Kishori Lal Prem Nath vs Ved Parkash and others

Gakal Chand Mital, J.—On 11th August, 1982 Kishori Lal Prem Nath (hereinafter called ''the tenant''), filed an application u/s 4 of the East Punjab Urban Rent Restriction Act, 1949 (for short ''the Act''), against Banwari Lal Kanwar Lal (for short ''the landlords''), for fixation of fair rent of the shop, No. 68 in grain market, Moga Mandi. It was pleaded that he was in occupation of a portion of the shop at the rate of Rs. 850/- per annum. According to the tenant the annual rent of the entire shop was Rs. 300/- in year 1938-39 and for the portion in occupation of the tenant, the annual rent came to Rs. 75/- whereas the landlords were charging Rs. 850/-. It was also pleaded that the fair rent of Rs. 850/- fixed by the Rent Controller, by order dated 11th November, 1963, at which rate the rent was being charged by the landlords is not binding on him since that fair rent was fixed by compromise and in law fair rent cannot be fixed on the basis of compromise.

The landlords contested the application and pleaded that the tenant was in occupation of a portion of shop measuring 80 ft x 20 ft and for that portion the Rent Controller had rightly fixed Rs. 850/- per annum as the fair rent, which binds the parties. It was also pleaded that the fresh application for fixation of fair rent was not maintainable in view of section 14 of the Act.

On the contest of the parties several issues were framed and parties led evidence thereon. The Rent Controller held that earlier the basic rent of the shop was fixed at Rs. 300/- per annum and since the area in possession of the tenant was 1/3rd, Rs. 100/- was fixed as the annual rent of the tenant''s portion.

After allowing statutory increase the annual fair rent was fixed at Rs. 137.50, which came to Rs. 11.40 per month.

Feeling aggrieved the landlords went up in appeal. The Appellate Authority vide order dated 27th July, 1978 came to the conclusion that both the parties have failed to adduce evidence to enable the Court to fix basic rent. The evidence led by the parties was not held to be sufficient in doing so because the instances did not relate to instances of same accommodation and in similar circumstances. Accordingly, after taking notice of certain decisions of this Court, the Appellate Authority relying on the agreed basic annual rent of Rs. 567/-, as was agreed between the parties before the Rent Controller, on the basis of which, fair rent was fixed by order dated 11th November, 1963 (Exhibit. A5), the basic rent was fixed as the fair rent. Both the sides felt aggrieved from the aforesaid order. The landlords have filed Civil Prevision No. 1767 of 1978 whereas the tenant has filed Civil Revision No. 1645 of 1978. Since they arise out of the same proceedings, they are being disposed of by this common judgment.

After hearing the learned counsel for the parties and on perusal of the record I am of the view that the fair rent of Rs. 850/- per annum fixed by the Rent Controller, by order dated 11th November, 1963 (Exhibit A 5) does not deserve to be interfered with in this case, and it is in the interest of justice to bind the parties with that order.

Sari H. L. Sarin, Senior Advocate, appearing for the tenant was not able to satisfy me if there is any evidence from which the basic rent of the premises in dispute could be fixed. The shop is in the main grain market of Moga town and out of the shop, portion measuring 80 ft x 20 ft is in occupation of the tenant. Unless a building with similar accommodation and, under similar circumstances in that locality is pointed out, the basic rent of the premises in dispute cannot be determined. The learned counsel has failed to point out any instance in this behalf.

Once evidence is not available in fixing the fair rent, this Court has repeatedly held that the agreed rent is to be treated as the fair rent. In the present case, the parties agreed before the Rent Controller on 11th November, 1963 that Rs. 567/- was the basic tent and on that increase of 50 per cent was allowed in determining the fair rent and that is how Rs. 850/- per annum was fixed as the fair rent by that order. Since 1963 till 11th August, 1972, when the present petition was filed the tenant had been paying rent at the rate of Rs. 850/- per annum.

Section 14 of the Act has been enacted for the purposes of giving finality to the proceedings taken under the Act and is based on the well known rule that party shall not be vexed twice over on the same matter. Section 14 of the Act is in the following terms:--

Decisions which have become final not to be re-opened in appeal:--

The Controller shall summarily reject any application under sub-section (2) or under sub-section (3) of section 13 which raised substantially the issues as have been finally decided in a former proceeding under this Act.

It is true that the aforesaid section refers to the application filed u/s 13 of the Act and has not been specifically applied to proceed dings u/s 4 of the Act. If section 4 of the Act had been included then by virtue of section 14 of the Act, another petition u/s 4 of the Act would not have been maintainable. The Legislature purposely did not include section 4 of the Act within the ambit of section 14 of the Act because the determination u/s 4 of the Act is not between the parties but is considered as a judgment in rem because that judgment goes with the building and not with the parties. Once a fair rent of a building is fixed that fair rent would remain, whether the tenants change or the landlords change, unless there are material alterations or additions in the building. Therefore, in this case while not applying section 14 of the Act, the general rule of not vexing a party twice over would be applicable and the same tenant cannot come in an application u/s 4 of the Act for the second time. If a new tenant had come forward then the matter would have been different. That is why this Court has ruled that determination u/s 4 of the Act is to be on merits and not on the consent of the parties. In that manner fixation of fair rent on the basis of agreement of the parties would not be considered as a fair rent of the premises. In all the decided cases either the tenant or the landlord felt aggrieved from these orders and filed appeals within limitation and challenged the fixation of fair rent on the agreed basis and the matter was remanded with a direction to determine the fair rent after giving opportunity to the parties to lead evidence. It is also the rule laid down by this Court that in case evidence is not available for fixing the fair rent agreed rent should be taken as the fair rent.

Keeping the aforesaid dictum of law in view, for two reasons Rs. 850/- per annum is to be fixed as the fair rent so far as tenant in this case is concerned. The tenant had agreed in the earlier proceedings that the basic rent was Rs. 567/- and fair rent was Rs. 850/- which is incorporated in the order of the Rent Controller dated 11th November 1963. The tenant did not challenge that order in appeal or revision and remained satisfied and kept on paying rent to the landlord at that rate for nearly 9 years. Therefore, on finding that there is no evidence available on the record to fix the basic/fair rent, the rent of Rs. 850/-, which the tenant has been paying for all this time has to be considered as fair rent so far as this tenant is concerned. The second reasoning is that the tenant allowed the earlier order to become final and now would not be entitled to file a fresh petition for fixation of the fair rent on the principal that the opposite side cannot be vexed twice over for the same cause.

In view of the above discussion, it is held that Rs. 850/- per annum is the fair rent between the parties or their successors in interest. The Appellate Authority took notice of agreed basic rent of Rs. 567/- and concluded that this was the fair rent. It did not allow the statutory-increase which in this case would have been 371/2 per cent as the building was completed and material additions were made after 1st January, 1939. Since 50 per cent increase was allowed by order dated 11th November 1963 the fair rent has to be fixed at Rs. 850/- per annum.

For the reasons recorded above, while the tenant''s revision is dismissed, the landlords'' revision is allowed and the fair rent is fixed at Rs. 850/- per annum, equal to Rs. 70.85 per month. The parties shall bear their own costs.