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Krishna Devi Ganeriwala Vs. Dhan Raj Singh - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberSecond Appeal Nos. 40, 41, 42 and 50 of 1969
Judge
Reported in1972RLR259
ActsDelhi Rent Control Act, 1958 - Sections 6 and 9
AppellantKrishna Devi Ganeriwala
RespondentDhan Raj Singh
Advocates: Sultan Yar Khan and; M.L. Lonial, Advs
Excerpt:
.....1958 - matter relating to fixation of standard rent - appellant contended that disputed premises newly constructed thereforee exempted from operation of standard rent - big hall originally constructed on ground floor converted into shops by raising partition walls without changing roof and ceiling - such shops let out to tenants - premises in question do not constitute newly constructed building - held, premises not exempted from operation of standard rent. - - the additional controller in a well written judgment came to the conclusion that a big hall originally constructed on the ground floor in 1924 had been converted into 23 shops by raising partition walls without changing the roof or the ceiling or the flooring and did not constitute new construction so as to be exempt from..........13.00 per month. the contention of the landlady appellant was that the premises in dispute were newly constructed. the additional controller in a well written judgment came to the conclusion that a big hall originally constructed on the ground floor in 1924 had been converted into 23 shops by raising partition walls without changing the roof or the ceiling or the flooring and did not constitute new construction so as to be exempt from the operation of the standard rent for a period of five years. he also found that there was no satisfactory evidence of determining the standard rent of the premises in accordance with the rules laid down in section 6 of the act and so he determined the standard rent under section 9(4) of the act with effect from the date of the respective petitions. the.....
Judgment:

B.C. Misra, J.

(1) This order will dispose of four second appeals from orders Nos. 40, 41, 42 and 50 of 1969 filed under section 39 of the Delhi Rent Control Act 59 of 1958 (hereinafter referred to as the Act), all directed against the identical order of the Rent Control Tribunal dated 29th October, 1968, by which the appeals of the tenants were dismissed and order of Mr. P. K.. Bahri, 1st Additional Controller dated 11th March, 1968 was affirmed, finally fixing the standard rent of the premises in occupation of the various tenants at Rs. 45.00 per month.

(2) The dispute between the parties relates to a property situated at Kashmere Gate. Delhi. This property formerly consisted of a large hall on the ground floor, but later on in 1963 or so it has been converted into various shops which have been let out to different tenants at a rent of Rs. 90.00 per month each. The respondents in these appeals having taken the premises on rent in 1964, filed objections under section 9 of the Act for fixation of standard rent. They claimed that the property was old and standard rent should be fixed at Rs. 13.00 per month. The contention of the landlady appellant was that the premises in dispute were newly constructed. The Additional Controller in a well written judgment came to the conclusion that a big hall originally constructed on the ground floor in 1924 had been converted into 23 shops by raising partition walls without changing the roof or the ceiling or the flooring and did not constitute new construction so as to be exempt from the operation of the standard rent for a period of five years. He also found that there was no satisfactory evidence of determining the standard rent of the premises in accordance with the rules laid down in section 6 of the Act and so he determined the standard rent under section 9(4) of the Act with effect from the date of the respective petitions. The aforesaid findings of the Controller have been affirmed by the Rent Control Tribunal. Aggrieved by the same, the landlady has filed second appeals in this Court.

(3) The learned counsel for the appellant has contended that the premises in dispute are not the same old premises and they constitute newly constructed premises within the meaning of section 2(i) of the Act and they are exempt from the operation of the standard rent within the meaning of clause (b) of sub-section (2) of section 6 of the Act. The next contention made in the alternative is that the rent of the premises ought to have been fixed under sub-clause (b) of clause (2) of part B of sub-section (1) of section 6 of the Act and not under section 9(4) of the Act and at all events the rent should be higher.

(4) The principal question for consideration is whether the premises in dispute constituted newly constructed building. Section 2(i) defines the word 'premises' as any building or part of a building which is, or is intended to be, let separately for use a? a residence or for commercial use or for any other purpose, (The rest of the inclusive portion of the definition is not at present material). Clause (b) of sub-section (2) of section 6 of the Act, the construction of which is called for in this case, reads as follows:-

'IN the case of any premises, whether residential or not, constructed on or after the 9th day of June, 1955, including premises constructed after the commencement of this Act, the annual rent calculated with reference to the rent agreed upon between the landlord and the tenant when such premises were first let out shall be deemed to be the standard rent for a period of five years from the date of such letting out.'

(5) Another provision which may be referred to with advantage is contained in section 7(1) of the Act:-

'WHERE a landlord has at any time, before the commencement of this Act with or without the approval of the tenant or after the commencement of this Act with the written approval of the tenant or of the Controller, incurred expenditure for any improvement, addition or structural alteration in the premises, not being expenditure on decoration or tenantable repairs necessary or usual for such premises, and the cost of that improvement, addition or alteration has not been taken into account in determining the rent of the premises, the landlord may lawfully increase the standard rent per year by an amount not exceeding seven and one-half per cent of such cost.'

(6) The increase of rent permitted by sub-section (1) of section 7 is in excess of the standard rent as defined in section 6. The scheme of section is that with respect to properties constructed and let out prior to 2nd June, 1944, the rate at which they were let out, would, subject to additions calculated according to the second Schedule of the Act, constitute the standard rent, but if any rent has been determined under the previous Rent Acts of 1947 or 1952, an increase of certain percentage has been permitted. Clause (b) of sub-section (1) of section 6 provides that in any other case the reasonable cost of construction and the market price of the land comprised in the premises on the date of commencement of the construction would form the basis on which the rent would be calculated at a percentage provided in the statute. However, in respect of the premises that are constructed after 2nd June. 1951 but before 9th June, 1955 or after 9th June, 1955. the operation of the standard rent has been given a holiday, as is popularly known, for a specified period of 7 or 5 years. In the present case the finding of the Additional Controller as well as the Tribunal concurrently is that a large hall has been converted into 23 shops by putting up partition walls without any alterations in the roof or flooring or the main walls supporting the building. The newly let out shops are certainly not the same premises as each of them has been separately let for use and is distinct from the letting of the old building: See Sadliu Singh v. District Board Gurdaspur 1962 Pun L R 1, and Messrs San! Ram Des Raj v. Karam Chand. 1962 Pun L R 758. This, however, logically does not lead to the conclusion that because the premises are not the same, they are necessarily newly constructed. The reference to newly constructed premises in section 6 partakes of the characteristics of its being a building or part of a building and. thereforee, the building or part of the building must be newly constructed.

(7) In the context of section 6, I agree with the counsel for the appellant that construction would include re-construction and in legal effect, there is no difference between construction and re-construction for purposes of this Act which is distinct from the definition of the expression contained in the Delhi Municipal Corporation Act. Between the buildings which have been entirely constructed or re-constructed from the very foundations to the buildings which have merely been repaired or improved, there is a large variety of cases where structural alterations have been made or improvements or additions have been made, meriting increase in the standard rent under section 7, but under what circumstances can it be called that a building is newly constructed? Megarry in Rent Acts, 10th Edition at page 114 has observed that if a house is subjected to substantial structural alteration, it becomes a new and separate dwelling house by reason of change of identity and then the new premises shed all the attributes of the old. But to fall under this head, there must be something fundamental transforming the general structural character of the house as an entire entity: the change must be more radical than mere improvements or structural alterations or mere functional change of making one dwelling into two. It has also been observed that the Court must be astute to see that the landlord is not evading the restrictions upon increases of rent imposed by the statute by a small and possibly colourable alterations of the structure, or by a mere sub-division of the tenement. The House of Lords in Capital and Provincial Property Trust v. Rice, 1952 Appeal Cases'142^) observed on page 150 that the line of demarcation (between the premises which have changed their identity) has been plainly established; there must have been some structural alterations before the dwelling can be said to change its identity and become a new entity. In the facts of the case Lord Porter observed that on the blocking of the connecting door a new flat came into existence which was different from the whole or the part, but this was not found sufficient to establish the change of identity of the property. In an earlier decision Langford Property Company LimitedVs. Batten. 1951 Appeal Cases 223, Lord Radcliffe observed on page 240, that two main causes must be responsible for change of identity-one is a physical change brought about by improvement or structural alteration of the premises and the other is alteration of the subject-matter by including in a subsequent letting more than was previously let or, alternatively, by excluding some part formerly devised. Mere improvements or structural alterations do not constitute change of identity, but a certain percentage is allowed to the landlord upon the amount of expenditure on improvements or structural alteration. thereforee, some change more radical than the mere fact of improvement or structural alteration must take place before it can be said that in effect, the dwelling house newly let had previously not been let. The noble Lord observed that there was no simple general rule to provide an answer and in substance it remained a question of fact to be ascertained by the Court on the facts and circumstances of the case.

(8) Both the learned counsels for the parties have submitted that there Is no decision of this Court on the subject. Reliance has, however, been placed on a few decisions of the High Court of Punjab in the case of Sadhu Singh (supn). The Division Bench after taking into consideration the dictionary meaning of the words 'construction' and 'building' from Webster's New World Dictionary, observed that the definition of the word 'building' in the Rent Act covered a part of the building which was kt out to a tenant and this was special definition for purposes ofthe Rent Act to prevent eviction of tenants and to restrict the changing of excessive rents. The Court observed that foi purposes of this Act there was no distinction between construction and reconstluction. but the Court finally held that partial construction would not constitute construction, but where the entire part was pulled down and rebuilt, it would amount to construction and in each case it was 3 question of degi'ee when re-construction would amount to construction witling the relevant provision of the Rent Act. in Master Umrao SinghV'.. S. P. Kaushik. 1963 Pun LR 613 A.N. Grover J. (as he then was) held that it would not constitute change of identity of the premises if instead of a kitchen, a bath room was included in the tenanted premises, nor if one room out of there were replaced by another room of a similar size in the same bu'lding. In R.B. Sewak Ram Trust Society v. Mokham Chand. 1964 Plr 526 a learned Single Judge following the Division Bench authority in the case of Sadhu Sing/I (sliprd) held that it was a question of degree as to when reconstruction would amount to construction of the building within the meaning of the law and where the floor area of the shop remained the same. but the height had been raised which would give more storage space in the shop and if the old roof were replaced by lined roof, re-flooring and re-plastering were also done and the foundations of some of the walls were dogged again and the front wall was built anew,' though foundation of the back wall was not re-excavated and some of the previous building material was used in new construction, it was found that the construction constituted a new construction. The counsel has cited Doripandi Konar Vs . Sundara Pathar, : AIR1970Mad291 wheezing his lordship considered the connotation of the word 'repairs' within the me?ning of clause (f) of section 108 of the Transfer of Property Act as well as section 2(7) of the Madras Buildings (Lease and Rent Conirol) Acv (18 of 1960), and court observed as follows at page 297

'THE basic idea underlying the concept of repairs is restoration of a building to its original condition. This implies that the old structure is retained and is renovated from the damaged condition to its original sound state. Repair always involves an clement of renewal, but renewal of the whole and substantially the whole cannot be termed repair proper. Where the building is completely demolished and a new structure put instead, it would normally tie reconstruction, not repairs proper. In exceptional cases, however, as those enumerated by Cozens Hardy M. R. in 1911-1 K..B. 905, repair may imply a complete renewal and substitution. An addition, material alteration or anything which substantially improves a thing in value from the original condition except in so far as it is necessary to carry out such restoration cannot be said to be merely repair of that thing, it will be bringing into existence an altered thing, an improved thing, a new thing for all intents and purposes'.

(9) On the facts of that case, the Court found that the original building consisted of only the roof. walls and the floor- and thereafter the entire roof had been replaced, all the walls had been put up afresh and the flooring had been completely done up anew: the building had been substantially renovated and it was, thereforee, a case of material alteration improvements and not merely repairs.

(10) In view of the provisions of the Rent Act and the authorities cited above, my conclusion is that in each case it is a matter of degree as to how much improvements and alterations in an old existing building would constitute a newly constructed or reconstructed premises, but in any view of the matter, very substantial structural alterations and improvements must be made in the main structure of the building before it can claim to be newly constructed. Arough and ready guide of practical value may, however, be found. Under section 331 of the Delhi Municipal Corporation Act, erection of a building means to erect a new building on any site whether previously built upon or not and clause (b) defines the expression 'to erect a building' any building of which more than one-half of the cubical contents above the level of the plinth have been pulled down, burnt or destroyed, or any building of which more than one-half of the superficial area of the external walls above the level of the plinth has been pulled down or any frame building of which more than half of the number of the posts or beams in the external walls have been pulled down. This definition is special for purposes of the Municipal Corporation Act to restrict the construction . of buildings without permission, but this definition has been applied and worked in Delhi in relation to cases under the Municipal Corporation Act which was passed on 28th December, 1957 and came into force on 7th April, 1958, about the same time as the Delhi Rent Control Act of 1958, passed on 31st December, 1958 came into force on 9th February, 1959. This definition is, thereforee, well understood by the landlords of the immovable properties in Delhi who must obtain sanction of the Corporation before they carry out any work of erection or re-erection of a building. The definition in the Corporation Act brings within its purview reconstruction of more than one-half of the cubical contents or of the superficial area. In my opinion, in respect of the premises under the Delhi Rent Control Act, it would be safe to infer that where three-fourth of the main structure has been reconstructed or where the roof arid. the main walls on three sides have been re-erected, it may constitute a new building within the meaning ofthe Rent Act irrespective of whither or not the flooring has been changed and the foundations re-excavated, but merely putting up some internal walls or changing ons or two side walls or carrying out other minor alterations and additions, would ordinarily not constitute a newly constructed building. In addition to the structural changes indicated above, it is an essential condition under the Rent Act that to constitute a new premises, the building or part of the building having been constructed or reconstructed, must separately be let or intended to be let out within the meaning of section 2(i) of the Act.

(11) The fading's of fact concurrently recorded by the authorities below are that a big hall originally constructed on the ground floor in the year 1924 had been converted into 23 shops by raising partition walls without changing the roof or the ceiling or the flooring and the main structure of the building remained same old one. On this finding as a result of the application of the test stated above, I hold, in agreement with the Tribunal below that the premises in dispute do not constitute newly constructed buildings. As such they are not exempt from the operation of the standard rent for any period under clause (b) of subsection (2) of section 6 of the Act.

(12) This leads us to the question as to how, in accordance with the provisions of law, standard rent should be determined. Although the premises are not part of any newly constructed building, still they are not the same premises and, thereforee, the rent payable in respect of the hall in 1924 or, for that matter, on 1st November, 1939. will not constitute the original rent as defined by the Second Schedule to the Act we are, thereforee, left with sub-clause (b) of clause (i) of Part B of sub-section (1) of section 6 and sub-section (4) of section 9 of the Act. The authorities below have concurrently found that there is no satisfactory evidence of the cost of construction and the market price of the land as required by sub-clause (b) and nothing has been urged to persuade me to hold that this finding is not correct. Section 9(4) of the Act leaves sufficient scope for exercise of judicial discretion to fix the rent which the Controller may consider reasonable, having regard to the situation, locality, condition of the premises, amenities provided therein and the standard rent payable in respect of similar or nearly similar premises in th3 locality. In Shri Chuni Lal through Legal Representatives v. Shri Ram Parkash Kapoor, 1970(2) Rent Control Reporter 67, S.N. Andley, J. (as he then was) observed as follows:-

'THE fixation under this sub-section has necessarily to have an element of speculation and conjecture and it cannot be discarded merely on the ground that it is based on speculation and conjecture.'

(13) Mr. P.K. Bahri 1st Additional Controller has in a well considered order and after scrutiny of the entire oral and documentary evidence produced on the file fixed the standard rent at Rs. 540.00 par annum or Rs. 45.00 per month as against the contracted rent of Rs. 90.00 per month and the rent of Rs. 15.00per month claimed by the tenant. The said finding has been affirms by the Rent Control Tribunal on appeal. I do not find any infirmity w'.th the said decision. Consequently affirm it.

(14) As a result the appeals fail and are dismissed with costs with one' hearing fee for the counsel. In view of the findings recorded above, the cross-objections filed by the tenants do not survive for decision. nor have they been pressed. Th:y are, thereforee, dismissed with no separate order for costs.


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