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Judgment
P.B.Suresh Kumar, J.
These revision petitions are instituted under Section 20 of the Kerala Buildings (Lease and Rent Control) Act, 1965 (the Act) challenging the common judgment of the Rent Control Appellate Authority, Palakkad, in terms of which a batch of 12 appeals against the common order passed by the Rent Control Court, Chittur on applications preferred under Section 5(1) of the Act for fixation of fair rent in respect of six shop rooms. has been affirmed with a modification as regards its date of operation.
The subject matter of the proceedings before the Rent Control Court are shop rooms measuring an approximate area of about 200 sq.ft, in two adjacent commercial complexes owned by the petitioners, who are brothers. The said commercial complexes were constructed in the year 1989 and the tenants were inducted between 1989 and 1994. The rent which was being paid by the tenants to their respective landlords for the premises at the time of institution of the petitions was between Rs.900/- and Rs.1200/-. In the applications, the landlords claimed a sum of Rs.8,000/- each per month towards fair rent for the premises.
The applications were tried together. Both the landlords and tenants let in oral as well as documentary evidence. Pws.1 to 7 let in oral evidence on the side of the landlords and Rws.1 to 9 let in oral evidence on the side of the tenants. Exts.A1 to A13 are the documentary evidence adduced by the landlords. The Advocate Commissioner appointed in the proceedings gave evidence as CW1. Exts.C1 to C6 are the reports and Exts.C1(a) to C6(a) are the rough sketches prepared by the Advocate Commissioner. Exts.X1 to X14 are the documents called for by the parties.
Having regard to the materials on record, the Rent Control Court fixed the fair rent of one premises at Rs.2,500/- per month, three premises at Rs.2,700/- each per month and two premises at Rs.2,900/- each per month. It was directed by the Rent Control Court that the fair rent fixed shall be paid from the date of applications. It appears that a uniform fair rent was not fixed as the agreed rent for all the premises varied. Both the landlords and tenants challenged the decision of the Rent Control Court in appeal. The Appellate Authority, on a reappraisal of the materials on record, agreed with the Rent Control Court as regards the fixation of fair rent. The Appellate Authority however, modified the order of the Rent Control Court as regards its operative date from the date of the applications to the date of the order. Both the landlords and tenants are aggrieved by the decisions of the Rent Control Court and the Appellate Authority. Hence, these revision petitions.
Heard the learned counsel for the landlords as also the learned counsel for the tenants.
Sri.T.Krishnanunni, learned Senior Counsel for the landlords contended that having regard to the materials on record, the fair rent fixed by the Rent Control Court, as affirmed by the Appellate Authority is unreasonably low. The learned Senior Counsel has also contended that there is absolutely no justification for the Appellate Authority to take the view that the fixation of fair rent will be operative only from the date of the order.
Per contra, Sri.P.B.Subramanyan, the learned counsel for the tenants submitted that the fair rent fixed by the Rent Control Court, as affirmed by the Appellate Authority is unreasonably high. It was argued by the learned counsel that such a fixation was made based on the rent being paid by the tenants of adjacent buildings. According to him, those buildings are not comparable to the commercial complexes in which the subject premises are situated and that the landlords have not produced any material to show the rent which was being paid by the tenants of the comparable buildings.
In the light of the submissions made by the learned counsel for the parties, the points which arise for consideration are (i) whether the fixation of fair rent made by the Rent Control Court as affirmed by the Appellate Authority is correct and (ii) whether the Appellate Authority is justified in modifying the decision of the Rent Control Court as regards its date of operation.
Point (i) : Before proceeding to deal with the point, it is necessary to remind ourselves the scope of jurisdiction under Section 20 of the Act. Section 20 of the Act reads thus :
Revision. - (1) In cases where the appellate authority empowered under section 18 is a Subordinate Judge, the District Court, and in other cases the High Court, may, at any time, on the application of any aggrieved party, call for and examine the records relating to any order passed or proceedings taken under this Act by such authority for the purpose of satisfying itself as to the legality, regularity or propriety of such order or proceedings, and may pass such order in reference thereto as it thinks fit.
(2) The costs of and incident to all proceedings before the High Court or District Court under sub-section (1) shall be in its discretion.
In Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat, (1969) 2 SCC 74, it has been held by the Apex Court that the revisional jurisdiction of a superior court is part of its appellate jurisdiction and therefore, when the revisional jurisdiction of a High Court is invoked, subject to the limitations placed on its exercise, the High Court is empowered to pass any order which could be passed by it, in exercise of its appellate jurisdiction. Section 20 of the Act empowers the High Court to call for and examine the records relating to any order passed under the Act by such authority for the purpose of satisfying itself as to the legality, regularity or propriety of such order. It also empowers the High Court to pass such orders in reference thereto as it thinks fit. In other words, the High Court is empowered under Section 20 to pass any order as it thinks fit, if it is found that the order in respect of which the jurisdiction of the High Court is invoked, is illegal, irregular or improper. In Nalakath Sainuddin v. Koorikadan Sulaiman, (2002) 6 SCC 1, placing reliance on the decision in Shankar Ramchandra Abhyankar, the Apex Court held that there is no reason to read and interpret Section 20 narrowly and limit the scope of the revisional jurisdiction of the High Court under Section 20. It was also held by the Apex Court in the said case that the only limitation on the scope of the jurisdiction of the High Court under the said provision is that the order sought to be scrutinized must be of a subordinate authority under the Act and if the said limitation does not exist, any illegality, irregularity or impropriety coming to the notice of the High Court, which is capable of being corrected, can be corrected by the High Court by passing appropriate orders as the law requires and justice demands. There may not be any difficulty in understanding the context in which the words legality and regularity have been used in the Section. It is necessary however to consider the context in which the word "propriety" has been used. The said word has different meanings. The
quality of being appropriate or right, is one of the meanings. In Babulal Nagar v. Shree Synthetics Ltd., 1984 Supp SCC 128, the Apex Court has taken note of the fact that another meaning assigned to the word is "justice" and explained that once a jurisdiction is conferred to examine the propriety or impropriety of the order, the jurisdiction is wide and it carries with it the same jurisdiction as the original authority to come to a different conclusion on the said set of facts. It is also clarified in the said case that if any other view is taken, the expression "propriety" would lose its significance. In other words, if jurisdiction is conferred on an authority to examine the proprietariness of an order, the authority would be free to come to an appropriate decision in the given facts.
Having thus understood the scope of the jurisdiction under Section 20 of the Act, let us now consider the first point. As is well known, fair rent is not always what is fair between a particular landlord and a tenant. It is the reasonable rent which a willing tenant would pay to a willing landlord for a building commensurate with the rent prevalent in the locality, having regard to its location and nature. In Edger Ferus v. Abraham Ittycheriya, 2004 (1) KLT 767, it was held by this court that while fixing the fair rent in respect of a premises, the Rent Control Court shall take into account inflation and resultant reduction in the purchasing power of money, variations in the cost of living index in the area since the commencement of the lease, locational importance, demand for accommodation and availability of premises, the cost of construction of the premises, capital value of the premises, type of construction, advantages and amenities of the premises, the prevailing rent in the locality for the same and similar accommodation etc. Keeping in mind the aforesaid guidelines, we shall proceed to examine the legality, regularity and propriety of the impugned orders.
On an elaborate consideration of the materials on record, the Rent Control Court found that the premises which are the subject matter of the proceedings are situated in a commercially important area at Kollengode town in Palakkad District and that there are various commercial and other establishments in and around Kollengode and in close vicinity of the subject premises. It was also found by the Rent Control Court that the rate of rent in the area varies from building to building depending on the time of construction, location, amenities etc. It was further found by the Rent Control Court that in the commercial complexes in which the subject premises are situated, there is no parking facility and water connection. It is having regard to the said facts that the Rent Control Court arrived at the figures to be fixed as the fair rent payable in respect of the premises. On a reappraisal of the materials on record, the Appellate Authority more or less agreed with the findings rendered by the Rent Control Court and consequently affirmed the fixation of fair rent made by the Rent Control Court.
We have perused the materials on record. We agree with the findings rendered by the authorities below that the subject premises are situated in a commercially important area and there are various commercial and other establishments in the close vicinity. As rightly found by the Rent Control Court, the rent in the locality for identical area varies from building to building, depending on the time and nature of their construction and depending on the amenities attached to each of them. According to us, it is, therefore, not safe to fix the fair rent of the subject premises based on the evidence available as regards the rent paid by the tenants occupying identical areas in the adjacent or nearby buildings. The correctness of the fair rent fixed is, therefore, to be examined based on the evidence available as regards the similar premises in the very same commercial complexes.
PW4 is the Manager of Kollengode Branch of Dhanlaxmi Bank. Kollengode Brach of Dhanlaxmi Bank is functioning in the first floor of one of the commercial complexes involved in this matter namely, Vasantha Complex. In the ground floor of the same building, the bank has an Automated Teller Machine (ATM). Ext.X6 is the lease agreement entered into by the Bank with one of the landlords in respect of the premises let out to the Bank for establishing the ATM. Ext.X6 is dated 05.06.2010. In terms of Ext.X6, the Bank has been paying to one of the landlords rent at the rate of Rs.2,900/- per month from 05.06.2010. The area of the premises covered by Ext.X6 is only 81.5 sq.ft. It has come out in the cross-examination of PW4 that the premises covered by Ext.X6 is one constructed as part of the building complex during the year 2010 on the request made by the Bank for establishing an ATM. Although it was stated by PW4 that the rent fixed for the said premises was as demanded by the landlord, he explained that the fixation aforesaid has been made by the Bank having regard to the location of the building, its importance and the various facilities available. PW7 runs a gas agency business in one of the commercial complexes in which the subject premises are situated namely, Gayathri Complex. The area of the premises occupied by PW7 is more or less identical to the area occupied by the tenants in the subject premises. PW7 deposed that the rent of his premises was Rs.1,080/- till December, 2009, Rs.1,500/- till February, 2010 and Rs.2,500/- from February, 2010. He also deposed that he was paying rent at the rate of Rs.6,000/- per month when he gave evidence in the month of October, 2011. In cross-examination, he deposed that since he is running a gas agency business, it is obligatory for him to renew the lease deed from time to time and make available the same to the company, whose agency he is running in the tenanted premises.
As noted, Ext.X6 is a document executed on 05.06.2010. The applications for fixation of fair rent were preferred more or less in the same period. Ext.X6 is in respect of a premises measuring only an area of 81.5 sq.ft. and the rent agreed on 05.06.2010 was Rs.2,900/-. If the rent payable in terms of Ext.X6 is reckoned as the fair rent, the fair rent of the premises will have to be fixed around Rs.7,000/- per month. We do not think that it is appropriate to fix the fair rent of the premises solely based on the rent of the premises covered by Ext.X6. The reason being as noted, the premises covered by Ext.X6 is an addition to the building complex made in the year 2010, that too, based on an arrangement entered into between the Bank and the landlord that if the landlord makes such an addition, the Bank would take the same on lease and would pay rent at the rate of Rs.2900/- per month for a period of three years. It has come out that the Kollengode Branch of the Bank is functioning in the first floor of the same commercial complex and it was, therefore, convenient for the Bank to have its ATM in the same complex itself and when an arrangement has been entered into for construction of a building on that premise, the rent agreed between the parties cannot be said to be a fair rent which a willing tenant would pay to a willing landlord, for in such situations, the parties may not have an equal bargaining power in fixing the terms of the lease. Coming to the evidence tendered by PW7, as noted, he is running a gas agency business in the premises taken on lease. It has come out that PW7 was earlier running the business in partnership with another and when the said partnership was dissolved, he had to enter into a fresh lease arrangement with the landlord. It has also come out that PW7 is obliged to renew the lease periodically and to make available the particulars of the renewed lease deed to the company, whose agency business, he is running in the premises. In the nature of the said arrangement also, we are of the view that the parties may not be having an equal bargaining power in the matter of finalizing the terms of the lease. It is, therefore, not safe to fix the fair rent of the premises based on the rent fixed by the Bank for the premises wherein the ATM is established and based on the rent fixed by PW7 for the premises taken by him for running the gas agency business. At the same time, the rent that was being paid by the tenants in respect of those two premises can certainly be taken note of in the matter of fixing the fair rent in respect of the subject premises inasmuch as those premises are part of the same commercial complexes. In a case of this nature, opinion on the fair rent payable would vary from person to person and from court to court, for opinion on a matter of this nature can only be based on a guess work. Having regard to the totality of the facts and circumstances of the case, we are of the view that the fair rent payable by the tenants to their respective landlords at the time of institution of the applications should have been at least Rs.4,000/- per month. Needless to say, the fixation of the fair rent made by the Rent Control Court, as affirmed by the Appellate Authority was improper and liable to be interfered with and refixed at Rs.4,000/- per month in exercise of the power of this Court under Section 20 of the Act. Point is answered accordingly.
Point (ii) : As rightly pointed out by the learned Senior Counsel for the landlords, in an application for fixation of fair rent, what is adjudicated by the authorities is the fair rent payable as on the date of the application, for if the landlords are not entitled to a revision of rent payable in respect of the premises as on the date of the application, the application would not be maintainable. If it is held that the order fixing the fair rent would be applicable only from the date of the order, the landlords who are entitled to get the rent payable in respect of the premises revised with effect from the date of the application, will be able to get the benefit of the revision only from the date of the order. That apart, if such a view is taken, the landlords may not be able to enjoy a legitimate return on the investment made by them in the building, if the proceedings are delayed due to reasons not attributable to them, especially in a case of the present nature where a proceedings instituted in the year 2010 is not yet over in spite of a lapse of almost 12 years. Needless to say, the finding rendered by the Appellate Authority that the order of the Rent Control Court fixing the fair rent in respect of the premises is operative only from the date of the order, is erroneous. The point is answered accordingly.
In the result, the common order of the Rent Control Court as modified by the Appellate Authority is further modified fixing the fair rent payable in respect of the premises as Rs.4,000/- per month and making the same operative from the date of the applications. The revision petitions are disposed of accordingly.