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Rainbow Electric Supply Corporation Vs. S.V. Chenchuramiah and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. Nos. 1606 and 2206 of 1968
Judge
Reported inAIR1973Mad152
ActsMadras Buildings (Lease and Rent Control) Act, 1960 - Sections 4 and 34
AppellantRainbow Electric Supply Corporation
RespondentS.V. Chenchuramiah and anr.
Excerpt:
- - as various companies borrow at more than nine per cent on good security, the fixation of 9 per cent return in arriving at the rental value cannot be said to be too high. in the circumstances all the contentions put forward by the tenant fail. 539.45. 5. in the result subject to the above modification the civil revision petitions filed by the tenant and the landlord fail and they are accordingly dismissed......not belong to him. the courts below have accepted the landlord's case and held that the second floor construction should not be taken into account in arriving at the site value. i accept the finding of the appellate judge and hold that the apportionment of the site value should be confined only to the ground floor and the first floor.regarding the amenities the act provides the maximum of 25 per cent of the cost of construction and the courts below have held taking it into account various factors that 20 per cent should be allowed. i cannot say that the value of the amenities fixed at 20 per cent is high.3. the last contention of the tenant is that the return of 9 per cent of the cost of construction is too high and that it ought not to be fixed at more that 6 per cent. there is no.....
Judgment:
ORDER

1. The petitioner in C. R. P. No. 1606 of 1968 is the tenant and the respondents therein are the landlords. The tenant filed H. R. C. No. 492 of 1965 under Section 4 of Madras Act 18 of 1960, for fixation of fair rent in respect of premises No. 217 Govindappa Naicken St., G. T. Madras, on the ground that the existing rent was excessive. The Rent Controller fixed the fair rent of Rs. 542 per mensem. The tenant filed H. R. A. 806 of 1965 to the Court of Small Causes, Madras and the appellate Judge confirmed the order of the Rent Controller. Against the said decision, C. R. P. 1606 to 1968 was filed by the tenant, while the landlords filed C. R. P. 2206 of 1968, objecting to the low rent fixed by the courts below. The above civil revision petitions came up for hearing on 27-11-1970. By that time the Supreme Court in K. C. Nambiar v. IV Judge, Small Cause Court, Madras, : [1970]1SCR906 had struck down Rule 12 of the Rules made under Section 34 of the Madras Buildings (Lease and Rent Control) Act, 1960. As a result of the above decision the rent for the premises had to be fixed afresh. I, therefore, set aside the order of the appellate authority and remitted the matter back to him to record a finding on the cost of the construction of the premises with a view of fix the fair rent for the premises in question. The appellate authority has recorded a finding valuing the total cost of construction of the premises at Rs. 32,534.20. When the matter came up before me on 7-1-1972 I accepted the finding and called upon the counsel to file a memo calculating the rent on the above basis. The learned counsel for the landlords has furnished the memo of calculation of fair rent on the basis of which the fair rent of the premises is Rs. 539.45. The memo of calculation as given by the learned counsel for the landlords is as follows:--

'Old portion in the ground floor built in 1910 (50 years prior to the date of petition as determined by the lower courts) Rs.7017.04 New portion in the ground floor built in 1946 (20 years ago prior to the date of petition as determined by the lower courts) Rs.16529.61 First floor built in 1910 (50 years prior to the date of petition as determined by the lower courts) Rs.8987.55 Total cost of construction being the finding of the appellate authority on remand as accepted by this Honorable Court as per its order dated 7-1-1972 Rs.32534.20 A menities on the cost of construction at 20% as determined by the court below Rs.6506.84 Value of the site as determined by the Courts below Rs.32886.00 Total Rs.71927.04 Return at 9 per cent as determined by courts below Rs.6473.43 R ate of rent per month Rs.539.45 Fair rent of the premises per month Rs.539.45.'

2. The counsel for the tenant objected to the valuation given above on the following grounds:

1. The value of the amenities at 20 per cent of the cost of construction is too high;

2. The value of the site at Rs. 32886/- is too high, as it fails to take into account the existence of a second floor; and

3. The return of 9 per cent on the cost of construction is too high and that the return can be not more than 6 per cent.

The learned counsel for the landlord raises the following contentions: (1) The courtyard portion inside the building has not been taken into account in arriving at the plinth area and the area of the site; (2) The land value ought to have been fixed at one lakh of rupees per ground and not Rs. 50,000/- per ground, (3) The cost of electric installation, electric motor pump and other fittings should have been included in the cost of construction of the building; and (4) in arriving at the land value of the first floor consisting of two storeys, the courts below erred in distributing the market value proportionately in accordance with two storeys. The extent of the ground floor is 2207 sp. ft. while in the first floor, the built up area is 950 sp. ft. Though the building in question is partly residential and partly non-residential, the courts below have found that it is predominantly non-residential and we will have to proceed on this basis. Ramaprasada Rao, J., in S. Attenderloo Chetti's Charities v. M/s. Sadhana Aushadalaya, (1968) 81 MLW 196, held that fixation of fair rent for the site value in an application under Section 4 of the Madras Buildings (Lease and Rent Control) Act, 1960, in the case of buildings having more than one floor, ought to be one of apportionment in accordance with the number of storeys.

The learned Judge held that if there are more than two storeys the site value has to be proportionately distributed in accordance with the number of storeys in the buildings. The question in the present case is whether there is a second storey in the building in question. The learned counsel for the tenant urges that in the second floor a structure with asbestos cement roofing is in existence and the landlord is deriving rent therefrom and the contention is that the court has to apportion the site value amongst the ground floor, first floor and the second floor. The landlord's reply to this contention is that the structure in the second floor does not belong to him. The courts below have accepted the landlord's case and held that the second floor construction should not be taken into account in arriving at the site value. I accept the finding of the appellate Judge and hold that the apportionment of the site value should be confined only to the ground floor and the first floor.

Regarding the amenities the Act provides the maximum of 25 per cent of the cost of construction and the courts below have held taking it into account various factors that 20 per cent should be allowed. I cannot say that the value of the amenities fixed at 20 per cent is high.

3. The last contention of the tenant is that the return of 9 per cent of the cost of construction is too high and that it ought not to be fixed at more that 6 per cent. There is no substance in this contention. As various companies borrow at more than nine per cent on good security, the fixation of 9 per cent return in arriving at the rental value cannot be said to be too high. In the circumstances all the contentions put forward by the tenant fail.

4. On the first question, C. R. P. No. 2206 of 1968 there is no material on which the contention could be put forward and the courts below rightly negatived the plea of the landlord. On the question of fixation of land value the landlords have not furnished materials to substantiate their claim that the value of a ground is one lakh of rupees in that locality. On the other hand, on the materials placed, the courts below have rightly fixed the market value at Rs. 50,000/- per ground. On the third question, viz., the inclusion of cost of electric installation etc., in the absence of materials the courts below rightly rejected the landlord's contentions. On the last question, it is admitted that there is a ground floor and a first floor. In the circumstances, the courts below rightly applied the judgment in (1968) 81 MLW 196, referred to above and distributed the market value arrived at on the basis of the existence of the ground floor and the first floor. The fair rent of the premises worked out on the basis of the finding recorded is Rs. 539.45.

5. In the result subject to the above modification the civil revision petitions filed by the tenant and the landlord fail and they are accordingly dismissed. These will be no order as to costs.

6. Order accordingly.


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