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Chelladurai Alias V.N. Veeman Pillai and anr. Vs. Paramanand Jindal - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1980)2MLJ441
AppellantChelladurai Alias V.N. Veeman Pillai and anr.
RespondentParamanand Jindal
Cases ReferredPalaniappa Chettiar v. Vairavan Chettiar
Excerpt:
.....be taken into account for the purpose of determining the value of the vacant site as well as the value of the building was negatived. , the site as well as the building was fixed at r. in a very broad sense, it may take in any erection intended for use and occupation as a habitation or for some purpose of trade or manufacture, but not a mere wall, a fence, a gate or the like. indeed, in the notice sent by the landlord under exhibit b-2, dated 17th january, 1975, the property demised under the lease agreement, dated 25th june, 1962, is set out in the schedule and this includes the cement drying-yard as well. the use of the word 'thereof is not without significance and it means 'of that' or 'from that'.it is rather unfortunate that the language employed in the proviso is not very happy,..........of 1977 and the c.r.ps. arise out of proceedings initiated by the landlord for the fixation of fair rent in respect of door nos. 6-a and 7, nallamuthu pillai new road, madurai town. the building in question admittedly belonging to the petitioner in g.r.p. no. 2420 of 1977, had been leased to the petitioner in c.r.p. nos. 3064 of 1977 and 3065 of 1977 on a monthly rental of rs. 351 according to the landlord, the monthly rent fixed at rs. 351 under the terms of a lease arrangement, dated 25th june, 1962, for a period of six years is too low and that the building, which consists of terraced building, big godowns, tin sheds, tiled varandah and rooms, cement paved drying yard, cement tubs etc.. will fetch more if let out. the building, according to the landlord, was used by the tenant for.....
Judgment:

V. Ratnam, J.

1. The landlord is the petitioner in G.R.P. No. 2420 of 1977, while the tenant is the petitioner in C.R.P. Nos. 3064 of 1977 and 3065 of 1977 and the C.R.Ps. arise out of proceedings initiated by the landlord for the fixation of fair rent in respect of door Nos. 6-A and 7, Nallamuthu Pillai New Road, Madurai Town. The building in question admittedly belonging to the petitioner in G.R.P. No. 2420 of 1977, had been leased to the petitioner in C.R.P. Nos. 3064 of 1977 and 3065 of 1977 on a monthly rental of Rs. 351 According to the landlord, the monthly rent fixed at Rs. 351 under the terms of a lease arrangement, dated 25th June, 1962, for a period of six years is too low and that the building, which consists of terraced building, big godowns, tin sheds, tiled varandah and rooms, cement paved drying yard, cement tubs etc.. will fetch more if let out. The building, according to the landlord, was used by the tenant for the purpose of running a rice and flour mill and that the age of the-building will be about 30 years. The cost of vacant site, according to the landlord, in the area in question was not less than Rs. 10 per sq.ft. and the fair rent calculated in accordance with the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act (hereinafter referred to as the Act) will be Rs. 2,400 per mensem and the landlord accordingly prayed for the fixation of fair rent at Rs. 2,400 per mensem from 2nd May, 1975, the date of the petition.

2. The tenant resisted this application con-tending that the building was an old one more than 70 years old and in a dilapidated condition, and that value the of the building will not be more than Rs. 20,000. The tenant pleaded that the value of the site would only be about Rs. 2 per sq.ft. It was also further contended by the tenant that even in the notice issued by the landlord prior to the filing of the application for fixation of fair rent, a fair rent in a sum of Rs. 1,483.61 alone was claimed and therefore, the claim of the landlord was excessive and inflated. The tenant stated that there are no amenities whatever and that the existing rent of Rs. 350 per month is on the higher side and therefore, prayed for the dismissal of the application.

3. The learned Rent Controller, on a consideration of the oral and documentary evidence, fixed the value of the site at Rs. 4 per sq. ft. and the value of the building at Rs. 15 per sq. ft. Determining the age of the building as 50 years and applying the rule of depreciation as applicable to Glass IV of Schedule II of the Act, the learned Rent Controller fixed the depreciated value of the building at Rs. 29,970 and arrived at the total value of the building including the site value at Rs. 57,420. To this, the learned Rent Controller added 5% by way of amenity in respect of the vacant site and 10% of the cost of construction by way of amenity for cement drying yard and water tubs etc., and arrived at the total cost of the building at Rs. 66,310 rounded off to Rs. 66,300. Since the building is a non-residential one, the Rent Controller fixed the rent at 12% of the gross return per annum on the total cost and fixed the fair rent for the building at Rs. 663 per month. Aggrieved by this, the landlord preferred an appeal in C.M.A. No. 317 of 1976 while the tenant preferred C.M.A. No. 330 of 1976 to the Appellate Authority (Principal Subordinate Judge, Madurai). The Appellate Authority, on a consideration of the plan of the Commissioner included the area marked H.I.J.G. therein and fixed the total area of the constructed buiding at 6,330 sq.ft. instead of 5,490 sq.ft. as determined by the Rent Controller There was no dispute before the Appellate Authority with reference to the value of the site viz., Rs. 4 per sq. ft. Dealing with the dispute between the parties with reference to. the extent of the site, the Appellate Authority applied the proviso to Section 4 of the Act and for the purpose of arriving at the total cost of the site, it took into account the precise extent of the site occupied by the construction and also a portion upto 50 % thereof of the vacant land and fixed the extent of the site at 6,330 sq.ft. plus, 3165 sq.ft. equal to 9,465 sq.ft. out of a total extent of 22,057.5 sq.ft. The objection raised by the landlord that the drying yard should also be treated as a building and that it should also be taken into account for the purpose of determining the value of the vacant site as well as the value of the building was negatived. The cost of the site of 9,495 sq.ft. at the rate of Rs. 4 per sq.ft. was fixed at Rs. 37,980 and the cost of construction in respect of 6,330 sq.ft. at Rs. 15 per sq.ft. after depreciation was fixed at Rs. 50,542. In addition, 10% of the value of the site was taken into account as and by way of amenity and the total cost of the construction viz., the site as well as the building was fixed at R.50,542 plus Rs. 41,778 equal to Rs. 92,320. Fixing 12% gross return on this total cost, the monthly rent was arrived at Rs. 923.20 rounded upto Rs. 924. Accordingly in modification of the order of the Rent Controller, the Appellate Authority fixed the fair rent in respect of the building in question at Rs. 924 per mensem thereby partly allowing the appeal preferred by the landlord in C.M.A. No. 317 of 1976 and dismissing the appeal in C.M.A. No. 330 of 1976 preferred by the tenant. Against this, the landlord has preferred C.R.P. No. 2320 of 1977 claiming that the fixation of the fair rent by the Appellate Authority is not correct and indeed should be higher, while the tenant has preferred C.R.P. Nos. 30 : 64 of 1977 and 3065 of 1977 contending that the fixation of fair rent by the Rent Controller is excessive and not in accordance with the provisions of the Act.

4. The learned Counsel appearing for the landlord/petitioner in C.R.P. No. 2420 of 1977 raised two contentions. The first is that the cement-paved drying-yard should be considered as a building and the cost of construction thereof must also be ascertained and taken into account in fixing the fair rent. On the contrary, the learned Counsel for the tenant-respondent contends that the cement-paved drying - yard cannot, by any stretch of imagination, be a building as normally understood and therefore, this ought not to be taken into account at all. It will be useful to refer to the definition of the word 'building' in Section 2(2) of the Act and the definition runs as under.

'(2)' Building' means any building or hut or part of building or hut, let or to be let separately for residential or non-residential purpose and includes--

(a) the garden, grounds and out-houses, if any, appurtenant to such building hut or part of such building or hut and let or to be let along with such building or hut.

(b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut, but does not include a room in a hotel or boarding house.

Some assistance can be derived from the above definition in ascertaining the meaning of the word 'building' in the Act. If the derivative meaning of the word 'building' is taken into account, it means something which is built. It may be a wall or it may just be a structure unfit for human habitation. It need not necessarily be a house. The word 'building' is used as denoting and descriptive of a structure either of the nature of a house intended for human habitation or for carrying on of a business. In a very broad sense, it may take in any erection intended for use and occupation as a habitation or for some purpose of trade or manufacture, but not a mere wall, a fence, a gate or the like. In this sense, it would be extremely difficult to bring a cemented drying-yard as such within the main part of the definition of a building under the Act referred to above. But the structure in question in the present case will fall within the inclusive and extended definition of 'build-ing' in the Act. It is not in dispute that the cement drying-yard formed part of the demise originally. Indeed, in the notice sent by the landlord under Exhibit B-2, dated 17th January, 1975, the property demised under the lease agreement, dated 25th June, 1962, is set out in the schedule and this includes the cement drying-yard as well. In the reply sent by the tenant under Exhibit B-3, dated 11th February, 1975, it has been stated that the description of the property has been wrongly given. In paragraph 6 of the petition for fixation of fair rent, the landlord has again reiterated that the premise leased out to the tenant consisted of, among others, the cement-paved drying-yard. The tenant has not demurred to this in any manner in the statement of objections filed by him. Therefore, the cement drving-yard, on the facts of the instant case, would fall within the inclusive definition of 'building' under Section 2(a) of the Act and as being ground appurtenant to the rice mill and let along with the rice mill building. As pointed out by Anatanarayanan, J., in Palaniappa Chettiar v. Vairavan Chettiar (1960) 1 MLJ (SN) 29, the word 'appurtenant' includes all structures of property abutting or adjacent to the main tenement or property which are proper and necessary for its due enjoyment. A fortiori, in the present case, the cement drying-yard, just north of the rice mill, having been let out with the rice mill, would fall within the extended definition of a building. Even otherwise, if the landlord were to file an application for an order of eviction against the tenant in respect of the building, such an application has to be filed as regards the entire property demised inclusive of the cement drying-yard. If this is the position, then the building for purposes of fixation of fair rent cannot exclude the cement drying-yard. In this view, it is unnecessary to consider the other submission made by the learned Counsel for the landlord/petitioner that recourse may be had to the ordinary dictionary meaning of the word 'building'. Under these circumstances and on the facts of the present case, the cement drying yard has to be taken into consideration as being included within the definition of a building for the purpose of fixing the fair rent.

5. The second contention of the learned Counsel for the petitioner/landlord is that the Appellate Authority was in error in having taken into account only one half of the built up area viz., half of 6330 sq.ft. in calculating the market value of the site in which the building is constructed. Elaborating this further, the learned Counsel con tended that the Appellate Authority ought to have taken into account one half of the vacant site and not one half of the site on which the building is constructed for purposes of fixing the actual extent of the site over which constructions have been put up. Section 4(1) introduced by Tamil Nadu Act XXIII of 1973 states that the Controller shall, on application made by the tenant or the landlord of a building and after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in Sub-sections (2) to (5). Sub-sections (2) and (3) enumerate that the fair rent for any residential building shall be 9% gross return per annum, while the fair rent for any non-residential building shall be 12% gross return per annum on the total cost of such building. Sub-section (4) indicates how the total cost in respect of either a residential or a non-residential building has to be arrived at. The total cost referred to in Sub-sections (2) and (3) of Section 4 consists of the market value of the site in which the building is constructed, the cost of constructions of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent. Then follows the first proviso which runs thus:

Provided that while calculating the market value of the site in which the building is constructed, the Controller shall take into account only that portion of the site on which the building is constructed and of a portion upto fifty per cent. thereof of the vacant land, if any, appurtenant to such building, the excess portion of the vacant land being treated as amenity ;

This indicates the basis and the date on which the market value of the site in which the building is constructed is to be calculated. It may be mentioned that this proviso was introduced by Section 6 of Tamil Nadu Act XXIII of 1973, though the Bill 39 of 1972, as originally introduced, did not contain any such proviso. This proviso 'enacts an artificial rule to fix the market value of the site in which the building is constructed. For that purpose the Controller should take into account that portion of the site on which the building is constructed and a portion upto 50 % thereof the vacant land, if any, appurtenant to such building. The effect of this proviso is that in order to arrive at the market value of the site in which the building is constructed, it is not only the actual area over which the building is constructed that should taken into account, but also a portion upto 50 % thereof of the vacant land. The use of the word 'thereof is not without significance and it means 'of that' or 'from that'. It is rather unfortunate that the language employed in the proviso is not very happy, nay it is inelgant, but the intendment of the proviso is that while enacting an artificial rule for the purpose of fixing extent of the site whose market value has to be ascertained to be included in the total cost of construction, it further imposes, a ceiling, as it were, on that extent which would go to make up the site whose market value has to be ascertained. In other words, the market value of the site to be ascertained for purposes of including it in the cost of construction is not only the actual site over which the building is constructed, but something additional or extra limited to 50 % thereof. The proviso simply means this. The actual area of the site over which the construction has been put up has to be first determined. From the total area of the site, the area of the site over which the building has been put up has to be deducted and the balance, if any, will be the vacant land. If, the area of the vacant land thus arrived at is equal to or less than 50 % of the area of the site over which the construction has been put up has to be first determined. If the area of the vacant land thus arrived at is equal to or less than 50 % of the area of the site over which the construction has been put up, such extent of vacant land has to be added on to the area of the site occupied by the construction and the market value of the site will be the market value of that area. If, however, the vacant land is in excess of 50% of the area over which the construction has been put up, then, the extent to be added to the area of the site occupied by the construction will be only 50% of that area and no more and the market value of the site will be the market value of that area. In the latter case, the vacant land remaining after so adding 5p % of the area of the site over which the construction has been put up to the area of the site occupied by the construction, is treated as on excess portion and amenity. In other words, such excess is not taken into account as site for purposes of ascertaining the market value, but treated as an amenity. In the light of the above interpretation of the proviso, in the instant case, it is found that the Appellate Authority, while calculating the market value of the site, has taken into account only that portion of the site on which the building is constructed viz., 6330 sq.ft. and had added 50 % to the same of the site on which the building is constructed and thus arrived at 9495 sq.ft. as the area the market value of which has to be determined. There is absolutely no error in this method which has been adopted by the Appellate Authority, especially when the total extent of the property is 22,057.5 sq.ft. and the portion of the site on which the building has actually been constructed is only 6330 sq.ft. The approach in this regard, by the Appellate Authority is, therefore, unexceptionable.

6. That leaves for consideration the revisions preferred by the tenant objecting to the fixation of fair rent as has been done by the Appellate Authority. Though the tenant raised a dispute with reference to the inclusion of H.I.J.G. portion delineated in the Commissioner's plan and claimed that he had put up the construction there, there is absolutely no evidence whatever to substantiate this claim of the tenant. Consequently, the Appellate Authority was right in fixing the area of the construction at 6330 sq.ft.

7. Another point which was raised by the tenant was that the cost of construction fixed at Rs. 15 per sq.ft., was excessive. In this regard, the evidence of P.W.1, who is a licensed Building Contractor, is to the effect that the cost of construction of the building in question will be Rs. 25 per sq.ft. whereas a retired Engineer of the Public Works Department, examined as R.W. 1, has given the value at Rs. 10 per sq.ft. It is significant that R.W. 1, has stated that the building in question has been constructed of teak and palmyrah rafters as well as cement mortar and mud mortar and that there is no specification regarding this type of construction in the rates prescribed by the Public Works Department. Consequently, the Courts below were right in having fixed the cost of construction at Rs. 15 per sq.ft. which appears to be just and reasonable under the circumstances of the case.

8. Yet another objection raised by the tenant was that the cost of the site had been fixed excessively at Rs. 4 per sq.ft. It may be immediately pointed out that the Appellate Authority had, in paragraph 6 of its order, stated that there has been no dispute between the parties regarding the cost of the site and that both parties agreed to the rate fixed by the Rent Controller in the light of Exhibit A-1 at Rs. 4 per sq.ft. It is therefore, not open to the tenant to raise or persist in this objection any longer.

9. As regards the total extent of the property which is 22,057.5 sq.ft. as well as the age of the building which has been fixed at 50 years, here has been absolutely no dispute between he parties even now. In view of the conclusion arrived at with reference to the nature of the cement drying yard, it becomes necessary that that has to be included in the computation of the fair rent in respect of the building. Therefore, the order of the Appellate Authority fixing the fair rent has to be set aside and the matter remanded to the Appellate Authority for refixation of the fair rent in the light of the observations contained herein. Accordingly, the civil revision petitions are allowed and C.M.A. No. 317 of 1976 and C.M.A. No. 330 of 1976 are remitted to the Appellate Authority (Sub-Court, Madurai) for being disposed of in accordance with the observations contained in this judgment. It is made clear that the remit order is only for the limited purpose of working-out the details in the light of the observations contained in this judgment and for purposes of recomputing the fair rent on the altered basis. There will be no order as to costs.


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