Gela Ram vs Satpal Sharma

I.S. Tiwana, J.—These two Civil Revision Petitions Nos. 3346 and 3347 of 1986, under the Haryana Urban (Control of Rent and Eviction) Act, 1973, were admitted to be heard by a Division Bench primarily for the reason that correctness of the opinion expressed in Bhim Sain and another v. Smt. Pushpa Devi of Charkhi Dadri 1984 H.R.R. 418, was doubted. It pertains to the interpretation of section 4(3) of the Act the relevant part of which reads as follows:-

Determination of fair rent.-

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(3) In fixing the fair rent, under this section, the Controller may allow an increase or decrease on the basic rent determined under sub-section (2), not exceeding twenty five per centum of the fall in the general level of prices since the date of agreed rent or the date of application, as the case may be, in accordance with the average of All India Wholesale Price Index, number as determined by the Government of India, for the calender year immediately proceeding the date of application.

The learned Judge in Bhim Sain''s case (supra) while fixing the fair rent in the light of sub-section (3) reproduced above, expressed himself in the following manner:-

The Rent Controller found that the wholesale price index in 1955 was 91.5 and 420 in 1977. The learned counsel for the petitioner had conceded before the Rent Controller that the wholesale price index for the year 1977 may be taken into account. The difference between the wholesale price index of 1955 and 1977 is 328.5. The basic rent fixed u/s 4(2) of the Act can be increased to the extent of 25 per cent of the rise in the general level of price index since the date of the agreed rent upto the year immediately preceding the date of the application. The difference of All India wholesale price index of 1955 and 1977 is 328.5. Twenty-five percent of 328.5 comes to a round figure of 82. The fair rent of the shop in dispute is thus fixed at Rs. 37.50 + Rs. 82/- = Rs. 119.50. The finding of the Appellate Authority is modified accordingly.

It is thus plain that while allowing the increase in the basic rent as determined under sub-section (2) of this section i.e. Rs. 37.5 P.M., the learned Judge instead of taking the percentage of rise in the level of pries in the light of the average of All India Wholesale Price Index as the basis for the increase, took 25% of the general rise in prices i.e., Rs. 328.5 itself as the amount to be increased in order to fix the fair rent under sub-section (3) This, on the face of it, is not the true import of this sub-section. The increase in the general level of the prices is to be noticed only to find out the percentage of the rise in prices in the light of All India Wholesale Price Index. In order to be explicit or to be more specific, it may be pointed out that in the above noted case the increase that could be ordered over and above the basic rent in order to fix the fair rent was to be Rs. 30.75, i.e., 82% of the basic rent which in turn was 25% of the percentage of rise in prices, i.e., Rs. 328.5 as indicated by the wholesale price index of the years 1955 to 1977. In case the methodology applied by the learned Judge in Bhim Sain''s case (supra) is to be accepted as correct, then each and every basic rent, irrespective of its rate, was to be increased to the same extent, i.e., by Rs. 82/- in order to fix the fair rent of the demised premises This certainly is not the true implication of this sub-section. As a matter of fact, the index number as such has nothing to do with the rate of rent of a particular premises. As is commonly said, index numbers are only barometers of economic activity, i.e., if one wants to get an idea as to what is happening to economy, he has to look to important indices like the index number of industrial production, agricultural production, business activity, etc. Thus when one has to gay that the index number of wholesale prices is 112 for September 1987 as compared to September 1986 when it was hundred, it means there is a net increase in the prices of wholesale commodities to the extent of (sic)2% during the year. This percentage has only to be found out to work out the percentage by which the basic rent has to be increased in order to fix the fair rent. We thus overrule the said judgment to the above noted extent.

With the expression of opinion we direct that the records of these cases be placed before a learned Single Judge for the (sic) disposal on merits.