Gobind Ram vs Kanshi Ram

N.K. Sud, J.—The short controversy involved in the present civil revision is as to whether after the expiry of the period of a contractual tenancy, the rent mentioned in the rent agreement can be said to be the rent agreed within the meaning of Section 1(2) (b) of the Haryana Urban (Control of Rent & Eviction) Act, 1973 (for short the ''Act'').

The admitted facts are that the Respondent-landlord had entered into a rent agreement dated 18-12-1972 giving the tenanted property on rent for a period of one month i.e. from 15-12-1972 to 14-1-1973 of Rs. 400/- per month. The landlord filed an application on 26/27-9-1980 for determination for fair rent u/s 4 of the Act. The Rent Controller vide order dated 21-7-1983 fixed the fair rent at Rs. 866. 25 Ps. per month. This determination was made on the basis of the prevalent rent in the locality at the relevant time. The tenant filed an appeal before the Appellate Authority, Hissar, contending that the rent stipulated in the rent agreement should have been considered as rent agreed upon between the landlord and the tenant preceding the date of application for determination of fair rent u/s 1(2)(b) of the Act. He, therefore, challenged the action of the Rent Controller in determining the fair rent on the basis of rent prevailing in the locality for similar buildings. The Appellate Authority rejected this contention on the ground that since the period of tenancy as mentioned in the rent agreement had already expired, the rent mentioned in the rent deed could not be treated as rent agreed upon between the landlord and the tenant preceding the date of application. He placed reliance on the judgments of this Court in Kailash Chancier Jam v. Mool Raj Sondhi. 1982(2) RCR 273 and also in Puram Chand v. Hardwari Lal, 1977 RCR 643. It is against these findings the present civil revision has been filed.

Mr. Shailender Jain, Advocate, appearing on behalf of the Petitioner submits that the findings of the Authorities below are based on the Single Bench judgment of this Court in Kailash Chander''s case (supra), which stands overruled in the subsequent Division Bench decision of this Court in Registered Firm M/s Bhagwan Singh & Company v. The Central Bank of India Branch at Kaithal through its Manager3, (1988)93 P.L.R. 290 and Ved Parkash v. Raj Rani and ors,4 (1988)98 P.L.R. 338. In these cases, it was held that if a building had been let out for a specific period, the rent fixed by the parties is considered as agreed rent within the meaning of Section 4(2) (b) of the Act even after the expiry of period of tenancy.

On the other hand, Mr. Sanjay Bansal, Advocate, appearing on behalf of the Respondent relies on the decision of the Apex Court in Ishwar Swaroop Sharma v. Jagmohan Led5, AIR 2001 SC 370, wherein in it has been clearly held that for fixing the rent u/s 4 of the Act, the only question would be - was there a subsisting agreement of tenancy under which rent was payable when the application for fixation of fair rent was filed.? If the answer was in the affirmative, the agreed rent must be taken as the basic rent. If not, then the basic rent is the prevailing market rate. In the present case, it is apparent that the contractual tenancy had already come to an end on 14-1-1973 as the rent agreement dated 18-12-1972 was only for a period of one month. It is true that even after termination of contractual tenancy, the tenant had been paying rent @ Rs. 400/- per month, but that was in accordance with the provisions of Section 2(h) of the Act which makes the tenant liable statutorily to pay the rent. Paras 10,11 and 13 of the judgment of the Supreme Court are reproduced below for the sake of convenience

The tenancy being terminated the agreement ceases to operate as a voluntary bilateral transaction. With the cesser of the agreed tenancy, the agreement as to rent would also cases(sic). Nevertheless, u/s 2(1.) of the Act, the tenant would liable statutorily to make payment of ''rent''. Similarly after fair rent is fixed u/s 4 of the Act, the rent payable is not the agreed rent.

Therefore, for the purpose of determining fail rent Section 4(2j (b) draws a distinction between cases where the parties have agreed to the rent and cases where rent is payable otherwise than by agreement. In the first case, the agreed rent is to be taken as the base and the increase determined according to the formula provided in Section 4(3). In the second case, the base is the market rate.

For fixing the basic rent u/s 4 of the Act, only question would be -was there a subsisting agreement of tenancy under which rent was payable when the application for fixation of lair rent was filed? If the answer is in the affirmative the agreed rent must be taken as the basic rent. If not. then the basic rent is the prevailing market rate. Therefore, even though the agreement may have been entered into in 1976 as is admittedly true in this case, but the tenancy was continuing until the date of the application, the Rent Controller was obliged to take the rate agreed to in 1976 as the basic rent under the first limb of Section 4(2){b). It is only after the fair rent is fixed that the landlord could seek re-fixation under the second limb subject to the limitations provided in the Act, as the rent would then cease to be the agreed rent.

Thus, I am of the considered view that the matter stands concluded by the Apex Court. In the present case, the tenancy had come to an end on 14.1.1973 and thus the rate of rent mentioned in the rent agreement could not be said to be the "rent agreed between the landlord and the tenant preceding the date of application." The decisions of this Court in M/s Bhagwan Singh & Company''s case (supra) and Ved Parkash''s case (supra) do support the contention raised on behalf of the Petitioner tenant. However, in my view, these decisions stand impliedly overruled in view of the decision of the Supreme Court in Ishwar Swaroop Sharma''s case (supra).

Accordingly, I see no merit in this Civil revision, which is hereby dismissed. No costs.