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Shri F.P. Gracie Vs. Shri Vithal Ganpat More - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 621 of 1972
Judge
Reported in(1978)80BOMLR169
AppellantShri F.P. Gracie
RespondentShri Vithal Ganpat More
DispositionAppeal allowed
Excerpt:
.....116--when can an appellate court interfere with fixation of standard rent by the trial court.;the trial judge rejected an application made by the tenant for fixation of standard rent of the suit premises on the ground that the tenant had failed to prove that the monthly rent of rs. 83 plus rs. 2 for supply of water and electricity was excessive. the trial judge had taken into consideration the report of valuation given by an engineer-contractor submitted on behalf of the landlord and had rejected the evidence of valuation given by the tenant's witness.;on a revision application filed by the tenant, the lower appellate court set aside the order of the trial judge and fixed the standard rent at rs. 67 per month, stating that the actual cost of construction could not have been more than..........purchased it for rs. 8,500/- in the year 1961. the area of the premises is 380 sq. ft. the learned trial judge has calculated the value of 380 sq. ft. at rs. 342/-, the courts have laid down that the landlord should be allowed a return of 8-2/3 p.c. p.a. on the cost of the building and 6 p.c. p.a. on the value of the land. the learned trial judge has also allowed that much percentage of return on the cost of the building and value of the land. applying this rule the amount of fair return or yield would be rs. 800/- yearly which comes to rs. 66-66 per month. it can be roughly taken as rs. 67/-. this would be the fair or reasonable rent of the premises.9. the said decision of the learned extra assistant judge, is challenged in the above special civil application, by the landlord, under.....
Judgment:

Vaidya, J.

1. The petitioner in the above Special Civil Application, let out to the opponent, three rooms at the rear site of a bungalow situated at 46-C Oudh Road, Kirkee, Poona-3, on May 1, 1964, on a monthly rent of Rs. 83 and Rs. 2 for supply of water and electricity. Each of the rooms was 10 12 feet.

2. The opponent filed Miscellaneous Application No. 543 of 1966 under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, for fixation of standard rent alleging that the premises were merely an extension of the main building which is situate at a place which is far away from the busy locality and most inconvenient for shopping and therefore the rent for Rs. 83 per month which the landlord was charging 'was unreasonable, excessive and exorbitant and deserves to be settled by the Court'.

3. The application was resisted by the landlord-petitioner contending that the agreed rent of Rs. 83 per month for the premises and Rs. 2 for water charges was quite reasonable and proper, as he had spent about Rs. 9,000 over the construction of the suit premises and had purchased of 9,500 square feet for Rs. 8,500.

4. It is not necessary to refer to the earlier proceedings in the Court in which the matter was remanded because the earlier commissioner happened to be an advocate and not an architect or an engineer. It is enough to say that, after the remand order was passed, by the district Court, on September 14, 1969, the question of valuation of the premises in dispute was referred to an engineer-contractor, one Section Rule Ambekar, whose report is at exh. 32, on the record and is dated March 17, 1970; and which shows that the whole estimate for three rooms and w.c. and sink was Rs. 10,840 and further that the construction was made under his supervision.

5. On behalf of the tenant, one Abdul Gaffar Khan was examined as a witness and according to his report and version the construction of the building cost Rs. 5,528.35, but the learned Judge, found that the witness did not possess any engineering diploma; he had no knowledge of the rates prevailing in the year 1963, and about the year in which the building was constructed; and he could not also say whether the measurements given by Ambekar in his report which was put to Khan was correct.

6. The learned III Additional Judge, Small Causes Court, Poona, by his judgment and order, dated October 24, 1970, accepted the report of the commissioner, though the commissioner Ambekar was not examined as a witness; and rejected the report of Khan observing as follows:

He seems to have acted in making his report on the information supplied by the applicant. He did not take any trial pit. He did not know the depth of the foundation. He did not see whether there is mistake in report of the Commissioner Shri Ambekar. Only because the applicant was told that the old material was used for the building construction, he made his report on that basis. It appears that the applicant and the witness come from the same village and naturally he has given a report to favour the applicant's version. He has not cared to ascertain even small points. At the end of the deposition he says that because the applicant says he gets bad smell, in the building, he stated so in his report, even though he did not experience the bad smell himself. As suggested on behalf of the opponent it is clear that the witness made a report favourable to the applicant's say since he happens to be on friendly terms of the applicant. I am not inclined to believe the witness and his report.

The learned Judge, believed the report of the commissioner Ambekar observing as follows:

On the contrary the report of Shri Ambekar who himself supervised the construction work states in his report that Rs. 10,840/- were spent for construction of the suit building. The evidence of opponent indicates that the block in the same building of smaller size was leased to one Dr. Ramgopal and he paid the opponent Rs. 80/- as rent. The applicant avoids to give the size of the block of Shri Ramgopal. I am inclined to believe the version of opponent that Dr. Ramgopal paid Rs. 80/- to the opponent as rent of block of smaller size.

The learned Judge, further pointed out that Shri Ambekar did not give the value of the plot on which the building stands.

7. He, therefore calculated the value of 9 gunthas on which the suit premises stood at Rs. 342 and applying the Rule of 8.2/3rd per cent, on costs of building and 6 per cent, on cost of plot he came to the conclusion that the tenant failed to prove that the rent of Rs. 83 was excessive and rejected the application filed by the opponent by his judgment and order mentioned above.

8. The tenant filed an application which was numbered as Civil Revision Application No. 18 of 1971, against the decision of the Judge in the Small Causes Court; and the III Extra Assistant Judge, Poona, who heard the said revision application, by his order dated November 19, 1971, purportedly exercised the powers under Section 29(3), set aside the order of the trial Court and fixed the-standard rent at Rs. 67 per month stating as follows:

Thus, the actual cost of construction could not be more than Rs. 9,000/- as stated by the landlord himself and that amount will have to be taken into consideration in determining the fair rent. According to the landlord, the entire plot measures 9 gunthas and he purchased it for Rs. 8,500/- in the year 1961. The area of the premises is 380 sq. ft. The learned trial Judge has calculated the value of 380 sq. ft. at Rs. 342/-, The courts have laid down that the landlord should be allowed a return of 8-2/3 p.c. p.a. on the Cost of the building and 6 p.c. p.a. on the value of the land. The learned trial Judge has also allowed that much percentage of return on the cost of the building and value of the land. Applying this rule the amount of fair return or yield would be Rs. 800/- yearly which comes to Rs. 66-66 per month. It can be roughly taken as Rs. 67/-. This would be the fair or reasonable rent of the premises.

9. The said decision of the learned Extra Assistant Judge, is challenged in the above Special Civil Application, by the landlord, under Article 227 of the Constitution of India.

10. Mr. Thorat, the learned Counsel appearing for the landlord, submitted that the findings recorded by the trial Court in this case in exercise of the powers under Section 11(1)(a) were findings based on appreciation of oral evidence; and the commissioner's report in accordance with law; and, therefore, the learned Extra Assistant Judge, acted without jurisdiction in interfering with the said findings.

11. This contention deserves to be upheld because Section 29(3) runs as follows:

Where no appeal lies under this section from a decree or order in any suit or proceeding in Greater Bombay the bench of two judges specified in Clause (a) of Sub-section (1) and elsewhere the District Court, may for the purpose of satisfying itself that the decree or order made was according to law, call for the case in which each decree or order was made and the bench or Court aforesaid or the District Judge as any Judge to whom the case may be referred by the District Judge, shall pass such order with respect thereto as it or he thinks fit.

12. Mr. Thorat rightly pointed out that under Section 31 of the Indian Evidence Act, an admission made by a party or witness is not conclusive proof of the matter admitted, but may operate as estoppel under Section 115 or 116; and therefore the learned Judge after hearing the parties had referred the matter to the commissioner. He relied on a decision of the Privy Council in Chandan Mull Indra Kumar v. Chimanlal Girdhardas Parekh (1939) 42 Bom. L.R. 387, and contended that commissioners's report exh. 38, was rightly considered by the trial Court; and wrongly ignored by the appeal Court, on the basis of the so-called admission of the petitioner-landlord dealing with the commissioner's report. It is stated in the head note to that case as follows:

In dealing with a commissioner's report, a Court should not interfere with the result of a long and careful local investigation by the commissioner except upon clearly denned and sufficient grounds. It is not safe for a Court to act as an expert and to overrule the elaborate report of the commissioner whose integrity and carefulness are unquestioned, whose careful and laborious execution of his task is proved by his report, and who has not blindly adopted the assertions of either party.

I do not think that it is necessary to refer to those facts. Here the only thing that has been done by the learned Extra Assistant Judge is to ignore the commissioner's report. He relied merely on the admission of the landlord that he had spent Rs. 9,000.

13. The question is whether the learned Assistant Judge, was justified in doing so having regard to the limits of the powers under Section 29(3) and the powers conferred on the Court under Section 11(1)(a), which runs as follows:

Subject to the provisions of Section 11A in any of the following cases the Court may, upon an application made to it for that purpose, or in any suit or proceedings, 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;

It is well settled that under Section 11(1)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the intervention of the Court in cases of letting after September 1, 1940, with contractual rent, can only be where the rent is not only not reasonable, but exceeds by some substantial margin what is reasonable, so that it may be termed to be excessive. There is always a gap between what is reasonable and what is excessive, and what is excessive does not begin where what is reasonable necessarily ends. If the rent is within this gap between what is excessive and what is reasonable, the Court has no jurisdiction to fix a just rent in such a case. See Harilal v. Jain Co-op. Housing Soc. : AIR1957Bom207 .

14. Mr. Thorat contended that in the present case, the question as to whether the landlord's admission should be taken into consideration as against the estimate made by Ambekar, was a question of appreciation of evidence. A decision on such a question cannot be a decision not in accordance with law within the meaning of Section 29(3). He further argued that in the circumstances in which the landlord admitted that he had spent Rs. 9,000 for the suit premises, the calculation made by the learned Assistant Judge shows that Rs. 83 was not reasonable in the context of the admission; but it could not be said to be excessive, particularly having regard to the report made by Ambekar.

15. Mr. Wagh, the learned Counsel appearing for the tenant, on the other hand submitted that the jurisdiction under Section 29(3) was rightly exercised by the learned Assistant Judge, as, the trial Judge had ignored the admission of the landlord himself that he had spent Rs. 9,000. In support of his argument he relied on the aforesaid decision in Harilal's case, where Tendolkar J. refused to exercise the jurisdiction of this Court under Section 115 where the rent was not proved to be excessive even assuming that it was excessive; and the decision of the Supreme Court in Nagindas v. Dalpatram : AIR1957Bom207 , where in para. 26, the Supreme Court has observed that there was some material before the Court, on the basis of which the Court could be prima facie satisfied about the existence of a statutory ground for eviction and it will be presumed that the Court was so satisfied and the decree for eviction was apparently passed on the basis of a compromise, would be valid. It was further observed:

The admissions admissible under Section 58 of the Evidence Act, made by the parties or their agents at or before the hearing of the case, stand on a higher footing than evidentiary admissions. The former class of admissions are fully binding on the party that makes them and constitute a waiver of proof. They by themselves can be made the foundation of the rights of the parties. On the other hand, evidentiary admissions which are receivable at the trial as evidence, are by themselves, not conclusive. They can be shown to be wrong.

16. In the present case the admission which is relied upon by Mr. Wagh is the admission made in the written-statement and in the cross-examination of the landlord. He stated that he had spent Rs. 9,000. The case of the tenant was that his expert Khan, had estimated the cost of construction at less than Rs. 6,000. In these circumstances, the Court had referred the matter to the commissioner. The commissioner Ambekar was not examined in Court but no objections appeared to have been filed by the tenant insisting on the cross-examination of the commissioner. The tenant on the other hand relied on the evidence of his own expert who was rightly disbelieved by the trial Court. In these circumstances, I do not see how the passage in the Supreme Court can help the tenant. On the contrary it helps the landlord.

17. Moreover, as already stated above, under Section 31 of the Evidence Act, admission is never conclusive proof as observed by the Supreme Court also. The matter was one of appreciation of oral and documentary evidence before the trial Court. It is well settled that in matters of appreciation of evidence even a Court of appeal cannot interfere with the findings recorded by the trial Court, who had advantage of seeing and hearing the witnesses.

18. It has been repeatedly laid down by the Privy Council and the Supreme Court that it is open to an appellate Court to differ from the Court which heard the evidence where it is manifest that the evidence accepted by such Court of first instance is contradictory or is so improbable as to be unbelievable or is for other sufficient reasons unworthy of acceptance. But such grounds must exist, if a conclusion as to credibility, opposed to that of the Judge who had. the great advantage of seeing and hearing the witnesses is to be justified. (See Sarkar on Evidence, twelfth edn., 1971, pp. 52-5.3). If a Court of appeal could not interfere with the appreciation of the evidence certainly the learned Extra Assistant Judge, who was exercising the limited power under Section 29(3) could not interfere with the findings recorded by the trial Judge in this case.

19. Mr. Wagh, contended that as the learned trial Judge, ignored the admission made by the landlord it was open to the Assistant Judge, to interfere with the findings recorded by the trial Judge. In view of what is stated in the Privy Council decision referred to above, the trial Judge has rightly ignored the admission, if at all it can be called an admission of the landlord; when it is an admission subject to his contention that the rent which was agreed was standard rent and reasonable rent and was not excessive rent.

20. The parties had referred the matter to the commissioner. The defendant relied on his expert. In these circumstances having regard to the principle enunciated by the Privy Council in the above case it cannot be said that in ignoring that so called admission of the landlord, the trial Judge had not acted contrary to law or not according to law within the meaning of Section 29(3). In my opinion, what importance is to be given to an admission is also a matter of appreciation of evidence. It was wrong on the part of the learned Assistant Judge to have exercised the power under Section 29(3) on the ground that the trial Judge had ignored the admission made by the landlord in the facts and circumstances of the case.

21. The argument of Mr. Wagh, that as Tendolkar J. refused to exercise his re-visional powers with the order passed in an application under Section 11 in the aforesaid Harilal's case, it is also not proper for this Court to exercise the power under Article 227 of the Constitution of India, with a decision of the learned Assistant Judge, which is final and conclusive between the parties under the provisions of the Bombay Rent Act cannot be accepted. Mr. Wagh, submitted that the premises really consisted of an out-house far away from the busy locality; and in these circumstances, the admission made by the landlord that he had spent only Rs. 9,000 was quite reasonable; and therefore it cannot be said that the learned Assistant Judge, was wrong in interfering with the patently erroneous findings recorded by the trial Judge. He also referred to the decision of the Supreme Court in Babhutmal v. Laxmibai : AIR1975SC1297 in this connection. But as already stated above, the learned Assistant Judge had no jurisdiction even as the Court of appeal to interfere with the findings recorded by the trial Judge on appreciation of the evidence.

22. The learned trial Judge had appreciated the evidence in accordance with law. When the decision of the learned trial Judge was in accordance with law, the learned Assistant Judge has no jurisdiction, merely because it was unreasonable to ignore the admission of the landlord. For the reasons already stated, the learned trial Judge acted according to law in ignoring the admission of the landlord which is not conclusive. It may be that, as the landlord constructed the entire structure including the suit premises, he was not in a position to appraise properly the cost of construction which the engineer could do in his report.

23. Whatever may be the reason, it can never be said that merely because the trial Court ignored the admission of the landlord, the trial Court acted contrary to law and not according to law, particularly in view of the law as laid down by the Privy Council when dealing with the commissioner's report.

24. The jurisdiction of the learned Assistant Judge, was limited under Section 29(3) to interfere only when the decision of the trial Court was not according to law.

25. Unless he was satisfied that it was not according to law, he had no jurisdiction to interfere. It must be, therefore, held that in interfering with the findings, the learned Assistant Judge usurped the jurisdiction which he did not have under Section 29(3). in these circumstances, Babhutmal's case cannot stand in the way of this Court under Article 227 of the Constitution of India in setting aside the order passed by the learned Assistant Judge without jurisdiction.

26. The petition, therefore, succeeds. The judgment and order passed by the Assistant Judge, on November 19, 1971, are set aside; and the judgment and order passed by the III Additional Judge, Small Causes Court, Poona, on October 24, 1970 are restored. In all the circumstances of the case and particularly having regard to the evidence that both the petitioner and respondent are pensioners I direct that the parties should bear their own costs throughout. The rule is made absolute.


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