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Hind Estate Ltd. Vs. Grant James Ltd. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKolkata High Court
Decided On
Case NumberCivil Revn. Case Nos. 3265 and 3267 of 1951
Judge
Reported inAIR1953Cal20,56CWN566
ActsCode of Civil Procedure (CPC) , 1908 - Order 41, Rule 33; ;West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 - Sections 5, 9 and 9(2)
AppellantHind Estate Ltd.
RespondentGrant James Ltd.
Appellant AdvocateManindra Nath Ghosh, ;Sibdas Ghosh and ;Anil Kumar Sett, Advs.
Respondent AdvocateSudhangsu Kumar Sen, Adv.
Cases ReferredIn Chamberlain v. Farr
Excerpt:
- chakravartti, j. 1. these are two rules directed against an order dated 29th august 1951, passed by sri syamadas chatterjee, first additional subordinate judge, alipore, modifying a common order dated 8th january 1951, passed by the additional rent controller, sri k. p. chattoraj, by which he fixed the standard rent for two tenancies on applications made by the respective tenants. the petitioner in the rules before us is the landlord. 2. the tenancies are in respect of two suites of rooms in premises no. 220/1, lower circular road, which appears to be a large and luxuriously constructed building. in the case out of which rule no. 3265 arises, the tenant is grant james limited and the suite occupied by the company is situated on the fourth floor and consists of four living rooms with.....
Judgment:

Chakravartti, J.

1. These are two Rules directed against an order dated 29th August 1951, passed by Sri Syamadas Chatterjee, First Additional Subordinate Judge, Alipore, modifying a common order dated 8th January 1951, passed by the Additional Rent Controller, Sri K. P. Chattoraj, by which he fixed the standard rent for two tenancies on applications made by the respective tenants. The petitioner in the Rules before us is the landlord.

2. The tenancies are in respect of two suites of rooms in premises No. 220/1, Lower Circular Road, which appears to be a large and luxuriously constructed building. In the case out of which Rule No. 3265 arises, the tenant is Grant James Limited and the suite occupied by the Company is situated on the fourth floor and consists of four living rooms with mosaic floor and colour-wash walls, two bath rooms with necessary fittings, one passage room, one verandah and one kitchen. The total floor space is 1256 sq. ft. In the case out of which Rule No. 3267 arises, the tenant is one Mr. M. M. Berger and the suite occupied by him is situated on the third floor, consisting of the same number of similar rooms, but slightly less spacious. The total floor space occupied by this suite is 1204 sq. ft. The contract rent in the case of each of these tenancies is RS. 225 per month.

3. The landlord of the tenants is Hind Estate Limited, which, in its turn, is a lessee of the building, holding, it is alleged, under a lease which covers premises No. 220/1, Lower Circular Road and several other buildings.

4. Both the tenants made applications for the standardisation of their rents on 19-9-1950, through a common Pleader and from the contents of their applications and the language in which they are expressed, it would seem that they were acting in concert. The only allegation made in the applications was that the landlord company had obtained a lease of several buildings, including premises No. 220/1, Lower Circular Road, at a consolidated monthly rent of RS. 2400 whereas it was realising about RS. 2000 from premises No. 220/1, Lower Circular Road, alone. It was added that the rents charged in respect of the tenancies were exorbitant and considerably higher than the rents paid for similar premises in the locality. The suggestion made by the applicants themselves was that the fair rent would be RS. 100 per month in each case.

5. It would appear that all that the applicants wanted by their applications was that in view of the rent paid by their immediate landlord, the rent paid by themselves should be scaled down in accordance with the provisions of para. 4 of Schedule A to the West Bengal Premises Rent Control Act, 1950. The actual prayer, however, was in a general form for standardisation of the rent and the applications were styled as applications 'under Section 9 of the Act, read with para. 4, Schedule A.'

6. The written statement filed by the landlord Company is a study in avoidance and prevarication. It simply stated that the rent payable in respect of the tenancies was not excessive, that the deed of lease referred to by the applicants would speak for itself and that the Company had to pay various other impositions in addition to the rent of Rs. 2400 in respect of the lease taken by itself.

7. The case was sent to the Additional Rent Controller for disposal and on 29-9-1950, he made an order for an inspection of the whole building. The Inspector, however, was unable to obtain access to all the suites and on his reporting his difficulty to the Additional Rent Controller, the latter made an order on 7-12-1951, directing the landlord Company to produce its lease and also to supply the names of the sub-tenants so that the applicants might take out notices against them under Section 31 of the Act for allowing an inspection. No lease or copy of the lease was ever produced, nor were the names of the sub-tenants supplied. On the other hand, the Company failed to appear at all on the next two dates of hearing and when at last a Pleader appeared on its behalf on 3-1-1951, it was only to ask for a long adjournment. The Additional Rent Controller had occasion to remark that the landlord Company was deliberately trying to obstruct the standardisation of rent and to delay the disposal of the proceedings. No strictures were ever better deserved.

8. The Additional Rent Controller disposed of the cases on 8-1-1951, and fixed the standard rent in each case at Rs. 100 per month. That he did by determining the standard rent payable by the landlord Company in respect of each of the premises and adding thereto a further six and a quarter per cent, thereof under the provisions of para. 4 of Schedule A to the Act. In determining the standard rent payable by the landlord Company, the Additional Rent Controller proceeded by way of ascertaining the reasonable rent from the rent prevailing in the locality in respect of similar premises.

9. From that decision of the Additional Rent Controller, the landlord Company preferred two appeals. The learned First Additional Subordinate Judge of Alipore, who came to deal with the appeals, thought that the total floor space occupied by the suites should be ascertained and also that the Inspector should be examined. In the view, he remanded the case to the Additional Rent Controller in order that the floor space might be ascertained and an examination of the Inspector held. The Additional Rent Controller complied with those directions in due course and returned his findings to the learned Additional Subordinate Judge. Those findings are to be found in an order dated 20-8-1951.

10. 'When the cage was pending before the Additional Rent Controller on remand, the landlord Company made an application for the acceptance of the lease as additional evidence, but not without protesting that the Rent Controller had no jurisdiction whatever to require it to produce the lease and that it was being compelled to submit to an illegal requisition. The Assistant Rent Controller rejected the application in the view that at that stage he had no use for the lease and that the case had been remanded to him for a very limited purpose, which did not include reception of additional evidence.

11. On receipt of the further findings of the Additional Kent Controller, the learned Additional Subordinate Judge finally disposed of the appeals. He upheld the standard rent fixed for the landlord Company by the Additional Rent Controller, but disallowed the addition of a further six and a quarter per cent, in the view that para. 4 of Schedule A did not apply to the case by reason of the provisions of Section 5 of the Act. He, therefore, reduced the rent to Rs. 94-2-0 in each case, although what he had before him was only an appeal by the landlord and no appeal or cross-objection by either of the tenants. It is against that order of the learned Additional Subordinate Judge that the present Rules were taken out.

12. At the very outset, we intimated to the learned Advocate appearing for the landlord Company that the jurisdiction under Section 32 (4), West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, was only discretionary and his client could hardly expect this Court to exercise it in its favour, in view of its persistent refusal to co-operate with the Court by producing a document which was in its possession and by furnishing information which lay within its special knowledge. Mr. Ghosh made no attempt to defend the conduct of his client, hut submitted that if after hearing him, we are satisfied that a case for re-trial had been made out, he would ask for an order of remand on behalf of his client on paying all costs of the opposite parties, so far incurred. He also assured us that if the cases were remanded, such recalcitrance on the part of his client as had occurred in the past, would not occur again. In view of that assurance given to us and also for the reason that both the orders complained of appeared to us to be erroneous, we decided to deal with the cases on the merits.

13. The principle according to which the authorities below assessed the standard rent in these cases is common to both of them, but as there are certain special points about the judgment of the Additional Subordinate Judge, I shall deal first with that judgment. As I have stated, he had before him only two appeals by the landlord and yet he reduced the rent in favour of the tenants. He also purported to hold that para. 4 of Schedule A did not apply, although he himself held that the lease was not in evidence and was nowhere to be found. It is clear that the learned Judge committed at least two palpable errors.

14. The learned Judge rejected the contention of the landlord appellant that the Additional Rent Controller had wrongly refused to accept in evidence the lease filed by it. He observed that no lease had ever been filed and he had been unable to discover any lease, although he had closely examined the record. He added that there was nothing in the case to show that the attention of the Additional Rent Controller was ever sought to be drawn to any lease filed. It is not easy to understand what record the learned Judge 'closely examined,' As I have stated already, when the case was sent back on remand, the landlord company made an application to the Additional Rent Controller for reception of the lease as additional evidence and that application, together with the original lease annexed, is to be found on the file. It is perfectly clear that what was argued before the learned Judge was that the Additional Rent Controller had been wrong in refusing to accept the lease as additional evidence. He misappreciated that argument and his examination of the record also appears to have been very cursory, although he calls it very close.

15. On the merits of the case, the learned Judge, as I have already stated, held that the landlord was not entitled to the addition of a six and a quarter per cent to the standard rent payable by him, because, in view of the provisions of Section 5 of the Act, para. 4 of Schedule A would not apply to the case. Section 5 of the Act deals with leases executed after 1st December 1941, which are leases for not less than 15 years and not terminable at the will of the landlord. If, as the learned Judge himself states, the lease was nowhere to be found, it is impossible to see wherefrom he got the terms of the lease on which be purported to act and by which alone Section 5 of the Act would be attracted.

It is true that Mrs. M. M. Berger, in her evidence, made some reference to the terms of the lease but, quite apart from the question as to whether the terms of a written lease could be proved by oral evidence, Mrs. Berger did not make any reference to any condition contained in the lease that the landlord would not be able to terminate it at his will during its currency. There was thus clearly no foundation for the view taken by the learned Judge,

16. The next thing which the learned Judge proceeded to do WHS to give effect to his view of the landlord's lease and to reduce the rent in the manner I have already stated. Under what provision of the law he did so, it is difficult to understand. Section 32 (3) of the Act provides that appeals from orders of the Rent Controller shall be treated as appeals from orders under the Code of Civil Procedure. Order 43, Rule 2, Civil P. C., purports to lay down the procedure applicable to appeals from orders, but it merely says that the provisions of Order 41 shall apply. In Order 41, the only provision relevant to the present question is Rule 33 which empowers the appellate Court to modify the decree in favour of all or any of the respondents who may not have appealed or filed a cross-objection.

It is, however, firmly established, at least so far as this Court is concerned, that Order 41, RULE 33 applies only to cases where one or some at least of the plaintiffs or defendants have appealed and in such a case the appellate Court can interfere in favour of any or all of the non-appealing respondents or respondents who have not preferred any cross-objections. Where there is a single respondent and he has not appealed, nor has he filed any cross-objection, Order 41, RULE 33 does not empower the appellate Court to interfere in favour of such a respondent. If authority for this proposition is needed, it will be found in the cases of Dinanath Chandra. v. Sm. Sudhanyamoni Dasi, 39 Cal. W. n. 420 and Farok Ahmed Meah v. Lalit Mohan, 69 Cal. l. J. 385. One should have thought that this proposition had now become a commonplace of judicial procedure, but it appears that it still requires to be repeated.

17. Proceeding now to the order of the Additional Rent Controller, I need only to deal with the principle adopted by him in assessing the standard rent which the learned Additional Subordinate Judge also approved. Both of them proceeded on the footing that for cases where the applicant for the standardisation of rent is a sub-tenant, para. 4 of Schedule A prescribes the method of assessment and that, according to that method, the standard rent payable by the tenant under whom the sub-tenant holds has first to be determined and thereafter six and a quarter per cent thereof must always be added which will give the standard rent payable by the sub-tenant. The authorities below have also proceeded on the footing that in ascertaining the standard rent payable by the intermediate tenant, it is proper to refer to the rent prevailing in the locality for similar premises and ascertain the standard rent therefrom.

As I had occasion to point out in Hind Estate Ltd. v. Ansar Ahmed, civil Revn. No. 3266 of 1951, decided on 2lst April last, it is altogether erroneous to suppose that para. 4 of Schedule A prescribes a method of assessment for cases where the applicant for the standardisation of rent is a sub-tenant. That paragraph only prescribes the maximum limit which the standard rent fixed for the sub-tenant must not exceed. It comes into operation only after the standard rent has been fixed by the application of principles to be found in other provisions of the Act and it is to be applied by way of a check in order to see that the standard rent otherwise determined, does not go beyond the maximum prescribed by the paragraph. If it does exceed that maximum, it has then to be scaled down. But the paragraph does not provide or require that if the standard rent, otherwise determined, falls below the maximum prescribed by para. 4, it has to be scaled up so that it may reach the prescribed maximum limit. In so far as the authorities below purported to make the assessment itself under para. 4 of Schedule A, they were obviously in error.

18. The whole approach of the authorities below to the task of fixing the standard rent of the sub-tenant in the present cases was thus fundamentally erroneous. It was also erroneous as respects the method followed in determining the standard rent payable by the intermediate tenant.

19. It is regrettable that even after the Rent Act of 1950 has been in operation for more than two years, it should still be necessary to point out that the Act prescribes no one method of determining the standard rent, but provides a variety of methods to be followed respectively, in a variety of circumstances. The first task of the Rent Controller is, therefore, to ascertain what the special facts of the case are and then to see which of the many provisions of Section 9 or Schedule A is attracted. The enquiry must begin from the basic rent. For the purposes of ascertaining the basic rent, it must first be seen whether the standard rent wag previously fixed at any time and if it was whether more than three years have elapsed from the date when it was so fixed. If the standard rent was fixed on a previous occasion, the amount fixed has got to be adopted as the basic rent and then the standard rent for the present occasion is to be determined by applying RULE 2 of Schedule A in the case of residential tenancies and RULE 3 in the case of non-residential or mainly non-residential tenancies.

If no standard rent was fixed on any previous occasion, then the first enquiry must be whether the premises were built after 31-12-1948. If they were built after that date, the standard rent must be fixed by reference to the method prescribed in Rule 9 (1) (f), but if the premises were already in existence in December, 1948, the next enquiry must be whether they were in existence on 1-12-1941, and if they were in existence on that date, whether they were then let out to a tenant. If it is found that the premises did exist on 1-12-1941, and were let out to a tenant, the next enquiry must be, what was the rent which the premises then bore.

If that rent can be ascertained, the amount of the rent should be taken as the basic rent and further additions must be made thereto for the purposes of determining the standard rent in accordance with the provisions of Rule 2 or Rule 3 of Schedule A, as the case may be. If, however, the premises were not in existence on 1-12-1941, or having been in existence, were not let out, then the Bent Controller must proceed under the provisions of Section 9 (1) (e) and ascertain at what rent the premises, if let out in December, 1941, could reasonably have been so let. The amount of the rent, so ascertained, would be the basic rent in such a case and the Rent Controller is then to apply the provisions of Schedule A for the purposes of determining the standard rent, although the Schedule would not in terms apply.

If it is found that the premises did exist in December, 1941, and were also let out to a tenant, but the rent at which they were let out cannot be ascertained, then the Rent Controller is to proceed under Section 9 (2) and determine what the rent may have been at which the premises were, in all probability, let out in 1941. After ascertaining that amount, he has to take that as the basic rent and then work out the standard rent by reference to the provisions of RULE 2 or RULE 3 of Schedule A, as the case may be. 'Where none of the other provisions of Section 9 applies, the Rent Controller is to proceed under the provisions of Section 9 (1) (g). It is only in cases coming under Section 9 (2) and probably also in those under Section 9 (1) (e) and 9 (1) (g) that enquiry about the prevailing rent is permissible and pertinent.

20. The above, in brief, is the scheme of the Act and the Rules which I have summarised, only incompletely, apply equally to the case of a tenant and that of a sub-tenant. It is by reference to these Rules that the standard rent payable by a sub-tenant must first be determined and only after it has been so determined, is the propriety of the amount to be checked by reference to the limit laid down in para. 4 of Schedule A.

21. It is perfectly clear that in the present eases, neither the Additional Rent Controller, nor the Additional Subordinate Judge paid any attention to any of these rules. They proceeded straightaway to make an enquiry about the rent prevailing in the locality, without ascertaining whether the premises had been constructed after December, 1948 or whether they existed in 1941 or whether if they had existed, they bad been let out. They also thought it right to refer to the rents paid by occupants of individual flats directly to owners for the purpose of ascertaining the standard rent payable by an intermediate tenant who held under a lease covering the entire building and also other buildings.

As I have already said, the applicants themselves in their applications stated none of the material facts. It will probably not be right to insist on the strict rules of pleading in a case under the Rent Control Act, but if a tenant will not plead, he must at least prove the facts which are necessary for him to establish if he is to succeed. In the present case, the necessary facts were neither pleaded nor proved and, as I have pointed out, the method adopted by both the authorities below in determining the standard rent was altogether erroneous.

22. As in Hind Estate Ltd. v. Ansar Ahmad, civil Revision case No. 3266 of 1951, to which I have already referred, so in these cases, a question was raised as to the effect of Section 5 on para. 4 of Schedule A. Section 5, as I have already stated, provides that no provisions of the Act shall apply to leases taken after 1-12-1941 which are leases for not less than 15 years and which are not terminable at the will of the landlord. If no provisions of the Act apply to such leases, it seems to be reasonably clear that there can be no question of any standard rent in respect of them, since the standard rent is a creature of the Rent Act. Paragraph 4 of Schedule A, however, requires the Rent Control Authorities first to determine the standard rent payable by the intermediate tenant in respect of the premises concerned. But if such intermediate tenant be a tenant holding under a lease which comes under Section 5, difficulty obviously arises as regards determining the standard rent payable by him. The question raised in these cases was in what way that difficulty was to be solved.

23. The Act contains two provisions, laying down in respect of two kinds of leases, that nothing in the Act shall apply to them. One provision is a proviso to Section 3 which deals with leases granted before 1-12-1941, which are leases for a specified period, but the period of which has not yet expired. The other provision is Section 5 which deals with lease of the particular kind which, I have already referred to, granted after 1-12-1941. Paragraph 4 of Schedule A provides for the case where the intermediate tenant holds under a lease coming under the proviso to Section 3, but it makes no reference to a case where the lease may be one coming under Section 5. Whether this absence of a reference to Section 5 in para. 4 of Schedule A is an inadvertent omission which a Court would be entitled to make good by way of a judicial interpretation of the paragraph or whether the omission is a deliberate one, made in pursuance of a legislative policy, is a question which requires careful consideration.

Even if it be not possible to import Section 5 into para. 4 of Schedule A by way of supplying an omission it may still have to be considered whether the omission cannot be filled up by applying the provisions of Section 9 (1) (g). That section provides that where no provision of the Act for fixing the standard rent applies to any premises, the standard rent would be determined at the rate which is fair and reasonable. It is at least a question whether, if the standard rent of lease coming under Section 5 cannot be determined otherwise, it cannot still be determined by applying the provision of Section 9 (1) (g). But the obvious objection to that solution is that if nothing in the Act applies to a lease coming under Section 5, Section 9 (1) (g) does not apply either.

24. I may, however, point out that even if para. 4 of Schedule A cannot be applied in cases where the intermediate tenant holds under a lease coming under Section 5, the only effect will be that in such cases the standard rent fixed for the sub-tenant by applying the provisions relevant to his case cannot be checked by reference to the maximum prescribed in the paragraph. There can be no other effect flowing from the omission.

25. I have indicated some of the difficulties attaching to this question, but I do not consider it necessary to decide it finally, inasmuch as it is not yet known whether it will require decision in the present case. As I have pointed out, the lease is not yet in evidence and we do not know whether it is really a lease for 99 years, executed after 1-12-1941, and whether it is or is not terminable at the will of the landlord. When those particulars are ascertained, if they are, and in case the lease is proved, this question will have to be gone into by the proper authorities.

26. For the reasons I have given, however, the orders of the authorities below must be set aside, but on terms. We accordingly direct that on the landlord petitioner depositing with the Additional Rent Controller within two weeks of the arrival of the record in the tribunal a sum of RS. 250 in each case to the credit of the tenant concerned, these Rules shall be treated as made absolute. The orders complained of shall stand reversed and the Additional Rent Controller shall proceed to hear and determine the cases in accordance with law. In case such deposits are made, the tenants opposite parties will be entitled to withdraw and retain the amounts concerned as costs, irrespective of the final result of the cases. If the deposits are not made within the time mentioned above, these Rules shall stand discharged with costs, hearing fee being assessed at three gold mohurs in each case.

Sinha, J.

27. These are two rules issued upon the opposite parties to show cause why the orders complained of should not be set aside. In both the applications, Messrs. Hind Estate Limited, a company incorporated under the Indian Companies Act, is the petitioner. In the first case, the opposite party is also a company, whereas in the second ease the opposite party is an individual of the name of M. M. Berger. Both the Additional Rent Controller and the 1st Additional Subordinate Judge, 24-Parganas have disposed of the two cases by one judgment. I am unable to see how or why this was done. It may be that the subject matters for determination are similar but that can scarcely be an appropriate reason for consolidating two cases where the parties are entirely different.

28. Rules were issued in these two cases as well as in case No. 1949-B of 1950 (C. r. No. 3266 of 1951) and it was directed that these rules should be heard together. At the invitation of the parties, however, these two rules have been heard together and the third rule separately. The facts in these two rules are briefly as follows:

(His Lordship after stating the facts preceded:)

29. The orders challenged as also the contentions of the respective parties as pressed before the Rent Controller and the learned Subordinate Judge, show a total lack of appreciation as to the provisions of the said Act, regarding the fixation of the standard rent in respect of residential premises. I am however tempted to repeat the well known observation of Lord Justice Mackinnon in Vaughan v. Shaw, 1945 K. b. 400 at p. 401, which is well applicable to the particular piece of legislation which we have to consider in this case.

'This is yet another . . . problem arising from that welter of chaotic verbiage which may be cited together as the Rent and Mortgage Restriction Acts 1920 to 1939. We have had our attention called to a great number of passages in this obscure mass of words and it is obvious that this is an extremely, obscure and difficult point.... It seems to me that the learned Judge was wrong--venially wrong--because a nobody may be forgiven for making a mistake about this series of Acts . . .'

30. Here also we have had a series of Acts ami-Ordinances regulating the relations between a landlord and his tenant, and the law on the subject is constantly changing. It would therefore not be surprising that there should exist some confusion regarding the subtler points involved in it, but what is surprising is that the Rent Controller, who must be constantly fixing the standard rent in thousands of cases should be quite unaware of the principles upon which it should be calculated. It is therefore necessary to explain as to how the standard rent should be calculated and to see how the Rent Controller and the learned Subordinate Judge having actually calculated the same and the error into which they have fallen. Standard rent has been thus defined in the West Bengal Premises Rent Control Act, 1950, Section 2 do):

' 'Standard rent' in relation to any premises means,

(a) the standard rent determined in accordance with the provisions of Schedule 'A'.

(b) where the rent has been fixed under Section 9, the rent so fixed; or at which it would have been fixed if application were made under the same section.'

31. Coming to Section 9 of the Act we find that the standard rent is to be fixed by the Rent Controller upon an application by the landlord or the tenant, in accordance with the principles stated therein. In fact the Section says '... Controller shall, on application by the landlord or tenant, fix the standard rent as set forth hereunder.' In this matter, the Rent Controller has no discretion, and is not at liberty to disregard the rules of computation laid down by the Act. In fact the Advisory Committee's report states as follows:

'In the matter of fixation of standard rent under Section 9 we consider it necessary for inspiring public confidence to restrict the discretion given to the Controller by making specific and precise provisions as to the rate of increment in many cases . . . The amendments lay down definite methods of fixing standard rent in different cases instead of leaving matters to a great extent to the discretion of the Controller about which considerable dissatisfaction came to our notice during taking of evidence and which we consider to be not unfounded.'

32. Section 9 (1) (a) of the Act lays down that where the provision of Schedule V applied and there is no cause for alteration by reason of any of the circumstances mentioned in Clauses (b), (c), (d), (e) & (f), then the standard rent must be determined in accordance with Schedule 'A'. Where it does not apply and there is no-provision in the Act applicable to the computation, then alone it must be determined at a rate which is fair and reasonable (el. g.). Coming to Schedule 'A', we find that it contains four rules. Rule 1 defines the term 'Basic rent', RULE 2 defines 'standard rent' as used in connection with residential premises and Rule 3 defines 'standard rent' as used in connection with non-residential premises. In both cases it means the basic rent plus a certain specified sum.

Rule 4 lays down that where any premises had been sub-let, the standard rent of the sub-tenant should not exceed the standard rent payable by the tenant by six and a quarter per centum. Rule 4 is therefore not a method of computation of the standard rent but merely lays down a limit beyond which the tenant cannot charge his sub-tenant. This was introduced to stop trafficking in rents, as people are always found ready to exploit the misery of poor sub-tenants and to make a profit out of taking leases at low rents and in turn letting the properties out at disproportionately high rents. As will be found presently, the Rent Controller completely lost sight of this and thought that the assessment of the standard rent of sub-tenant must itself be done under Rule 4 of Schedule 'A'.

33. Analysing the provisions of Schedule 'A', RULE l & 2, we find as follows:

Basic rent as defined by Schedule 'A' means:

(a) The rent fixed by the Controller under the Bengal House Rent Control Order, 1942, or the Calcutta Rent Control Order, 1943, or the Calcutta Rent Ordinance, 1946.

(b). If the rent has never been fixed under any of the provisions aforesaid, then the rent which was payable for the premises on 1-12-1941.

(c) If the rent has never been so fixed, but increased between 1-12-1941 and 1-4-1950 (when the Act came into operation) then the increased rent which was last paid, but so as not to exceed the rent payable on 1-12-1941 by more than 10 per cent, in respect of premises within Calcutta and 20 per cent, in case of other premises.

34. 'Standard rent', in the case of premises used for residential or mainly residential purposes is basic rent + 5 per cent of basic rent where it does not exceed Rs. 100 per month or basic rent+10 per cent, of basic rent where it exceeds Rs. 100, provided however that the increased percentages mentioned above will not be added, in case where the rent had been fixed under any of the enactments mentioned in Rule 1 (a) until after the expiration of three years after such fixation; or where rent has not been so fixed but increased between the 1-12-1941 and 1-4-1950, until the expiration of three years from the date of the first payment of the increased rent.

These are the principal rules to be followed in computing the standard rent, but it is conceivable that certain difficulties may still arise and these have also been provided for. For example, if it is found that the premises have not at all been let out on 1-12-1941 or only let out in part, or where it has been let out at a nominal rent or for some consideration other than money rent or in addition to money rent. These contingencies have been provided for in Section 9 (1) (e). In such cases, the standard rent is fixed at a rate in accordance with Schedule 'A,' taking the rent which would have been reasonably payable for the premises if let on 1-12-1941, as basic rent under the said Schedule.

35. But it may so happen, that the Controller is required by the Act to determine, the rent at which the premises were let out on 1-12-1941 but it is not reasonably practicable to obtain sufficient evidence for determining the said rent. This contingency has been provided for in Section 9 (2). In such a case, the Controller must determine approximately the rent at which in reasonable probability the premises were let on the date, ami the rent so determined shall be deemed to be the rent at which the premises were let on 1-12-1941. In such a case, two important rules are to be followed by the Rent Controller. (1) That in arriving at such a computation he may have regard to the standard rent of similar premises in the neighbourhood and (2) he may make presumption either against the landlord or tenant who in his opinion is in a position to produce relevant evidence but is refraining from doing so.

36. Lastly, we may have a case where no provision of the Act applies, for example where the premises itself came into existence after 1-12-1941 but before 31-12-1949. In such cases, the provision of Section 9 (1) (g) applies and the Controller would have to determine the rate which is fair and reasonable. If the premises have been wholly or substantially constructed after 31-1-2-1949, then the standard rent is fixed in accordance with the rules laid down in Section 9 (1) (f). Therefore, the correct approach to be made in computation of the standard rent must be as follows :

(1) Find out whether any provision of the Act for fixing standard rent applies. If no such provision applies proceed under Section 9 (1) (g).

(2) If there is any provision of computation as' laid down by the Act which is applicable, find out whether Schedule 'A' applies. Schedule 'A' will not apply, if the premises have not been let out on 1-12-1941 or being let rent free on nominal rent or for some consideration other than money rent or in addition to money rent. In such a ease proceed under Section 9 (1) (e).'

(3) If Schedule 'A' applies, or if Section 9 (1) (e) applies calculate the 'basic rent' according to the method laid down in Rule (1) of Schedule A or Section 9 (1) (e) as the case may be.

(4) In cases (2) and (3), calculate the standard rent according to the provisions of RULE (2) Schedule 'A' in case of premises used for residential or mainly residential purposes and Rule (3) in case of premises which are used or mainly used otherwise than for residential purposes.

(5) After fixation of standard rent in accordance with the above rules, the same must be further altered or modified if circumstances exist as are stated in the following sub-sections of Section 9 (1) of the Act, viz., (b) Increase of Municipal taxes, rates or cesses), (c) (addition, alteration or improvement made by the landlord, not being tenantable repairs only) and (d) (supply of furniture), in accordance with the provisions of these rules.

(6) If the premises have been wholly or substantially constructed after 31-12-1949 proceed to fix the standard rent under Section 9 (1) (f).

(7) In the case of premises which have been sub-let, the standard rent of the sub-tenant will be computed according to the above rules, but there is a ceiling laid down in such cases and this is provided for in Rule 4 of Schedule A. The standard rent in such a case must not exceed this figure and the calculation must be checked with this ceiling and the excess eliminated. Such a calculation necessarily involves the computation of the 'standard rent' of the tenant, as well. If such a computation cannot be made as a matter of law then this rule cannot be applied.

37. Now let us see what procedure was followed by the Rent Controller and the learned Subordinate Judge in computing the standard rent. The first thing that the Rent Controller did was to employ an inspector to inspect the premises and report, which he did. The inspector has given the accommodation of the whole premises and the accommodation, measurement and amenities of the suites occupied by the tenants. The inspector was not allowed access by all the other tenants in the premises, hence I do not see how his report or his evidence subsequently given regarding the accommodation relating to the entire premises is reliable.

In view of this difficulty in measuring the entire premises, the Rent Controller called for the original lease, but it was not produced. The Rent Controller then at once went to RULE 4 of Schedule 'A.' He said that he must first ascertain the standard rent of Messrs. Hind Estate Ltd. and then ascertain the proportionate share of it of the subtenants (petitioners before him) and then add 6 1/4 per cent, to it. For purposes of finding out the standard rent of Messrs. Hind Estate Ltd. he took help of EX. 1, which shows the standard rent as fixed of a tenant occupying a suite in a portion of premises No. 220, Lower Circular Road.

38. It is obvious therefore that he totally ignored the rules for calculating the standard rent. He did not consider whether any of the provisions of the Act applies for computation of standard rent. He assumed that Schedule 'A' applies and goes straight to Rule 4 which is not a rule meant for computing the standard rent at all. He then turns from Rule 4 to nothing at all except perhaps what he considers as a reasonable method, and makes a computation without even thinking as to whether it was necessary or possible to determine the rent paid on 1-12-1941 or an approximate and reasonable rent paid on that date or as to whether any of the other sub-rules of Section 9 applied to the case. No attempt whatsoever was made to find out the basic rent.

Apart from the defects mentioned above, the computation is wrong on the face of it. A comparison is made with the standard rent of a tenant occupying only a portion of premises No. 220 Lower Circular Road, in order to find out the standard rent of Messrs. Hind Estates Ltd. with regard to the entire premises No. 220/1 Lower Circular Road, (consisting partly of residential and partly of non-residential tenancies) which is clearly wrong. It is therefore mystifying, how the Rent Controller ever came to the figure of RS. 94-2-0. He then added to it 6 1/4 per cent, and came to the round figure of Rs. 100. This figure is based on no principles or rules and is clearly incorrect.

Learned Advocate appearing for the respondents did not attempt to justify the method of calculation by reference to the Act but said this kind of calculation is invariably made by the Rent Controller in computing standard rent. If so, this is an amazing state of affairs. If any principle is well settled, it is this that where the rent on the prescribed date could be ascertained, it was not permissible to take into account the standard rents of similar houses in the neighbourhood. In Chamberlain v. Farr, (1942) 2 ALL E. R. 567, Lord Greene M. R. observed as follows:

'Whether it was economic rent or not, it was in fact the rent at which the dwelling house WHTTES let on the relevant date. Once there is sufficient evidence to enable the Court to ascertain that rent, the Court is precluded from having regard to the standard rents of similar dwelling houses in the neighbourhood.'

39. The learned Subordinate Judge who heard the appeal also seems to have no clearer idea of the procedure to be adopted in computing the standard rent. It appears that the lawyer for the respondent argued that the Rent Controller did not take into consideration RULE 4 of Schedule 'A.' This was a surprising argument inasmuch as the Rent Controller started his computation upon that rule and that is one of the primary reasons why he went wrong. The learned Subordinate Judge rightly observed that the Rent Controller did consider RULE 4 of Schedule 'A' but then went on to hold that RULE 4 did not apply because of Section 5 of the Act. He then deducted the 6 1/4 per cent- from Rs. 100 and somehow arrived at Rs. 94-2-0. Apart from the fact that he could not scale down the amount in favour of the sub-tenant in an appeal by Messrs. Hind Estates Ltd. while the sub-tenants themselves did not appeal or make any cross-objection, the results of his calculation are themselves quite inaccurate.

The learned Judge also failed to approach the question according to the rules prescribed. As the lease was never produced, far less proved, the learned Judge was not in a position to decide whether Section 5 at all applied or not. Until the lease is proved, there is no reason why Rule 4 should not apply, because the question of Section 5 does not arise at all. It is therefore not necessary in this case to decide the point whether Section 5 applies to the lease in question and if no provision of the Act applies to it, then whether a standard rent of the whole demise can ever be calculated either under Rule 4 of Schedule 'A' or Section 9 (1) (g).

40. In the premises, the conclusions arrived at by the Rent Controller as well as the learned Subordinate Judge are clearly wrong and must be set aside. I agree with the order made by my Lord, including the matter of costs.


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