P.C. Roy Choudhury vs Satya Brata Roy Choudhury

Renupada Mukherjee, J.—These two Rules arise out of one judgment passed in appeal by the 9th Court of the Subordinate Judge at Alipore. It appears that the sole opposite party of these two cases filed an application each for standardization of rent in respect of the premises in his occupation. These two applications were dismissed by the learned Additional Rent Controller and in two appeals preferred by the Landlord; the learned Subordinate Judge reversed the order of the Rent Controller and remanded the cases to him for fresh decision in accordance with some observations made by him. The landlord-Petitioner obtained the present Rules against the appellate order.

From the records of the learned Additional Rent Controller it would appear that the sole opposite party of each of these two cases occupies a portion of premises No. 18B, Bhabananda Road as a tenant under P.C. Roy Choudhury, the landlord Petitioner. The contractual rent of opposite party Satya Brata Roy Choudhury is Rs. 451 per month and the contractual rent of Pramatha Nath Ghatak, the tenant in the other case, is Rs. 60 per month. The contention of the tenants before the learned Additional Rent Controller was that the contractual rent in each of these two cases is too high and exorbitant and the Rent Controller was asked to determine the standard rent of these two premises at a rate which should be fair and reasonable. Apparently both the applications were treated as being governed by Section 9(1)(g) of the "West Bengal Premises Rent Control Act, 1950. As no other provisions of this Act for fixing the standard rent apply to these premises the learned Additional Rent Controller attempted to determine the standard rent at a rate which should be considered to be fair and reasonable. It appears on an examination of the records of the Additional Rent Controller that evidence of two kinds was adduced on behalf of the tenants for the purpose of determination of fair and reasonable rent. One kind of evidence related to the costs of construction of the disputed premises and another kind of evidence related to the rent of some premises in the locality having similar advantages and amenities. For the purpose of determination of the costs of construction of the premises the services of an Inspector were requisitioned by the learned Additional Rent Controller. The Inspector inspected the premises and submitted, a report after recording some evidence. The costs of construction were estimated by the Inspector at a sum of Rs. 14,764 allowing contingency at 10 per cent. The report was rejected by the learned Additional Rent Controller on the ground that it was incomplete and the Inspector had not estimated the costs in respect of some items of construction. As the costs of construction of the building could not be properly estimated, the learned Additional Rent Controller thought that it would be needless for him to go into the evidence which had been adduced by the tenants to show the prevailing rent of similar premises in the locality possessing similar advantages and disadvantages. Ultimately he was of opinion that the tenants had failed to make out any case u/s 9(1)(g) of the Rent Control Act, 1950, and so he dismissed the applications. Against that dismissal the tenants moved the appellate court and the appellate court remanded the applications to the learned Additional Rent Controller for fresh, trial in accordance with some observations made by him. The order of the appellate court has been challenged in the present proceedings in High Court.

Mr. Roy Choudhury appearing on behalf of the Landlord-Petitioner in these two cases drew my attention to certain portions of the order of the appellate court. The order of the appellate court is inordinately long. I have gone through the whole of this order and there is no shadow of a doubt in my mind that the order is so very diffuse and complex and it contains so many illegal observations that it would not be proper to ask the learned Additional Rent Controller to dispose of the applications of the tenants in accordance with the observations made by the appellate court. Suffice it to say that the order of the appellate court cannot stand and it must be set aside.

While setting aside the order of the appellate court, I must say that the order passed by the learned Additional Rent Controller on the two applications of the tenants is not a proper or legal order and it cannot be sustained. Under the provisions of Section 9(1)(g) of the Rent Control Act, 1950, it was the duty of the Additional Rent Controller to determine the standard rent of the disputed premises at a rate which is fair and reasonable. The Rent Control Act itself does not lay down any provision or procedure for determining the fair and reasonable rent in such a case. So it stands to reason that the Rent Controller should be guided in such a case by ordinary principles of justice, equity and good conscience. It is no doubt true that some observations have been made in some decided cases as to the manner in which such fair and reasonable rent should be determined. I must however observe that such observations can never be exhaustive nor can they apply uniformly to all premises, the determination of the standard rent of which would be governed by the provisions of Section 9(1)(g) of the Rent Control Act, 1950. In this particular case the tenants sought to assist the learned Rent Controller in two ways, namely, by giving evidence about the estimated cost of construction of the premises occupied by the tenants and also by showing what is the prevailing rent of neighbouring premises possessing similar advantages and disadvantages. The Rent Controller thought that the estimate of costs prepared by the Inspector was not acceptable. He observed that costs of several items of construction have been left out and there is no reliable evidence about the value of the land on which the building stands. If the costs of several items of construction have been left out in the report of the Inspector, it was the duty of the learned Additional Rent Controller to ask him to fill up the lacuna after taking necessary evidence from the parties. As this was not done, both parties must be given an opportunity to adduce further evidence regarding the costs of construction of the items left out in the report of the Inspector. In this connection I would also give an opportunity to both parties to adduce evidence regarding the value of the land at the time when the applications for standardization of rent were made. I must observe however that the learned Additional Rent Controller was wrong in thinking that the expenditure incurred by the landlord on account of payment of municipal taxes and for repairs and maintenance of the premises is a part of capital expenditure. These are recurring costs which every owner of a house-property must incur. They cannot constitute the capital expenditure for constructing a building as has been thought by the learned Additional Rent Controller. So the parties need not adduce any evidence regarding the expenditure incurred by the landlord for payment of the municipal taxes and on account of costs of repair and maintenance.

The learned Additional Rent Controller was further of opinion that as no accurate estimate of the costs of construction of the building could be made, it would be needless for him to go into the evidence adduced in the case for showing the prevailing rent in the locality of premises possessing similar advantages and disadvantages. This observation does not seem to be justified to me. As I have already observed there may be various ways and means for determining the fair and reasonable rent of some premises u/s 9(1)(g) of the Rent Control Act, 1960. Assessing the probable cost of construction of a building and giving the landlord a fair return for his capital expenditure may be one such method. A comparison of prevailing rents of neighbouring premises possessing similar advantages and disadvantages may be another separate method. These two ways of ascertaining fair and reasonable rent u/s 9(1)(g) of the Rent Control Act, 1950, need not necessarily be conjunctive. They may be disjunctive. In the facts and circumstances of a particular case, the Rent Controller may profitably make a comparison of the rates which would emerge by adopting both the above methods, and thereafter he may determine the standard rent at a rate which would appear to be fair and reasonable to him. In my opinion it was not proper for the Rent Controller to refuse to take into consideration the evidence adduced before him about the prevailing rent of the other premises in the locality simply because the estimated costs of the disputed premises could not be ascertained. The order passed by him will, therefore, be set aside and the cases must be remitted to him for fresh trial.

In the result these two Rules are made absolute. The order of the appellate officer which has been complained of by the Landlord-Petitioner is hereby set aside and the two applications of the two tenants involved in these two cases are remitted to the learned Additional Rent Controller for proper trial in accordance with the provisions of Section 9(1)(g) of the West Bengal Premises Rent Control Act, 1950. Before passing his final order the learned Additional Rent Controller will direct the Inspector to complete his report regarding the estimated cost of construction of the disputed premises by ascertaining the cost of construction of such items as have been left out by the Inspector. The latter would also be directed to estimate the cost of the land on which the premises stand at the date of the applications by taking fresh evidence from the parties. After all these materials are complete, the learned Additional Rent Controller will determine the estimated costs of construction of the disputed premises and he would allow the landlord such return on the total costs as may seem to him to be fair and reasonable. The learned Additional Rent Controller will also allow both parties to adduce further evidence regarding the rent of similar premises in the locality possessing similar advantages and disadvantages. On a consideration of all these materials, the learned Additional Rent Controller will fix the standard rent of the disputed premises at a rate which would be fair and reasonable.

Let the records be sent down as early as possible.

In the circumstances of this case, to do not make any order as to costs.