S. Attendrooloo Ghetty's Charities and Others vs Sadhana Aushadalaya

T. Ramaprasada Rao, J.—The landlords in the former case and the landlady in the latter case are the petitioners, being dissatisfied with the

order of the appellate authority under the Madras Buildings (Lease and Rent Control) Act, 1960, hereinafter called the Act, in the matter of the

fixation of fair rent for the portions in the occupation of their respective tenants, have come up to this Court to revise the order of the appellate

authority.

In C.R.P. No. 551 of 1965, the petitioners are the Board of Trustees in management of S. Attendrooloo Chetti''s Charities. The tenant is

Sadhana Aushadhalaya, occupying the ground floor of premises No. 17-A, Broadway, Madras. The landlord filed an application u/s 4 of the Act

for fixation of fair rent for the portion in its occupation which consists of an office hall and a bathroom-cum-dressing room with other amenities

therein. The Rent Controller fixed the rent at Rs. 300. The appeal by the landlords was dismissed by the appellate authority. The landlords having

come up in revision, have rested their contentions on the following two grounds : (1) the apportionment of the value of the site between the first and

the second floors of the building is not strictly in accordance with law and (2) the ten per cent provided by the Courts below as and towards

amenities is too low and they are entitled to the maximum of 25 per cent.

In C.R.P. No. 632 of 1965 the main contentions are (1) the Court below has no jurisdiction to reduce the rent which the premises was already

fetching, while enquiring into a petition for fixation of fair rent, and (2) the apportionment of the value of the site in equal proportions between the

first and the second floors is not in'' accordance with law.

It may be noted that the petitioners before me did raise in the grounds of revision many other contentions. But they are purely factual in nature

and findings of fact having been rendered by the Courts below on such other points raised in the grounds of revision. I am unable to interfere with

the same. In fact, they were not even seriously pressed before me. I am therefore considering the most important question as to whether the

apportionment of the value of the site on which the entirety of the building stands between the two floors of the building is a principle which is

correct. In C.R.P. No. 551 of 1965 Sri P. Venkatasawami, learned Counsel for the petitioners, also stressed before me that the ten per cent

provided for as and towards amenities as against the maximum statutory percentage of 25 is inequitable and has to be reconsidered.

Section 4 of the Act lays down the principles for the fixation of fair rent. It also prescribes certain other guiding rules as well for the ultimate

quantification'' of such fair rent. Whether the premises is a residential building or a non-residential building, it is imperative, while arriving at the total

cost of the building, to take into consideration the market value of that portion of the site on which the residential or non-residential building is

constructed. In the case of a residential building six per cent gross return per annum on the total cost of the building shall be deemed to be the fair

rent. In the case of non-residential building, nine per cent gross return per annum on the total cost of the building shall be deemed to be the fair

rent. As I have stated, the total cost referred to in Section 4(2)(a) and 4(3)(a) of the Act, includes the actual cost of construction which again has

to be arrived at in accordance with the guiding rules and principles laid down in the Act and the Rules framed thereunder. It should also be noted

that additional allowances can also be made for considerations such as the locality in which the building is situate, features of architectural interest,

accessibility to market, nearness to railway station or educational institution and such other amenities as may be prescribed; in the case of a non-

residential building, the purpose for which a non-residential building is used is also one of the considerations that can be taken into account. In

C.R..P. No. 551 of 1965, the building is a non-residential one. In C.R.P. No. 632 of 1965, the premises is a residential one.

The more important question, therefore, for consideration is, what is the meaning of the expression, "" the market value of that portion of the , site

on which the building is constructed "". ""Site"" means the general locale upon which the house is built. Sir George Jessel, M.R. in yorkshire Fire and

Life Insurance Co. v. Clayton 8 Q.B.D. 421.

Formerly, houses were buildings so that each house occupied a separate site, but in modern times a practice has grown up of putting separate

houses one above the other. They are built in separate flats or storeys, but for all legal and ordinary purposes they are separate houses. Each is

separately let and separately occupied, and has no connection with those above or below, except in so far as it may derive support from those

below instead of from the ground as in the case of ordinary houses.

This observation is of universal application. The modern concept of a house or tenement has acquired a secondary signification. It includes also

a flat. So, where there is a building which has two or more storeys, each flat or storey is a building. This also gains support from the definition given

to the word '' building'' in Section 2(2) of the Act, which provides:

''building'' means any building or part of a building.

Therefore, what is the site on which the first, second or the storey of a composite or a large building stands? In re Feeney Inglis v. Mayor and

Co. of Birmingham 24 T.L.R. 314, Eve, J., had to interpret the word ''site'' appearing in a testament. There, a testator, by his will, bequeathed a

sum of money to the Birmingham Corporation to be applied by them towards the cost of erecting an art gallery on a '' site '' to be provided by the

Corporation. The following passage in that judgment, referred to also in Roland Burrows'' '' Words and Phrases '' gives a Very clear interpretation

of what the word '' site '' means:

The executors...contend that what the testator contemplated was a separate building erected and directly resting on a plot of land to be provided

by the Corporation, and they insist that the word '' site'' means the ground upon which the building has been or is to be erected; and cannot be

read as applicable to an artificial house upon which the new erection is to be superimposed. The Corporation, on the other hand, argue that,

although the word '' site '' may as a general rule be held to refer to an area on the ground level, it is not confined to that level and does under some

circumstances signify the superficial space on which the building stands, even though that space be at a higher level than the ground level.... The

question, therefore, is whether the word '' site'' so necessarily imports an area or plots of land as to preclude its being judicially applied to a

superficial area which includes no land or ground as popularly understood. I have looked again at all the dictionary quotations to which my

attention has been called, and having given the best consideration I can to what was urged on both sides, I have come to the conclusion that I

ought not to attach to the word the restricted meaning for which the executors contend.

The word ''site'' appears in Section 14(1)(b) of the Act. Natesan, J., had occasion to consider the meaning of this word in R. Sundaram v. A.D.

Peter (1966) I M.L.J. 342. The learned Judge expressed his opinion thus:

The word '' site '' can have an extended as wall as a restricted meaning. But the dictionary meaning of '' site '' includes the place or position

occupied by some specified thing. If a shed is a building under the Act then the terrace on which it stands will be the '' site '' as used in Section

14(1)(b) of the Act. The word '' site '' does not necessarily mean only the ground but could also include in certain circumstances an artificial base

on which a new erection is to be superimposed.

Maxwell on "" The Interpretation of Statutes "", 11th Edition, states at page 58:

It is in the interpretation of general words and phrases that the principles of strictly adapting the meaning to the particular subject-matter with

reference to which the words are used finds its most frequent application. However wide in the abstract, they are more or less elastic, and admit of

restriction or expansion to suit the subject-matter. While expressing truly enough all that the Legislature intended, they frequently express more in

their literal meaning and natural force; and it is necessary to give them the meaning which best suits the scope and object of the statute without

extending to ground foreign to the intention. It is, therefore, a canon of interpretation that all words, if they be general and not express and precise

are to be restricted to the fitness of the matter.

If therefore the subject-matter with reference to which the word is used can be taken into consideration while interpreting a general word, then

an elastic or restricted meaning can be attributed to such a word so as to advance the remedy provided for by the statute. The Act being of a

remedial nature, it is pre-eminently necessary that the words therein contained should be liberally interpreted so as to bring out the real import of

the same and give to the persons concerned the benefit intended by such legislation. I have also referred to the modern concept of a house which

includes a flat. It therefore follows that the '' site '' in so far as a flat or storey is concerned, is that on which a flat or a storey immediately is

superimposed or stands. No doubt, the flat gains support from the things below it, including the ground. But it cannot be said that the expression ''

site '' in Section 4(2)(b)(ii) or in Section 4(3)(b)(ii) would mean always the ground on which the totality of the building has been constructed. Thus

interpreted, the '' site'' in so far as the ground floor is concerned, would be the site as ordinarily understood and on which the ground floor stands;

but the '' site '' with reference to the first, second or the nth floors, would mean that portion of the building on which the respective fiat or storey is

built upon or imposed; but it should not be forgotten that the weight of the storey or the flat concerned is borne not only by that on which such

structure is superimposed, but also, to a considerable extent by the ground on which the entire building stands. There can be no dispute that every

flat or storey of any building derives support from that below it as also from the grounds on which the building stands.

Having thus far considered the meaning of the word '' site'', the question still remains as to how best to implement the express words of the

statute provided for in Section 4(2)(b)(ii) or Section 4(3)(b)(ii) of the Act. The Act makes it obligatory that to arrive at the total cost, the market

value of that portion of the site on which the residential or non-residential building is constructed, has to be taken into consideration. Therefore, if a

building consists of more than one storey, how is the market value of that portion of the site in each case to be evaluated?

In Namasivaya Chettiar v. Appuswamy Iyer C.R.P. No. 486 of 1964, Anantanarayanan, J., (as he then was) observed as follows:

But since, for the purpose of the Act, the actual plinth area upon which the construction concerned stands, has to be taken into account, and a

strict interpretation of this will mean that the plinth area for the first floor, as distinguished from the ground floor, must be assessed as '' nil'' value, it

appears to me that some such expediency as that actually adopted in the case is inevitable.

The expediency referred to by the learned Judge is the formula adopted by the Court below which is to the following effect; the fair rent is

sought to be fixed with reference to the first floor of the building, and for purpose of computation of such fair rent, the Court below has adopted a

formula of taking the plinth area of the first floor as half the actual area upon which the construction was erected. In Vasantha Watch Co. v.

Saraswathi Time Equipment C.R.P. No. 583 of 1964, the same rule was adopted by the learned Judge. In this case also, the following

observations are apposite:

I am unable to hold that the Courts below were in error in taking the area of the floor for computation purposes as half of the plinth area;

otherwise, and if the letter of the rules has to be adhered to, there would be no floor area at all for the simple reason that this is the first floor of the

building, and not the ground floor.

I respectfully agree with the principles adopted by the learned Judge. I am also of the view that in the case of buildings having more than one

floor the principle ought to be one of apportionment in accordance with the number of storeys. If there are two storeys, the market Value of the

land for the first floor will be half. If there are more than two storeys, it will be proportionately distributed in accordance with the number of storeys

in the building. If a literal interpretation were to be given to the meaning of the Act, it would either result in a conclusion that there is no site for the

first, second and the nth storey at all which has to be considered, or taking the extreme View, such value of the site below has to be added on to

each of the storeys in the building. Such addition of the value of the site to each of such storeys would, in my opinion, result in unjust enrichment to

the landlord or the landlady, which has to be relieved against, bearing in mind the beneficial aspect of the Act. I am therefore of opinion that the

principle adopted by the lower Court in apportioning the value of the site as between the two storeys in both the Civil Revision Petitions is well

founded.

In C.R.P. No. 551 of 1962, the additional question arises whether the ten per cent provided for as and towards amenities is just and proper. It

is not to be forgotten that Broadway is a principal arterial road in the city which is as important as any other important road but for the length and

breadth. Its prominence cannot be lightly brushed aside. The Act itself provides for allowances being made for consideration of locality in which

the building is situate, accessibility to market, nearness to railway station etc. The majority of the amenities contemplated in Rule 13 of the Madras

Buildings (Lease and Rent Control) Rules, 1961, are also available. In my opinion, the provision of ten per cent as allowances towards such

amenities appears to be meagre. The Act provides for a maximum of 25 per cent. I should think that in the instant case fifteen per cent of the cost

of construction as calculated in the manner prescribed may reasonably be allowed as allowances for the considerations aforesaid for this particular

building. C.R.P. No. 551 of 1965 is therefore partly allowed and is remitted back to the Rent Controller for working out and fixing the actual rent

payable by the tenant to the landlord. C.R.P. No. 632 of 1965 is dismissed as there is no substance in the other contention that in an application

for fixation of fair rent, the Court cannot reduce the rent already paid by the tenant. In an application of the kind above, such risks are necessarily

involved. There will be no order as to costs in both the Civil Revision Petitions.