1. This is a rule directed against an order of District Judge, Dulat, whereby he set aside the order of the Rent Controller and held that the Rent Controller had no power to reduce the rent which had already been fixed.
2. On the 28th of May 1947, Padam Chand and Sons, Delhi, who will hereinafter be termed the landlords, took on lease from the Notified Area Committee some land which is situate along the Esplanade Road, Delhi, and along the Chandni Chowk. The lease was for two years and was to take effect as from the 10th of April 1947. On this land shops were to be built in accordance with the plan which had been sanctioned by the Notified Area Committee. The lease-money payable by Padam Chand and Sons was Rs. 859/11/-, per mensem and on expiry of the lease the lessees were to return the land in the condition in which it had been taken. In other words, they had to remove their superstructures. 45 stalls were built by Padam Chand and Sons between April and May 1947. It is stated that about Rs. 20,000/- werespent on their construction. In June 1947 different persons took these stalls on lease at Rs. 100/- per mensem.
3. Sometime in December 1947, the tenants had the matter referred to the Rent Controller for the fixation of rent under Section 7-A of the Delhi and Ajmer-Merwara Rent Control Act, hereinafter termed the Act. On the 3rd of November 1948 the Rent Controller made an order fixing the rent of the different shops as follows :
Of 19 shops or stalls which were on the Esplanade Road .. Rs. 34/6/- per mensem per shop.Of 12 shops which were in the Chandni Chowk .. Rs. 31/7/- per mensem per shop.Of 14 shops which were at the back : Rs. 18/8/-per mensem per shop.At the end of his order the Rent Controller said as follows : 'If the life of the shops is extended beyond twoyears, this order will be revised.'
The landlords Padam Chand & Sons took an appeal to the District Judge under Section 11 of Schedule Fourth of the Act. The learned Judge after taking all the circumstances into consideration by an order dated the 9th of February 1949 increased the rent of each shop as follows:
Of the shops on the Esplanade Boad and theChandni Chowk..... .Rs. 60/- per mensem.Of the 14 shops at the back..... .Rs. 30/- permensem.The learned Judge in coming to this conclusion took into consideration the fact that the lease in favour of the landlords was for two years.
4. The tenants again approached the Rent Controller as the term of lease in favour of Padam Chand and Sons had been extended by another two years and by an order dated the 27th of November 1950 he fixed the rent of each shop as follows:
Of the shops on the Esplanade Boad and theChandni Chowk.... Rs. 36/5/- per mensem.Of the 14 shops at the back... ...Rs. 18/3 permensem, and at the end of it he again wrote 'if the lease is further extended beyond 9th April1951, the rent is likely to be reviewed.'
The landlords again went up in appeal to the District Judge who has held that the Bent Controller had no power to vary the rent which had already been fixed nor could he redetermine the same except as provided in para. 6 of the Fourth Schedule of the Act. He, therefore, allowed the appeal and set aside the order of the Rent Controller reducing the rent. It is against this order that the tenants have come up in appeal to this Court and my learned brother Harnam Singh, J., issued the rule on the 13th June 1951.
5. By way of preliminary objection Mr. Grover has submitted that no revision lies against the order of the District Judge. He submits that the determination of standard rent under Section 7-A of the Act is contained in the Fourth Schedule para. 11 of which provides for an appeal within thirty days from the order of the Rent Controller to the District Judge, Delhi. The provision for revision is contained in the Delhi Bent Control (Procedure) Rules, 1947, which is Appendix 'A' of the Act. In these Rules 'Act' means the Delhi and Ajmer-Merwara Rent Control Act (Act No. XIX of 1947). According to rule 3 of this Appendix all Civil Courts in the Province of Delhi have power to hear and decide original cases......under the Act to theextent of their pecuniary jurisdiction. Then there is a proviso which is not necessary for the purposes of this case. According to Rule 4 of the Appendix a party to an original case shall have a right of appeal to the Court of theSenior Subordinate Judge, to the Court of the District Judge or to the High Court depending upon the pecuniary value of the suit. In Rule 6 it is provided :
'6. (i) The High Court for the purposes of satisfying itself that a decision made in any case under the Act was according to law, may call for the case and pass such orders with respect thereto as it thinks fit.(ii) A party shall have a right of review in accordance with the provisions of Code of Civil Procedure, 1908.'
The argument submitted by Mr. Grover is that in Rule 3 of this Appendix Civil Courts of Delhi are given Jurisdiction to hear and determine original cases. In Rule 4 appeals from original cases are provided and the use of the word 'case' in Rule 6(i) must necessarily refer to the case or cases which have been decided under Rules 3 and 4 of the Appendix even though the words used in Rule 6 are 'in any case under the Act'. This argument has the support of a judgment of Falshaw, J., in Civil Revn. No. 476 of 1950 decided on 6th July 1951' where the learned Judge has said:
'I cannot accept the contention that the word 'case' in Rule 6(i) means anything different from the word 'case' in all the other Rules.'
The learned Judge has also referred to Rule V of the Appendix where the power is given to the Court of first instance to determine whether a case is one under the Act or not. On the other hand, Bhan-dari, J., in 'BALMOKAND v. PARMANAND JAIN'. 53 Pun LR 115 entertained a revision against an order of the Rent Controller under Section 7-A and Schedule Fourth but the question whether a revision lay or did not lie does not seem to have been raised specifically. In 'Civil Revn. No. 366 of 1950, D/- 8-12-1950' I also entertained a revision against an order of the Bent Controller after the matter had been in appeal to the learned District judge. But in neither of these two cases was the question specifically decided although I remember that it was raised before me and I was then of the opinion that the words of Rule 6(i) of Appendix 'A' 'In any case under the Act' were wide enough to cover a revision against an order of the District Judge passed on appeal against the order of the Rent Controller. But, as I have said, I did not specifically decide this question and the Judgment of Bhandarl, J., also does not show that this question was decided nor does it seem to have been raised before him. Mr. Grover has further submitted that the word 'case' having been used in one sense in Rules 3, 4 and 7 could not bear a different meaning in Rule 6(i) of the Appendix. There is a great deal of force in this submission but in this Appendix itself the word 'Act' means the Delhi and Ajmer-Merwara Rent Control Act and, therefore, a decision made in any case under the Act might well include a decision given by the District Judge on appeal from the order of the Rent Controller. The matter is not absolutely free from doubt.
6. If this was the only matter in this revision, it would not have been difficult to decide the revision on merits because under Article 237 of the Constitution this Court has the power of superintendence which was at one time given to the High Courts under Section 107 of the Government of India Act, 1915. As in this case the question is of the powers of a Rent Controller to re-determine rents which had already been fixed once, the question is one of importance and would fall under cases which were decided under Section 107 of the Government of India Act, 1915 and now under Article 227.
7. The second Question that arises in this case is as to the powers of the Rent Controller. Under Section 7-A of the Act rent of a building the construc-tion of which was not completed before the commencement of this Act has to be determined in accordance with the Fourth Schedule. In Section 2 of the Act 'standard rent', in relation to any premises,means' * * *
(iii) where the standard rent has been fixed under Section 7-A, the rent so fixed.' The fourth Schedule referred to in Section 7-A of the Act makes provisions relating to the fixation of rent and other matters in respect of newly constructed premises in Delhi. 'Rent Controller' is defined in para. 1 of the Schedule. Paragraph 2 gives him the power of fixing the standard rent after making such inquiry as he thinks fit. Para. 4 provides the various circumstances which a Rent Controller has to take into consideration in order to determine the standard rent. Para. 6 provides for the increase of standard rent under certain circumstances and it Is as follows: '6. If at any time after the standard rent of any newly constructed premises has been determined under para. 2 it appears to the Rent Controller that subsequent to such determination some addition, improvement or alteration, not included in necessary repairs or repairs usually made to premises in that locality has been made to such premises at the landlord's expense, the Rent Controller may, after making such inquiry as he thinks fit, determine the standard rent thereof: Provided that any increase in the standard rent allowed under this paragraph shall not exceed 7 1/2 per cent, of the cost of the addition, improvement or alteration and shall not be chargeable with effect from any date earlier than the date on which the addition, improvement or alteration was completed.'
Para. 7 gives the power to the Rent Controller to require the landlord to produce books of account etc., to enter and inspect the premises or to authorise another officer to do the same. Para, 8 is as follows:
'8. The standard rent shall in all cases be fixed by the Rent Controller as for a tenancy of twelve months. Provided that where any newly constructed premises the standard rent of which is fixed under this paragraph, is let or re-let for a period of less than twelve months, the standard rent for such tenancy shall bear the same proportion to the annual standard rent as the period of tenancy bears to twelve months: Provided further that where such premises were so let or re-let by reason of the tenant being unwilling to take the same for twelve months, the standard rent for such tenancy shall be determined in accordance with the principles laid down in the Third Schedule,'
Paragraph 9 provides for reference to the Rent Controller for decision if any dispute arises between a landlord and a tenant over the application of para. 8 of the Schedule. Paragraph 10 provides that when the standard rent has been determined the landlord cannot claim or receive any sum in addition to the rent of any rent in excess of the standard rent.
8. Mr. Mittal submits that on a true construction of the various provisions of Schedule Fourth all that can be said is that a landlord cannot charge anything more than the standard rent fixed by the Rent Controller but there is no provision by which it is not open to the Rent Controller to re-determine or to review the determination of the rent which has been fixed by him if the circumstances change. The power of review, he submits, is an inherent power in every Tribunal and the Rent Controller in common with other Tribunals can also review the determination ofstandard rent if changed circumstances are brought to his notice.
9. Mr. Grover, on the other hand, submits that according to para. 10 of the Schedule where once the standard rent is fixed rent cannot be charged in excess of it and that the Rent Controller being a creation of the statute, his powers of varying his orders must be found in the statute, itself and because in para. 6 power is given to him to vary the rent already determined in certain circumstances, the variation by him can be done only in those circumstances and in none other and there also he can increase but he has no power of decreasing the standard rent. He has relied in this connection on a judgment of the King's Bench Division 'KING v. YORK', (1919) 88 LJKB 839 where a dwelling-house to which the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, applied was let at the standard rent of 10 shillings per week on August 3, 1914. At the end of November, 1917, it was let to another tenant at 20 shillings a week and the landlord applied to a County Court Judge under the Courts (Emergency Powers) Act, 1914, for leave to distrain for arrears of rent and obtained such leave. On appeal it was held that the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, applies to every change of tenancy of premises under the Act, and operates 'in rem' and not 'in personam' and, therefore, leave to distrain should not have been granted. Sankey, J., at p. 840 said as follows:
'I agree. The Act applies to objects, not to persons; it operates 'in rem' and not 'in personam'; and it stereotypes the rent of the particular house in question. The rent in the present case was 10 shillings per week on August 3, 1914. For the purpose of construing Section 2, Sub-section 1 we can substitute 10$ for the words 'standard rent' and then Section 1, Sub-section 1 provides that if the rent should be increased above this 10$ a week, it would be above the standard rent and would be irrecoverable.'
Lush, J., said at the same page:
'I think the Act does apply to the new tenancy, and the landlord has no power, by reason of Section 1(1) of the Act of 1915, to recover the excess, over 10$ a week. There is no doubt that, under Section 2(5), once the Act has become applicable to a dwelling-house it does not matter that, during the time the Act is in force, it comes to be used for other purposes. The Act, having once applied, continues to apply whether there has been a change in the character of the occupation or not.'
Mr. Grover's submission la that the standard rent is attached to the house and not to the tenant and that it cannot be raised even on reletting except in accordance with the Act. The rule in this case was approved of by the Court of Appeal in 'CARTER v. CARBURETTER CO. LTD.', ( (1942) 2 All ER 228). The principle of 'KING v. YORK', was followed in the Calcutta High Court in 'AHAMUDDIN v. BANKU BEHARY DUTT', AIR 1927 Cal 805 where it was held that the order of the Rent Controller fixing the standard rents, is an order which affects the house, and is, therefore, one which operates as a judgment 'in rem' and the question cannot be re-opened on the application of a subsequent tenant. In that case the learned Judges also held that the standard rent can be altered or varied under certain circumstances, for instance, when there, has been any alteration in the premises or an additional burden has been cast upon the landlord or similar circumstances, but that does not show that the Judgment fixing the standard rent is not a judgment 'in rem' and that it can be re-opened at any subsequent time. It is the words 'can be reopened at any subsequenttime' upon which counsel for the respondents strongly relies. The rule laid down in the English case was also followed by Setalvad, J., in 'CHAPSEY UMERSEY v. KESHAVJI DAMJI', 45 Bom 744. But all the cases to which my attention was drawn were those where a new tenant had come in and a higher rent was being charged and the question was whether in those circumstances the rent fixed by the Rent Controller was fixed for all tenants or not. In the present case, one of the considerations on which the rent was fixed by the Rent Controller and the learned District Judge in the previous proceedings was that the lease had been taken by the landlords for a period of two years. That particular factor has been varied in that the lease had been extended by another two years. The question is whether in these circumstances the Controller has the power to re-determine the rent under Schedule Pour and decrease the rent which had been fixed in the previous proceedings.
10. The powers given to the Rent Controller are given in Schedule Pour of the Act. There is no power as far as I can see by which rent once fixed can be decreased on a change of circumstances such as the ones that have been shown to exist in the present case. The matter is of very great importance as it is not only in circumstances such as the ones that exist in this case that the jurisdiction of the Rent Controller may be invoked; in certain other circumstances and cases it may also be invoked. I am, therefore, of the opinion that this is a fit case which should be decided by a larger Bench. I, therefore, refer this case to a Division Bench. The papers will be placed before my Lord the Chief Justice for the purpose.