N.K.Rajalakshmi vs Mrs.Kanchana V.Fai on 27 October, 2015

[Cites 2, Cited by 1]

Kerala High Court

N.K.Rajalakshmi vs Mrs.Kanchana V.Fai on 27 October, 2015

The aforesaid Rent Control Revisions are filed by landlords and tenants respectively challenging the same judgment whereby the courts below concurrently fixed the fair rent allowing 30% increase to the fair rent so fixed in every 5 years. The landlords filed the Rent Control Petition under Sec.5 of the Kerala Buildings (Lease and Rent Control) Act contending that the prevailing rent of the petition schedule building is very low when comparing with the prevailing rent of the similarly situated buildings in the same locality. According to them, the petition schedule building was leased out to the respondents in 1976 for the purpose of doing business in books on a monthly rent of 1 per sq ft and the total extent of the area is 4000 sq ft. Thus the rent payable was 4000 per month. After the commencement of lease arrangement in the year 1976, no revision of rent was effected so far. The petition schedule building is situated in Cochin city by the side of M.G Road and M.G Road is the commercial hub of Cochin city. Many popular business centers, banking institutions, hospitals 2 RCR Nos 90 and 95 of 2016 especially renowned jewelleries and textile shops in the State are situated very near to the petition schedule building. The prevailing rent in that area is more than 100 per sq ft. However, even if the petition schedule building was constructed in the year 1976, at any viewpoint, the building would fetch rent at the rate of 90 per sq ft. Hence the landlords filed the Rent Control Petition with a prayer to fix the fair rent at the rate of 90 per sq ft.

2. The respondents opposed the claim for enhancement of rent contending that the petition schedule building is an old one and the amount claimed is exorbitant and disproportionate with the rent of similar buildings in the locality. The respondents have not seriously challenged the commercial importance of the locality. It is also contended that there is no parking facility to the building. So also, there was no periodical maintenance to the building.

3. On the aforesaid rival pleas, both parties adduced evidence which consists of oral testimony of PW1 to PW4 and RW1 and documentary evidence Exts A1 to A9 and C1 to C3. After considering the aforesaid evidence the Rent Control Court fixed the fair rent granting 30% increase to the fair rent so fixed in every five years. In the appeal, the appellate authority 3 RCR Nos 90 and 95 of 2016 also confirmed the fair rent fixed by the Rent Control Court and dismissed the appeal. Thus, the legality and propriety of fixation of fair rent at the rate of 30% increase to the fair rent so fixed in every five years are challenged in these revision petitions.

4. Heard the respective counsel appearing for the landlords and tenants in both the Rent Control Revisions.

5. The sum and substance of the arguments advanced by the learned counsel for the petitioner in RCR 90/2016 is that the courts below have not considered Exts A7, A8 and A9 in their correct perspective. In other words, though the buildings covered under Exts A7, A8 and A9 are similarly situated buildings in the same locality, very near to the petition schedule building and comparable with the petition schedule building, the courts below have fixed the fair rent at a rate far below the prevailing rent of Exts A7, A8 and A9. On the other hand, the learned counsel for the revision petitioner in RCR 95/2016 advanced arguments contending that the dilapidated condition of the building was not considered in its correct perspective and the courts below ought to have noticed that Exts A7, A8 and A9 were rental arrangement created with respect to buildings which were not comparable with petition 4 RCR Nos 90 and 95 of 2016 schedule building. According to the learned counsel, the buildings covered in Exts A7, A8 and A9 are new buildings having regular maintenance. Though, Exts A7 to A9 are not comparable with the petition schedule building the courts below have fixed fair rent taking Exts A7 to A9 also into consideration.

6. In view of the rival submissions at the bar, the question to be considered is whether there is any illegality or impropriety in the findings whereby the courts below concurrently determined the fair rent granting 30% increase to the fair rent so fixed in every five years. It is not disputed that the petition schedule building is situated adjacent to M.G Road and the said road is a commercially important street in the Cochin city. It is clear from Ext C1 commission report also that the petition schedule building is situated in the commercial hub of Cochin city. The respondents have not challenged the commercial importance of the locality or the importance of the locational importance of M.G.Road. Therefore the courts below are justified in finding that the petition schedule building is situated in a commercially important locality within which so many banks, hospitals, textile shops, jewelleries etc are situated.

5 RCR Nos 90 and 95 of 2016

7. It is not disputed that the tenancy has commenced in the year 1976 with a rent at the rate of 1 per sq ft and the total area is 4000 sq ft and the rent was not revised so far since the commencement of tenancy. In other words, the existing rent is 4000 per month which was fixed in the year 1976 only. Indisputably Cochin city has commercially grown up after 1976. Therefore the courts below are justified in finding that the landlords are entitled to get enhanced fair rent.

8. The next point is whether the courts below are justified in fixing the fair rent at 30% increase to the fair rent so fixed in every five years. In order to prove the prevailing rent in the locality the petitioners examined PW1 to PW4 and produced Exts A7 to A9. Exts A7 to A9 are certified copies of lease deeds of similar buildings situated in the same locality. The contention of the respondents is that those buildings are new buildings, but the petition schedule building is a dilapidated one. According to the landlords, the petition schedule building was constructed in the year 1970 and the same was not disputed by the respondents in their evidence. Thus, at the time of filing the Rent Control Petition, the petition schedule building was aged 42 years only. Thus it is not a new building. After analyzing Ext C1 commission report, the courts 6 RCR Nos 90 and 95 of 2016 below have placed reliance on Ext C1 commission report to arrive at a finding that the building is not a dilapidated one though it was old. Admittedly the respondents have been carrying on business comfortably and conveniently since 1976 onwards and they have no case that the oldness of the building has affected their business adversely. So they cannot escape from the liability to pay enhanced rent, in terms of prevailing rent under the guise of oldness of the building.

9. The building covered under Ext A7 is situated in the western side of M.G Road in between Jewel junction and Jose junction. The buildings under Exts A8 and A9 fetch more than 100 per sq ft as rent. After considering Ext A7 to A9 rent deeds in the light of Ext C1 commission report the courts below observed that it is evident that the prevailing rent in respect of building in M.G Road is above 100 per sq ft and the building covered under Ext A7 is older than the petition schedule building. Though the respondents contended that the building covered in Ext A7 to A9 are not similar and they are new buildings no evidence was adduced from the part of the respondents to prove the said contention. Therefore, the courts below are justified in relying on Exts A7 to A9 particularly when it has come out in evidence that the building 7 RCR Nos 90 and 95 of 2016 covered in Exts A7 is older than the petition schedule building and the prevailing rent of that building is more than 100 per sq ft. At any viewpoint, the courts below are justified in fixing the fair rent granting 30% increase to the fair rent so fixed in every five years, to a building having rent at the rate of 1 per sq ft only at present. Thus, we concur with the findings of the courts below and we do not find any kind of illegality or impropriety in the determination of fair rent by the courts below.

10. More importantly, this Court in 2004 (1) KLT 767 (Edger Ferus vs. Abraham Ittycheria) has issued certain guidelines for the determination of fair rent. In this decision it is held that while determining fair rent the Rent Control Court shall take into consideration the prevailing rent in the locality for the similar accommodation and the inflation and resultant reduction in the purchasing power of money and variations in the cost of living index in the area. In view of the aforesaid guiding factors, we find that the fair rent granting 30% increase to the fair rent so fixed in every five years, to a building for which no revision of rent was effected since 1976, is justifiable at any viewpoint.

11. Though, the learned counsel for the petitioners in 8 RCR Nos 90 and 95 of 2016 RCR 90/2016 advanced arguments for enhancing the fair rent we are of the opinion that the courts below have taken a reasonable yardstick in the determination of fair rent. This court is not inclined to re-appreciate the entire evidence and to take a different view other than concurrent views of the courts below, unless the findings have been vitiated by perversity. In this revision, the petitioner has no case that the courts below have omitted to consider any valuable evidence or placed reliance on any irrelevant evidence or wrong proposition of law. In the instant case we do not find any kind of perversity in the appreciation of evidence by the courts below. Therefore we find that both Rent Control Revisions are devoid of merits and dismissed accordingly.

K.HARILAL Judge A.M.BABU Judge sks/1.11.2017

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