Hence, there is no warrant for assuming that the building was constructed with cement and steel purchased at higher rates in open market. The landlord ought to have examined his vendor to prove the cost of construction but he has failed to do so. There is also no evidence as to the cost of internal water supply, sanitary and electrical installations. Learned Counsel for the landlord submits that the building is situated about 100 feet" away from the main road and the length of electric wires, drainage pipes and water pipes should be borne in mind. The landlord has not let in any positive evidence regarding the same. In the circumstances, I apply the method adopted by V. Ramaswami, J. in C.R.P. Nos. 708, 709 and 2698 to 2701 of 1985 (referred to earlier) and fix the consolidated rates of Rs. 80, Rs. 70 and Rs. 50 per sq.ft. for ground floor, 1st floor terraced portion and 1st floor A.C. Sheet portion respectively inclusive of cost of basic amenities. Hence, there cannot be a separate or additional allowance of 10% for basic amenities as has been done by the appellate authority. Reliance is placed by the landlord on Ex.P-9, a notice issued by one of the tenants on 7.8.1984 that the buildings on the land were worth Rs. 4,00,000. The averment in the notice cannot be torn out of context and treated as proof of the cost of construction. It has been rightly ignored by the authorities below.
19. V. Land value: The landlord has claimed at the rate of Rs. 1,00,000 per ground. On the other hand, the tenants contend that it should be worked out at Rs. 15,000 per ground. The landlord relied on Ex.P-5, a sale deed relating to another property situated at a distance of half a furlong away from the petition premises. The Rent Controller relied on Ex.R-1, the sale deed under which the landlord purchased the petition property on 1.7.1981 from its previous owner. The total consideration is found to be Rs. 2,50,000. The subject matter of conveyance comprises a total area of 4 grounds and 1,862 sq.ft. of land and as per the document the building area is 1,655 sq.ft. Taking into account the value of the building at the rate provided by R.W. 1 in Ex.R-2, the Rent Controller fixed the valueof the land at Rs. 25,000 per ground. On appeal, the appellate authority increased it to Rs. 50,000 per ground relying on a sentence in the deposition of R.W. 1 that the ascertained the value of the land in the area to be Rs. 60,000 per ground. In the present report containing the findings the appellate authority has stated that the value of the land fixed at Rs. 60,000 was not disputed before him in the course of arguments. This Court called for findings with reference to the cost of construction, having regard to the nature and type of construction and the P.W.D. rates. With regard to the value of the land, this Court did not direct the appellate authority to consider the question, though one of the directions given is to decide the quantum of fair rent. That will not, however, prevent the parties agitating the question of value of the land before me. In fact, counsel on both sides argued the question. According to learned Counsel for the landlord, the value should be fixed on the basis of Ex.P-5, dated 1.4.1982. He submits that the petitions for fair rent were filed on 7.4.1982 and the said document ought not to have been rejected by the Courts below. On the other hand, it is argued by learned Counsel for the tenants that Ex.P-5 relates to land situated far away from the petition premises and when there is a document proving the value of the petition premises itself, no reliance can be placed on other documents. It is also argued that the expression used in the section is "market value of the site in which the building is constructed". According to learned Counsel, if direct evidence is available to prove the market value of the said site, no resort can be had to documents pertaining to other sites and drawing an inference there from. No doubt, there is considerable force in the contention of learned Counsel for the tenants. But judicial notice has to be taken of the fact that prices have been increasing at galloping rates since 1980. The petitions for fixation of fair rent were filed one year after the purchase of the property by the landlord. Even if the value of the land at the time of his purchase should be taken to be Rs. 25,000 per ground, there is nothing wrong in holding that it was Rs. 60,000 per ground on the date of applications. Moreover, the evidence of R.W. 1 is very clear that he made enquiries and ascertained the value to be Rs. 60,000 per ground. Hence, I do not find any justification to interfere with that finding.
20. VI. Market value of the site in which the building is constructed: As per the ruling of the Full Bench in Lodha v. Senganathan (1989)1 M.L.J. 213, for calculating the market value of the site in which the building is constructed, the plinth area of the building one half thereof has to be taken into account. There is no difficulty in applying that formula, if it is a case of one building and one tenant. Complications arise when there is more than one storey in the building and more than one tenant in each storey, as in the present case, In fact, with regard to the second question referred to the Full Bench, as to the method of apportionment, the Full Bench held that the matter should be decided with reference to the terms and conditions of the demise in each case. It was observed that to test prescribed by them should be applied to the facts of each case. I am of the view that the market value of the site on which the building is constructed has to be ascertained in the first instance on the basis of the section and the proviso as interpreted by the Full Bench. Then it has to be apportioned among the tenants on the basis of the number of portions of tenements into which the building is divided Section 2(2) of the Act defines a 'building' as a building or hut or part of a building or hut let or to be let. separately. In the case of dividing a building into several portions and letting them out to different tenants, each portion has to be taken as a 'building' as defined by the Act. For the purposes of Section 4 of the Act 'building' is that portion which is occupied by the tenant in question. One tenant cannot be mulcted with the liability for market value of the site on which the building is constructed taken as a whole. Necessarily, the market value of the site in which the building is constructed has to be distributed and apportioned among the tenants. If it is taken floorwise, that will lead to an artificiality, in the case of there being more tenants in each floor. If it is taken on the basis of the plinth area of each of the portions, that will also lead to an artificiality in the case of more storeys than one. In both cases, undue advantage will be gained by the landlord. He cannot be entitled to charge each tenant occupying only a small portion of the building with fair rent calculated on the basis of the market value of the plinth area of the entire building + one half thereof. In my opinion, the most equitable way of construing the section and applying the formula evolved by the Full Bench is to distribute or apportion the value of the site occupied by the building as a whole one half thereof equally among the tenements.
21. In the present case, it is not in dispute that each floor consists of three flats. In the petitions for fixation of fair rent, the landlord described the premises occupied by the tenants as two flats in ground floor and two flats in first floor respectively. It is also not in dispute that the third flat in each floor is under the control of the landlord and it is also being let out to tenants by him. Thus, there are six flats in the building. The area of the site on which the building is actually constructed is roughly 2,300 sq.ft. This fact is culled out from the plan filed by the landlord and marked as Ex. P-7 and the plan attached to the decree in S.ANo.453 of 1983., marked as Ex.P-8. One half thereof is 1,150 sq.ft. making a total of 3,450 sq.ft. as the area of 'the site in which the building is constructed'. The market value of the said extent of 3,450 sq.ft. is Rs. 86,250 at the rate, of Rs. 60,000 per ground. This has to be apportioned and distributed among the six flats. The tenant in the ground floor is occupying two flats and the tenant in the first floor is occupying two flats. Hence, 1/3rd of the above value (2/6th) should be taken into account for calculating the market value of the site on which the building of each of them is constructed. It is shown in Ex.P-7 that the total area of the land is 5,000 sq.ft. Deducting the area of the site in which the building is constructed as worked out above, the balance is 1,550 sq.ft. That has to be treated as amenity under Schedule I. Hence, it is held thai: the value of the site in which the building for each tenant is constructed is Rs. 28,750. The finding under this heading by the Authorities below is erroneous. The authorities, who decided the matter earlier, did not have the advantage of the judgment of the Full Bench. They calculated the ares of the site in which the building is constructed in a peculiar manner which is wholly unacceptable. Unfortunately, the appellate authority who lias now returned a finding as directed by this Court has simply adopted the basis found in the earlier orders. He has not applied the test prescribed by the Full Bench and calculated the market value of the site in which the building is constructed.
22. VI1. Schedule I amenity: The appellate authority has awarded 5% on the footing that there is an over-head tank, electric motor and pump set and vacant space. They will fall under items 10,11 and 15. In so far as items 10 and 11 are concerned, it is in evidence that the well has been closed and no water is lifted to the overhead tank. Hence the landlord cannot claim any allowance for the value of the two items. As regards item 15,I have found the excess extent of the vacant land to be 1,550 sq.ft. That has to be apportioned and distributed among the six flats. Each tenant occupying two flats in the ground floor and first floor respectively will be liable for 1/3rd of the said extent. That comes to 517 sq.ft. as rounded off.
23. The contention of learned Counsel for the landlord is that the Appellant Authority is in error in fixing the value of the amenities under Schedule 1 on a percentage basis. It is rightly pointed out by him that the section requires the cost of provision of any one or more of the amenities specified in Schedule 1 as on the date of application for fixing of fair rent to be ascertained and the proviso fixes only a ceiling of 15% on the cost of site + cost of construction as determined under the section. Hence the proper method will be to work out the cost of the provisions of such of the Schedule 1 amenities as are available to the tenant and if the cost is equal to or exceeds 15% of the cost of site and cost of construction, the maximum amount that can be taken into account for calculation of the fair rent is thesaid 15%. If it is less than the said 15%, then the actual cost should be taken into account. In the present case, the only Schedule I amenity that is available to the tenants is the excess vacant land referred to in Sub-section (4), the extent thereof being 517 sq.ft. for each of the tenants herein. The value of the said extent has to be calculated at the rate of Rs. 60,000 per ground, as I have already fixed the market value of the land. Thus, the valueof 517 sq.ft. will be Rs. 12,925 with respect to each tenant. If this amount exceeds 15% of the cost of site + cost of construction with respect to each of the tenants, what is to be taken in to account is only the said 15%. The cost of site + cost of construction in the present case will be as follows:
Ground floor tenant:
Cost of site in which the building is constructed : Rs. 28,750
Cost of construction Rs. 79,457.55 Rounded off to : Rs. 79,458
_________________
Total Rs. 1,08,208
Rs. 16,231.20
15% thereof As the value of Schedule I amenity
as worked out earlier is less than 15% of cost
of site + cost of construction, the actual value
should be taken into account viz. Rs. 12,925
First floor tenant:
Cost of site : Rs. 28,750
Cost of construction : Rs. 62,895.87
Rounded off to : Rs. 62,896
_________________
Total : Rs. 91,645
Rs. 13,746.90
15% thereof :
Again, the actual cost of Schedule I amenity
is less than 15%. Hence, the actual value
should be taken into account viz. : Rs. 12,925
24. In the result, the fair rent for the ground floor tenant is worked out as follows.
A. Cost of Construction:
(i) Plinth area : 1239 sq.ft.
(ii) Rate per sq.ft. Rs. 80 cost Rs. 99,120.00
Less
Depreciation at the rate of 1% per annum : Rs. 19,662.45
for 21 years
Final value of the building : Rs. 79,457.55
Rounded off to : Rs. 79,458
5. Cost of the land : Rs. 28,750
_________________
Total Rs. 1,08,208
C. Cost of Schedule amenities Rs. 12,925
Total Rs. 1,21,133
As it is a residential building annual rent : Rs. 10,901.97
at 9% of Rs. 1,21,133
Monthly rent: (rounded off) : Rs. 908.50
_________________
Rs. 909.00
25. The fair rent for the first floor tenant is worked out as follows:
A. Cost of construction:
(i) Plinth area : 1048 sq.ft. of terraced portion
cost at the rate of Rs. 70 per sq.ft. Rs. 73,360
(ii) 102 sq.ft. of A.C. Sheet roof portion:
Cost at the rate of Rs. 50 per sq.ft. Rs. 5,100
_________________
Rs. 78,460.00
Less _________________
Depreciation at the rate of 1% per annum for : Rs. 15,564.13
21 years
_________________
Final value of the building : Rs. 62,895.87
B. Cost of land : Rs. 28,750.00
_________________
Total : Rs. 91,645.87
C. Cost of Schedule I amenities : Rs. 12,925.00
_________________
Total : Rs. 1,04,570.87
As it is a residential building,
annual rent at 9% of Rs. 1,04,570.87 : Rs. 9,411.38
Monthly Rent : Rs. 784.28
Rounded off to : Rs. 784
_________________
26. The fair rent with reference to each tenant is fixed as above and the revision petitions are ordered accordingly. CM.P. No. 14705 of 1991 is dismissed. The parties will bear their respective costs.