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Rukmanibai Khimji Cooverji Vs. Shivnarayan Ram Ashre - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberCivil Revision Application No. 1444 of 1960
Judge
Reported in(1965)67BOMLR692
AppellantRukmanibai Khimji Cooverji
RespondentShivnarayan Ram Ashre
Excerpt:
bombay rents, hotel and lodging house rates control act (bom. lvii of 1947), sections 5(10), 11-standard rent in connection with premises first let after september 1, 1940, how to be ascertained-whether open to court to consider circumstance of landlord having acquired land at much smaller price at anterior date than date of first letting.;under the bombay rents, hotel and lodging house rates control act, 1947, in connection with premises first let after september 1, 1940, the standard rent should be ascertained as regards the land involved by determining fair return on the basis of the market value of the land at the time of the first letting. even so, it would he open, to the court to consider the circumstance of the landlord having become owner of the land for a much smaller price at.....k.k. desai, j.1. in these revisional applications and also in several other revisional applications on the file of this court, the question of considerable interest under the provisions of the bombay rents, hotel and lodging house rates control act, 1947 (hereinafter referred to as 'the act'), that has arisen is-whether in connection with premises first let after september 1, 1940, the standard rent should be ascertained as regards the land involved by determining fair return on the basis (i) of the market value of the land at the time of the first letting, or (ii) of the price paid and/or investments made at the time of purchase of the land at anterior date. on behalf of the landlady, petitioner no. 1 in the present revisional applications, it is contended that the basis should be the.....
Judgment:

K.K. Desai, J.

1. In these revisional applications and also in several other revisional applications on the file of this Court, the question of considerable interest under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as 'the Act'), that has arisen is-whether in connection with premises first let after September 1, 1940, the standard rent should be ascertained as regards the land involved by determining fair return on the basis (i) of the market value of the land at the time of the first letting, or (ii) of the price paid and/or investments made at the time of purchase of the land at anterior date. On behalf of the landlady, petitioner No. 1 in the present revisional applications, it is contended that the basis should be the market value of the land at the time of the first letting after September 1, 1940. On behalf of the respondents-tenants, it is contended that the basis must be the price paid and/or investments made for the purchase of the land at anterior date.

2. In these revisional applications, the question has arisen under the following circumstances:-Petitioner No. 1 is the owner of two buildings called Khimji Cooverji Chawls situate at Carter Road, Mulund. The land on which these two buildings were constructed was purchased by the husband of petitioner No. 1, Khimji Cooverji, under a deed of sale dated November 18, 1946. The land consisted of 2000 square yards. 1813 square yards of this land were used up in putting up the total construction of the above two buildings. The rest of the area had to be kept unbuilt upon because of the municipal regulations requiring that certain proportion of the land should be kept open to the sky. Thus, 187 square yards remained unbuilt upon. The first building was constructed and completed in 1949. The second building was constructed and completed in 1951-52. Soon after the completion of construction, the tenements in each building were let out to the tenants. In the first building, there are 18 tenements in all. One tenement is occupied by the owner herself. In the second building, there are J. 7 tenements. Tenements in these buildings are let out to tenants at monthly rents varying between Rs. 29 to Rs. 70 per month. Twelve tenants in each of the buildings commenced proceedings in the Court of Civil Judge, Junior, Division, Tirana, for determination of standard rent of the premises and/or tenements in their occupation. As regards the ascertainment of the fair return on the value of the land on which these buildings were constructed, on behalf of the tenants, the contention before us is that the value should be fixed on the footing of the price paid for the purchase of the land under the deed of sale dated November 18, 1946. On behalf of petitioner No. 1 landlady, the contention before us is that the value of the land in connection with ascertainment of the standard rent ought to be fixed as at the date of the first letting of the tenements in these buildings. In connection with the first building, the construction whereof was completed in 1949, the value should be ascertained on the basis of the market value of the land in 1949. As regards the second building, the value should be ascertained on the basis of the market value thereof on the date of the first letting1 in 1950-51.

3. These rival contentions, were also made before the Civil Judge, Junior Division, in the applications of the tenants. The learned Judge accepted the evidence of Architect Ghanekar tendered on behalf of the landlady that the value of the land in 1949 at the date of the first letting and/or completion of construction of one of the buildings was Rs. 10 per square yard. Having accepted the contentions made on behalf of the landlady, he arrived at the fair return in connection with the value of the land on the basis of Rs. 10 per square yard. In Civil Revision Applications filed before him by the tenants, the District Judge, Thana, accepted the contentions made on behalf of the tenants. In that connection, he referred to the decision in Patel Joitram v. Bheth Anandji Kalyanji Padhi (1958) Civil Revision Application Nos. 1366 to 1372 of 1957, decided by Chagla, C.J. on August 4, 1958. Following the ratio of the judgment of Chagla, C.J. he held that in ascertaining standard rent the value of the land to be considered was the price paid and/or investment made under the deed of sale dated November 18, 1946. He also further held that for the period of the time taken in putting up the above two buildings after the date of the deed of sale, the landlady was entitled to a return of 6 per cent, on the investment. He, therefore, fixed fair return at 6 per cent, on the value of the land, at Rs. 5 per square yard being the price in the deed of sale dated November 18, 1946. He also considered the value of the cost of construction and fixed the usual return of 8.2/3 per cent, on the cost of construction and thus determined the standard rent of the premises.

4. On behalf of the landlady, it is contended with some emphasis that having regard to the provisions in the Act, in the ascertainment of the fair return on the value of the land involved, the basis ought to be the value as at the date of the first letting after September 1, 1940. Reliance is placed in that connection on the provisions in Sections 5(10) and 11 as also Sections 13(7)(hh), 13(7)(i), 13(7)(ii) and 13A and also certain other provisions of the Act. Section 5(10) defines 'standard rent' to mean-

(a)... rent...fixed by the Court and the Controller...; or

(b) where the standard rent is not so fixed-subject to the provisions of Section 11,

(1) the rent at which the premises were let on the first day of September 1940, or

(ii) where they were not let on the first day of September 1940, the rent at which they were last let before that day, or

(iii) where they were first let after the first day of September 1940, the rent at which they were first let, or

(iv) in any of the cases specified in Section 11, the rent fixed by the Court;

The relevant part of Section 11 provides:

11. (i) Subject to the provisions of Section 11A in any of the following cases the Court may,..., fix the standard rent at such amount as, having regard to the provisions of this Act and the circumstances of the case, the Court deems just-

(a) where any premises are first let after the first day of September 1940, and the rent at which they are so let is in the opinion of the Court excessive; or

(b) ...; or

(c) ...; or

(d) where any premises have been or are let rent-free or at a nominal rent or for some consideration in addition to rent; or

(e) where there is any dispute between the landlord and the tenant regarding the amount of standard rent.

(2) ...

(3) ...;

Having- regard to the above provisions in Sections 5(70) and 11, it is not in dispute between the parties that in cases where premises are first let after September 1, 1940, in proceedings for fixation of standard rent, Court should have regard to (i) the provisions of the Act, (ii) the circumstances of the case and (iii) the amount fixed should be just. The main contention on behalf of the tenants is that the provisions of the Act show that 'the Legislature wanted to disallow any increase in value of the lands and/or rents as existing in 1941'. The submission is that the value and/or prices prevalent in 1941 are the standard prices, on the basis whereof, the standard rents are liable to be fixed in. respect of all the properties. According to this submission, in. connection with ascertainment of standard rent, it is not permissible under the Act to consider any unearned increment and/or rise in value of the lands after 1941. This being the policy of the Act, the basis for fair return on the value of lands in determining standard rent must be the value thereof at the date of purchase. The value must be on the footing of investments made at the date of purchase.

5. Reliance has been placed in this connection on the Statement of Objects and Seasons mentioned in the Legislature on the occasion of introduction of the Bill which ultimately became the above Act. Reliance also has been placed on the provisions in Sub-clauses (i) and (U) of Clause (b) in the definition of 'standard rent' in Sub-section (10) of Section 5 of the Act and also on the provisions in the Act preventing ejectment of tenants who pay standard rents regularly and the other provisions fixing the basis of permitted increases in the standard rent. Reliance has also been placed on the observations of Chagla, C.J. in Patel Joitram v. Sheth Anandji Kalyanji Padhi and of J, C. Shah, J, made in Jamaloddin Jainoddin Musalman v. Budhesing Amarsing Rajput(1955) Civil Revision Applications Nos. 1248 and 1249 of 1953, decided by J.C. Shah, J., on August 10, 1955 (Unrep). In the Statement of Objects and Reasons, it is, inter alia, stated:

The latter Act (the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944), which was intended to check an inflationary rise in rents and hotel and lodging house rates in areas in which, owing to war conditions, there was an acute scarcity of accommodation, will lapse in April 1948 unless re-enacted before then. The conditions which led to the enactment of these measures continue in an even more aggravated form and it is, therefore, essential that effective control should be continued until sufficient progress has been made with building operations to provide adequate and suitable accommodation for the largely increased populations of the areas concerned...

Now, it is, therefore, true that the reason why the Act of 1947 was enacted was that in spite of the previous Act of 1944, inflationary rise in rents due to war conditions and acute scarcity of accommodation had continued to exist. In fact, these conditions had become more aggravated in form. The purpose of the Act was to have effective control until sufficient progress had been made with building operations to provide adequate and suitable accommodation. In coming to final decision in this case, we will have, therefore, to bear in mind the above reasons why the Act of 19471 was put on the statute book. It is also true that the provisions in Sub-clauses (i) and (ii) of Clause (i) of the definition of 'standard rent' contained in Section 5(10) of the Act clearly indicate that as regards previously existing buildings and structures and also as regards the land previously let out for residence, education, business, trade or storage purposes, it was provided that the standard rent was the rent that was being charged on September 1, 1940. If on that date the premises were not let, the standard rent was the rent that was charged last before September 1, 1940. Undoubtedly, therefore, as regards the buildings already let and therefore already constructed and existing prior to September 1, 1940, and even lands already let prior to that date, there was clear provision in the Act that the standard rent was ordinarily the rent already previously charged as on September 1, 1940. It is also clear that the Act is made for the purpose of protection of the tenants who were not liable to be ejected if they paid standard rent land observed other terms and conditions of the tenancy. The ordinary right of ejectment was materially affected in the manner provided in Sections 12 and 13 of the Act. It is also true that the basis for permitted increases generally related to actual expenses incurred and/or investments made. In Patel Joitram v. Sheth Anandji Kalyanji Padhi, in connection with the question of standard rent in respect of new structures constructed by the landlord in 1946 on the lands purchased in 1929 Chagla, C.J. observed that

The object of the Legislature in enacting the Rent Act was, apart from giving security of tenure to the tenant, to peg down rents as they were prevailing on the 1st September 1940. The view that the Legislature took was that at relevant date rents were normal, but after that date there was inflation and rents were inflated and landlords started charging excessive and unfair rents.

After making the above observation, the learned Chief Justice observed:

It was also the intention of the Legislature that the landlord should not benefit by any increase in the value of the land brought about by war conditions after 1941.

Now, it is this observation that is questioned before us on behalf of petitioner No, 1, the landlady. The contention that is made is that the above observation is not justified, having1 regard to the relevant provisions in the Act. We propose to discuss this question after noticing the further observations made by the learned Chief Justice in the above Civil Revision Applications and also the observations of J.C. Shah J. in the Civil Revision Applications mentioned above.

6. The ratio of the decision of Chagla, C.J. in the above Civil Revision Applications may be stated as follows:-The lower Court was not justified in fixing the standard rent of the premises on the basis of investment made by the laud-lord in purchasing the lands in 1928. To fix the standard rent on that basis would not be fair and just, because the value of the land had, gone up, the value of rupee had gone down, the cost of living had gone up and the intention of the Legislature was not to deprive the landlord of the capital appreciation of his land between 1929 and 1941. The learned Chief Justice, however, found that the value of the land should be fixed on the basis of the market value thereof in 1941, after which date, the Legislature intended to disallow increase in value. As regards the 5 years' period between 1941 and 1946, when the landlord put up the new construction, the Court found that for the locked up capital, (i.e. the value of the land as in 1941), the landlord should be entitled to a fair return, i.e. interest at 6 per cent, per annum. In this very connection, it was observed that in fixing the standard rent, even after arriving at the value of the land on the basis of market value in 1941, the Court was bound to consider 'the rents charged to and paid by the tenants in a very neighbouring locality as one important circumstance. In fact, the learned Chief Justice refused to interfere with the findings made by the lower Court because he found that the standard rent that was fixed by the lower Court could not be described as excessive.

7. In Jamaloddin Jainoddin v. Budhesing Amarsing, J.C. Shah J. observed:

Now the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, was passed by the Legislature with a view to peg down rents at the pre-war rates and with a view to prevent landlords from profiteering. The Act having been passed to prevent increase of rent above the pre-war level in respect of properties which were let out before the 2nd World War, it is implicit in the provisions of the Act that the landlord is not entitled to return on the unearned increment in the value of his property. He cannot, therefore, claim an economic return on the present market value of his property.

The learned Judge also referred to the previous decision of this Court in the case of Saipansaheb Dawoodsaheb v. Laxman (1955) 57 Bom. L.R. In that case, this Court decided that 'in fixing the standard rent the correct approach should be, what is the net return which a landlord should be reasonably allowed on his investment'. Having regard to that decision, the learned Judge found that in ascertaining the amount of the standard rent, the 'important test to determine what must be regarded as 'just' is what reasonable return to the landlord on his investment may be.'

8. Relying on the observations in the above Civil Revision Applications, on behalf of the tenants, it is contended that the result of the provisions in the Act is that in connection with ascertainment of standard rent, the value of the land on which building construction has been put up at a later date must be ascertained on the footing of its market value in 1941. They, however, concede that in connection with lands purchased subsequently, the basis should be the investment price paid by the purchaser at the date of completion of sale. The contention is that the reasons for this are more specifically those which are mentioned in the above two judgments, i.e. in the observations which we have already referred to.

9. In connection with the above submission, it is to be borne in mind that in his judgment J.C. Shah J. has observed that 'the landlord is not entitled to-return on the unearned increment in the value of his property', and restricted the same by using the following phrase, viz., 'The Act having been passed to-prevent increase of rent above the pre-war level in Respect of properties which were let out before the 2nd World War' (the italics are ours). The learned Judge was, it may be stated, conscious of the fact that the Legislature had not made any provision to the effect that the landlord was not entitled to return on the unearned increment in the value of his property in connection with properties that were let out for the first time after September 1, 1940. 'We would be justified also in observing that the learned Judge was conscious that as regards the properties which were let out for the first time after September 1, 1940, the Act had not provided that the landlord should not benefit by increase in the value after September 1, 1940, or 1941. Though Chagla, C.J. observed that the intention of the Legislature was that the landlord should not benefit by any increase in the value of the land brought about by war conditions after 1941, in those very Civil Revision Applications, in connection with lands purchased subsequent to 1941, the learned Chief Justice recited that his. attention had been drawn to various decisions of this Court and that in all those cases this Court had laid down that the Court must allow the landlord a fair return on the actual price that he paid for the lands.

10. It is to be noticed that in those cases, obviously, the lands were purchased much subsequent to September 1, 1940. The price paid and/or investment made were not on the basis of the market value of the land as on September 1, 1940, or in 1941. The purchasers and/or the investors had paid prices which were market values and higher prices at the dates of purchases subsequent to-September 1, 1940. The market values had no relation whatsoever with the prices prevalent in 1940-41. Even so, this Court had decided that in arriving at standard rent in connection with the constructions put up on these subsequently purchased lands, the values of the lands, must be ascertained not on the footing of the values prevailing in 1940-41, but the prices paid and/or factual investments made. The learned Chief Justice himself on the day next to the date of decision in Patel Joitram v. Sheth Anandji Kalymji Padhi i.e. on August 5, 1958, dealt with Vejbai Khetsee v. Dr. Sushilabai Vasantrao Bagwe (1958) Civil Revision Application No. 1376 of 1957, decided by Chagla, C.J., on August 5, 1958 (Unrep.). In those applications the land was purchased in 1944, three years after the relevant date mentioned in connection with standard rent in Section 5(70) of the Act. The construction was put up in 1951. In arriving at the standard rent of the premises, the lower Court had fixed the return on the land on the basis of value thereof in 1951. On behalf of the tenants, it was contended before the learned Chief Justice that the lower Court ought to have fixed the standard rent on the basis of the value of the land as prevalent in any event in 1944, if not in 1941. The learned Chief Justice did not accept the contention and refused to interfere with the decision of the lower Court, Similarly, in disposing of Bhagwandas Lilaram v. Dadanbhai Vishindas (1958) Civil Revision Application Nos. 811 and 812 of 1957, decided by Chagla, C.J. on July 2, 1958 (Unrep.), the learned Chief Justice refused to interfere when the standard rent of the premises had been fixed by the lower Court on the basis of price paid by the purchaser in 1947. It is, therefore, clear that the learned Chief Justice himself had and this Court also had throughout accepted the principle that as regards lands purchased by third parties after September 1, 1940, the market values of the lands as prevailing- in 1940-41 was not the true basis for determination of fair return thereon and that the prices paid and/or investments made in purchasing the lands subsequent to September 1, 1940, was the basis on the footing1 whereof the landlord should be entitled to fair and appropriate return. Undoubtedly, the view expressed by the learned Chief Justice in Patel Joitram v. Sheth Anandji Kalyanji Padhi are emphatic and clear. The views are of, if one may use the expression, 'strong Bench' and are entitled to the highest respect. Even so, it is clear that the learned Chief Justice himself and this Court has not accepted the principle that 'the intention of the Legislature was that the landlord should not benefit by any increase in the value of the land brought about by war conditions after 1941' and the same has not been applied to transactions where the lands were purchased subsequent to September 1, 1940. This exception recognised throughout by this Court appears to us to prove that the general view of this Court has not been that ordinarily the landlord was not entitled to benefit of increase in the value of the land brought about by war conditions after 1941. To follow up the observations of J.C. Shah J. in the Civil Revision Applications mentioned above, it is true that in connection with properties already let out (being1 the properties other than those which are first let out after September 1, 1940), the Legislature intended that the landlord should not benefit by any increase in the value of the land brought about by war conditions after 1941. As regards the properties, which are first let out after September 1, 1940, there is nothing in the Act to suggest that the Legislature intended that the landlord should not benefit by increase in the value of the land brought about by war conditions after 1941.

11. This is clear having regard to the provisions in Sub-clause (iii) of Clause (b) of Sub-clause (10) of Section 5 defining 'standard rent' and also provisions in Section 11 of the Act. On a reading of these provisions, it is clear that in connection with premises first let after September 1, 1940, the contractual and/or agreed rent was provided to be standard rent except in cases where the Court considering the question .could come to the conclusion that the agreed and/or contractual rent was excessive. The clear effect of these provisions is that the Court would not be justified in holding that the agreed and/or contractual rent is not the standard rent unless and until it was in a position to make a finding that the rent was excessive. This has been accepted as true position in all the decisions of this Court. Reference may in this connection be made to the reported case of Harilal v. Jain Co-op. Housing Soc. : AIR1957Bom207 .

12. The question that arises is as to whether in determining that the agreed ;and/or contractual rent is not excessive, it is not right to hold that fair return an the value of the land should be ascertained on the basis of the market value thereof at the date of the first letting. As we have already stated, the question of importance is as to whether the rent charged is excessive. Having regard to the contents of Section 11 of the Act, this question is liable to be decided by considering three circumstances, viz. (i) the provisions of the Act, (ii) the circumstances of the case itself and (iii) fair and/or just character of the amount involved. It is to be borne in mind that ordinarily the market value of land is roughly the price which an owner willing and not obliged to sell might expect from a willing purchaser. Ordinarily, the value is ascertained on the basis of capitalisation of the net annual income. Ordinarily, the return on investments ought to be determined as at the date of the yield (of the income). This normal method is adopted in all markets and is generally evident in share market. Market values of properties are thus fixed in relation to the produce and/or the income thereof at the relevant date. This ordinary basis of arriving at the true market value is rational and can satisfy objective tests. This has been accepted as the true basis in land acquisition proceedings under the Land Acquisition Act. This is the basis for taxing purposes in respect of all properties in all taxing statutes. If this is not adopted in arriving at market values of properties and any other basis is adopted, the same would exhibit anomalies and result in discrimination between different parties. In this connection, one may refer to the decision of the Supreme Court in the case of The State of West Bengal v. Bela Banerjee : [1954]1SCR558 . In considering the validity of the provisions of the West Bengal Land Development and Planning Act, 1948, the question before the Court related to the provisions in the Act that as regards the acquisitions made, the market value at the anterior date, i.e. December 31, 1946, was to be the value for compensation. The Court observed in this connection as follows (pp. 564-65) :.but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary.... Any principle for determining compensation which denies to the owner this increment in value cannot result in the ascertainment of the true equivalent of the land appropriated.

Applying these observations, in connection with the question of ascertainment of fair return to the landlord as regards the value of the land involved, it would be right to hold that the return ought to be fixed on the basis of the market value of the land at the date of the first letting. The value fixed on any other basis would, as observed by the Supreme Court, be arbitrary. The same would not be satisfying any objective tests and would involve unfair discrimination against the landlord. This can be made evident by illustrations. One may consider the case of lands which have gone up in value tremendously after the fall in the value of the rupee and because of industrialisation taking place in suburbs of Bombay. The small land owners in these suburbs have been for some time past selling their properties at largely increased values. Suppose that a small land-holder owning since 1920-1925 10,000 square yards of land at the suburb of Mulund or Bhandup sells in 1958-59 one-half of his land, i.e. 5,000 square yards of the land, to a big industrialist for the price of about Rs. 60 to Rs. 70 per square yard and constructs on 5,000 square yards of land left with himself a building1 similar in all respects to a building constructed by the purchaser industrialist on the other 5,000 square yards of land. Both the buildings may be taken as completed in 1960. Having regard to what has already been held by this Court in connection with the rents charged by the industrialist purchaser, the fair return as regards the land involved would be arrived at on the basis of his investments made for the purchase of the land in 1959. In other words, the fair return would be fixed on the basis of the price of Rs. 60 per square yard. Let us take it that the rent fixed for a flat on the newly built structure by the industrialist purchaser is fixed at Rs. 400 per month. The question is whether in connection with exactly similar flat in the building constructed by the small land-holder seller who retains the 5000 square yards with himself, the standard rent should be fixed on the basis of the value of his land prevailing in 1941 as stated by Chagla, C.J. in the above Civil Revision Applications. On that basis, one may imagine that the rent per month would come to about Rs. 150. The question is whether there is any provision in the Act to justify this huge difference in the amount of the standard rent in connection with two similar adjacent properties constructed on the lands which were originally owned by the small holder-seller. We have asked counsel for the tenants to point out any provisions from the Act which would justify such indiscriminate determination of standard rent between two such properties. We have also ourselves attempted to find out such provisions in the Act. The counsel have not been able to show us any such provision, nor have we been able to find any such provision. Having regard to the observations made by Chagla C.J. in the above Civil Revision Applications, we have considered this question with some anxiety. We have, under the circumstances mentioned above, come to the conclusion that there is nothing in the Act to warrant a finding that as regards premises first let after September 1, 1940, the Legislature intended that the landlord should not benefit by any increase in the value of the land brought about by war conditions after 1941 and/or brought about by other prevalent conditions in thickly populated cities like Bombay. It has appeared to us that the basis for arriving at fair return to the landlord in respect of the value of his land must be a rational basis which could satisfy objective tests. The rational basis is the normal basis mentioned by us above, i.e. the return on investment ought to be determined at the date of the yield (of the income). This is the basis for which support can be had from the provisions in the Land Acquisition Act and the observations of the Supreme Court referred to above.

13. In this connection, it is also relevant to observe that there is no provision in the Act which affects the general right of land owners to sell their lands. An owner would be always entitled to sell off his lands and also buildings constructed after September 1, 1940, but not let out at all. A purchaser of such newly constructed building would, having regard to the decisions of this Court, be-entitled to have the value of the land fixed on the basis of the investment made by him. This value will be almost the value at the date of the first letting. It is difficult to understand why the original landlord (who does not want to sell his land and property) should not be entitled to charge the same amount as standard rent, as the new purchaser should be otherwise entitled to charge. This discussion also shows that by accepting the contention made on behalf of the tenants, ordinarily, no benefit at all can be gained by tenants. The imaginary, benefit can always be defeated by sales of properties and/or exchange of properties. By accepting the contentions made on behalf of the tenants, this Court would lay down a principle which has no rational basis at all. It is not the function of this Court to arrive at constructions for the benefit of tenants when the provisions in the Act do not warrant the same. If the Legislature in fact desired that 'the landlord should, not benefit by any increase in the value of the land' after 1940-41, the Legislature could have directly provided for the same. In fact, when the Legislature provided in Sub-clause (iii) of Clause (6) of Section 5(10) that the standard rent in respect of the premises first let after September 1, 1940, would be the rent at which they were first let, it exhibited an intention that the landlord was entitled to the benefit of increase in the value of the land which arose subsequent to 1940-41. This was made more clear by providing in Section 11 of the Act that in determining the amount of standard rent the Court was entitled not only to consider the-provisions of the Act but also the circumstances of the case and the just and fair character of the amount fixed. The basis of the amount of the standard rent in respect of equally situate and similar properties first let after September 1, 1940, cannot, in our view, be different in the case of the same property, because it is sold subsequent to 1940 by the original landlord. The amount of the standard rent in respect of properties similar in all respects, whether they are sold or not sold, ought to be the same. We have come to the above conclusion after noticing that as regards the properties already first let before September 1, 1940, the Legislature has impliedly provided that the landlord should not be entitled to unearned increment in the value of the land.

14. It is necessary to point out that reliance has been placed on behalf of petitioner No. 1 landlady on the provisions in Sections 13(1)(hh), 13(1)(i), 13(1)(ii), Sub-section (3A) of Section 13 and Section 13A of the Act. These provisions go to show that tenants are liable to be ejected from old buildings of certain kinds in cases where the landlord intends to put up new constructions. The Act provides for sufficient protection to the ejected tenants for being housed in the new construction. It is contended on behalf of the landlady that these provisions show that one of the objects of the Act is to encourage building constructions. This is one circumstance liable to be considered in connection with the question which we have just decided

15. It remains to be pointed out that the definition of the word 'premises' as contained in Sub-section (S) of Section 5 includes open land not used for agricultural purposes. It is clear that the provisions of the Act apply to open lands which are let for residence, education, business, trade and storage purposes. In connection with such lands when they are let out prior to September 1, 1940, the amount of standard rent would be the rent at which they were let out on September 1, 1940, or, when they were not let on that day the rent at which they were last let before that day. It would be open, Moving regard to the provisions in Section 11 of the Act, both for the landlord and the tenant to contend that the agreed and/or contractual rent was not the standard rent. The Court would then have to determine the standard rent in respect of such lands. The principles discussed by us above would be applicable to applications made for fixing standard rent of such lands let out subsequent to September 1, 1940. The return to the landlord will have to be fixed on the basis of market value of such lands as at the date of first letting.

16. Now, in connection with all that is discussed above, it is necessary to make clear that before fixing the amount of standard rent, the Court is bound to consider all the circumstances of the case. The market value of the land as at the date of first letting after September 1, 1940, is only one prominent circumstance. Even so, it would be open to the Court to consider the circumstance of the landlord having become owner of the land for a much smaller price at anterior date than the date of first letting. It would be open to the Court to consider as to how the amount of standard rent should be affected because of that circumstance. In coming to the conclusion whether the amount of the agreed and/or contractual rent is excessive or not, the Court is not prevented from considering all the relevant circumstances including the circumstance mentioned above.

17. We have been told by counsel for the petitioners and the respondents that these revisional applications have been put up before us because certain difficulties had arisen due to previous decisions of this Court in connection with the question which we have just decided. It was otherwise unnecessary that these revisional applications should be put up before a Division Bench. Ordinarily and normally, all the revisional applications under the above Act are liable to be disposed of by a single Judge of this Court. Advocates of both sides have requested that now these revisional applications may be allowed to be placed before a single Judge of this Court for final disposal. These revisional applications will accordingly be put up before a single Judge of this Court, The costs will be ultimately decided by the learned Judge who will decide these revisional applications.


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