Jagdish Parshad and others vs Raghubar Dayal Bhargava

Mehar Singh, C.J.—The contractual rent of the demised property as between the parties is Rs. 115/- per mensem. The tenant, who is the applicant here in this revision application, made an application u/s 4 of the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act 3 of 1949), for fixation of fair rent. The Rent Controller fixed the basic rent at Rs. 10/ per mensem, and allowing the statutory increase at 37(1/2) per cent, he fixed the fair rent at Rs. 1375 per mensem by his order of November 24, 1967, but on appeal the Appellate Authority by its order of May 13, 1963, reversed the order of the Rent Controller and fixed the contractual rent as the fair rent plus taxes. It is the tenant who as stated is in revision at this stage.

in Sub-section (2) of Section 4 of the Act, for determining the fair rent the Rent Controller has first to fix the basic rent taking into conside-ration (a) the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months prior to January 1, 1939. and of this no party has led any evidence in the present case ; and (b) the rental value of such building or rented land if entered in property tax assessment register of the municipal, town or notified area Committee, cantonment board, as the case may be, relating to the period mentioned in Clause (a) above, in regard to which the tenant produced Exhibit A 9, copy of an entry from assessment list of house tax for the year 1938-39, and Exhibits. A 10, copy of an entry from the property tax register for the same year, in both of which the annual rent of property No. 401 given has been Rs. 300/-. The concurrent finding of the authorities below is that the demised property is part of what was in Exhibits. A. 9 and A. 10 property No. 401. The rental of Rs. 300/- was for the whole property.. which was in the occupation of the landlord. The Rent Controller worked out the pro-portion of the rent of Rs 300/- per annum for this property qua the demised portion with the tenant and arrived at the figure of Rs. 10/-per mensem, or Rs. 120/- per annum, and this has been maintained by the Appellate Authority. The authorities below rejected an argument that in the circumstances the apportionment of rent could not be done in this manner, and this argument was rightly rejected in the circumstances of this case, because there has been no other evidence available which indicates the basic rent of the demised portion in the twelve months preceding January 1, 1939. So far there is no difficulty. It has already been stated that there is no evidence of consideration (a) in Sub-section (2) of Section 4 of the Act in this case and evidence is only confined to consideration (b). It is contended by the learned Counsel for the landlord, referring to R. S. Lehnu Mal Thaker Das v. Harish Chandra C R. 272 of 1952. Civil Revision No. 272 of 1952, decided on March 24, 1954, that the Rent Controller was in error in fixing fair rent on the basis of the evidence on consideration (b) of Sub-section (2) of Section 4 of the Act. only, and while this case tends to support the argument but not on the facts of the present case, because it appears that, unlike the present case, in that case there was either evidence on the record or available for consideration (a) in Sub-section (2) of Section 4 of the Act. As no such evidence on that consideration has been led in this case and it is not shown from the record that any such evidence was available and has not been produced, so that case is not helpful in the decision of the present case. The learned Counsel for the landlord then contends that the Rent Controller was in error in reiving on the entries in the assessment list of house tax or in the property tax register, as in copies Exhibits A. 9 and A 10, because in the case of such taxes, and particularly when the property is in the occupation of the landlord himself, as has been the case here, the landlord is interested in showing the rental value at the lowest possible figure to escape taxation, and in support of this approach he refers to two cases. Firm Ram Kishan Dass Chettar Bhuj v. Gordhan Dass C R. 211 of 1959, Civil Revision No, 211 of 1959, decided on February 5, 1960, in which the learned Chief Justice did observe that the landlords or owners give low figures of annual returns on properties for the purposes of house or property tax, and, the second case, Mehar Chand v. Lekh Ram, C. R.125of 1961 Civil Revision No. 125 of 1961, decided on October 16, 1961, in which because of the availability of other evidence on the record both the Rent Controller and the Appellate Authority had found the entries in the property tax register not reliable, and that the learned Judge accepted. Here, however, the entries were found as reliable by the Rent Controller, and the Appellate Authority has not said that those entries have not been reliable. The fact that in the case of house or property taxes there is a tendency to show as low a figure of annual return as may be possible, may not be incorrect, but if there is no other evidence available such evidence is expressly made a consideration in determining basic rent according to Section 4(2)(b) of the Act. The learned Counsel for the landlord urges that basic rent can only be fixed when both the considerations in Sub-section (2) of Section 4 have been brought to bear,and that must be so where material with regard to both those considerations is available on the record, but here is a case in which material has been only available on consideration (b) and not on consideration (a), and surely it is not suggeted that in such circumstances the Rent Controllers helpless in fixing the fair rent.

The argument on the side of the tenant is quite simple that the Rent Controller had to fix fair rent in the terms of Sub-section (2) of Section 4 of the Act and in doing that he must first fix basic rent as it is expressly so provided in Sub-section (2), and while fixing basic rent he has to take into consideration the two matters enumerated as Clauses (a) and (b) under this Sub-section. In this case no material has been available under consideration (a) and the material avilable under consideration (b) supports the conclusion of the Rent Controller. In the circumstances the learned Counsel contends that the only possible way in the present case was for the Rent Controller to fix basic rent under Sub-section (2) of Section 4 and then to fix the fair rent after allowing the statutory increases. In this case there is no evidence that there has been a change in the demised part of the property itself. In the circumstances and in view of the material and evidence available, the Rent Controller had no option but to proceed in the manner in which he did, that is to say, to take the rent of the twelve months prior to January 1, 1939, as the basic rent, and since the rent of that year available was for the whole property, he had to make a reasonable approach to apportion that rent to the demised part of the property. In this way he arrived at the basic rent of Rs 10/- per mensem and, allowing the statutory increase on the same, fixed the fair rent at Rs. 13.75 per mensem.

The reasons why the Appellate Authority has reversed the order of the Rent Controller are two (i) that no material has been available for consideration (a) in Sub-section (2) of Section 4, and (ii) that Gurgaon town, on a side of which the demised property is situate, which side in the year 1938-39 was not fully built up, has developed out of all proportions and to an enormous extent, an idea of which being available from the population figure which from 8000 in 1938-39 had risen to something like 50,OOO by 1968. So relying upon the Full Beuch decision reported as Chanan Singh v. Sewa Bam,(1966 P. L. R, 335) the Appellate Authority came to the conclusion that the rent of the demised property in the year 1938-39 was no criterion for fixing fair rent and that contractual rent, in the circumstance of the case, is the fair rent. Chanan Singh''s case, concerns an utter change in the locality in which the demised property was situate and not whole development of a particular town. In this case there is no substantial evidence of any appreciable development of the locality in which the demised property is situtate. So this matter is not dealt with by the Appellate Authority. So far as the evidence is concerned, Mr. Om Jiwan Advocate as R. W. 1 says nothing much on this aspect of the matter, while Mr. Sant Lal Jain. Administrative Officer of Dalmia Cenment Bharat Ltd., of Delhi as R. W. 2 says that the plots of the demised property were auctioned in 1929 and during the succeeding four or five year the disputed building and five other plots were constructed. He then says that the prosperity of the town has enormously increased without detailing what substantial changes have occurred in the bazar or locality where the demised property is situate. There is then the landlord him self as R. W. 3 and it is he who says that new building have cropped up in the locality where this property is situate and he says now pagri or excess payments are demanded for taking on rent properties in Gurgaon town. So that there has been no satisfactory evidence in regard to the development in the particular locality to such an extent that a finding could have been given by the authorities below that the locality has changed subst-antially or out of all recognition. So Charan Singh''s case 1966 P.L.R, 335 has no application to the facts of the present case. It probably is true that rents have gone high in Gurgaon and that is for quite another reason, the reason being that Delhi is spreading out also in the direction of Gurgaon. All the same that is not the type of thing to which Chanan Singh''s case applies. It applies to the development of a locality in which any demised property is situate and for that there was no evidence which was considered by the authorities below. The learned Counsel for the landlord then says that being the case, this be remanded back for an enquiry by the Court below, But if this is what is the stand that the landlord wanted to take, this he should have done before the authorities below and an approach of this type is not admissible in a revision application by the tenant

In the circumstances of this case there was no justification whatsoever for interference by the Appellate Authority in the order of the Rent Controller which was based on the evidence best as has been available on the record u/s (2) of Section 4 of the Act. So the order of the Appellate Authority is set saide and that of the Rent Controller is restored, with costs to the tenant throughout, counsel''s fee in this revision application being Rs. 32/-.