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W. Rebeiro Vs. Elias E.M. Jacob - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1923Cal553,77Ind.Cas.623
AppellantW. Rebeiro
RespondentElias E.M. Jacob
Cases ReferredWoodward v. Samuels
Excerpt:
calcutta rent act (iii of 1920), sections 2(f)(ii), 15(3) - policy of act--'first letting,' meaning of--sub-lease. - .....the above question.5. the question whether there can be only one standard rent or a number of different standard rents was considered in the case of chapsi umersi v. keshavji damp 60 ind. cas. 960 : 45 b. 744 at p. 752 : 23 bom. l.r. 133, where sitalvad, j., observed: 'the only object to my mind of including in the definition of 'landlord' a tenant, and in the definition of 'tenant' a sub-tenant, is to extend the benefits of the rent act to sub-tenants, but i do not think that it was intended that the standard rent was to be determined by different standards between the original landlord and the tenant, and between the tenant and the sub-tenant. otherwise the tenant, while himself getting the advantage of the rent act, would be able to profiteer as between himself and the sub-tenant.....
Judgment:

N.R. Chatterjea, J.

1. This Rule arises out of proceedings taken by the opposite party under the Calcutta Rent Act for fixing the standard rent of certain premises.

2. It appears that the opposite party took a three years lease of the entire premises No. 40 Ripon Street at a rent of Rs. 150 in July 1919, and on the 4th August 1919 sublet, it, with the exception of three rooms facing Ripon Street at a monthly rent of Rs. 200 exclusive of taxes to the petitioner. Disputes having arisen between the partes, regarding the rent, the opposite party applied to the Rent Controller for fixed the standard rent of the premises held by the petitioner i.e., of the building with the exception of the roadside rooms. The Rent Controller fixed the standard rent of the premises at Rs. 148 per month exclusive of taxes. The opposite party thereupon moved the President of the Improvement Tribunal for revision of the order of the Rent Controller under Section 18 of the Rent Act, and the President held that the sub-letting of the premises (excepting the roadside rooms was the first letting of the premises after November 1918, and fixed the standard rent of the premises in question, as between the opposite party (the lessee) and the petitioner (the sub-lessee) at Rs. 200 exclusive of taxes.

3. Now under Clause (c) of Section 2 the expression 'landlord' includes 'a tenant who sublets any premises'. The opposite party, therefore, is a landlord within the meaning of the Act. The expression 'premises' includes a part of a building let separately. It is accordingly contended on behalf of the opposite party that as between the opposite party who must be treated as the landlord under the Act and the petitioner, the premises includes a part of the building separately let to the petitioner) was first Jet on the 4th August 1919. In construing the provisions of Section 2(f)(ii) the question arises whether it contemplates only one first letting or there may be more than one first-letting as portions of the premises are sub-let from time to time to different persons.

4. For instance a house consisting of two rooms is let out to A in January 1919. A then sublets-one room to B, and the other to C, in February and March respectively. The question is whether the letting of the entire premises to A in January 1919 was the first letting of the rooms, or the subletting in February and March was the first letting with respect to the rooms. The contention of the opposite party is that having regard to the fact that the expression 'landlord' includes a 'tenant who sublets any premises' and 'premises' includes a 'part of the premises', the first letting with respect to D was in February and with respect to C in March respectively. On the other hand it is contended on behalf of the petitioner that the words 'the rent at which the premises were or may be first let' in Section 2(f)(ii) contemplate only one first letting of the premises, and, therefore, in the above illustration both the rooms must be taken to have been first let when the entire premises, were let to A in January 1919. The question of the standard rent depends upon, the determination of the above question.

5. The question whether there can be only one standard rent or a number of different standard rents was considered in the case of Chapsi Umersi v. Keshavji Damp 60 Ind. Cas. 960 : 45 B. 744 at p. 752 : 23 Bom. L.R. 133, where Sitalvad, J., observed: 'The only object to my mind of including in the definition of 'landlord' a tenant, and in the definition of 'tenant' a sub-tenant, is to extend the benefits of the Rent Act to sub-tenants, but I do not think that it was intended that the standard rent was to be determined by different standards between the original landlord and the tenant, and between the tenant and the sub-tenant. Otherwise the tenant, while himself getting the advantage of the Rent Act, would be able to profiteer as between himself and the sub-tenant 'Standard' means a rule or a model and can only be one. The whole object of the Rent Act is to prevent tenants being made to pay rent which the Legislature considers excessive or unreasonable Standard rent must, I think; mean the rent at which the premises wore originally let. The standard rent is to be fixed in relation to premises and not in relation to persons, and can, therefore, be only one, and not varying as between different individuals.' In the case of King v. York (1919) W.N. 59 : 88 L.J.K.B. 839 : 35 T.L.R. 256; the Court of Appeal in dealing with the provisions of the Increase of Rent and Mortgage Interest Act, 1915 said: 'The Act applied to houses, not to persons. The Act operated in rem not in personam. It stereotyped the rent of a house.'

6. The learned President of the Improvement Tribunal differed from the view taken in the Bombay case, and pointed out that in Sub-section (2) of Section 13 of the Bombay Rent Act it is provided that 'in the case of any such subletting as is referred to in Clause (a) of Sub-section (r) the Court shall have regard to the standard rent of the premises a part of which has been or is sublet', whereas there are no provisions corresponding to sub-section (2) of Section 13 of the Bombay Act in Section 15 of the Calcutta Rent Act. That is so that in the first place, the observations of Setalvad, J., were not based upon the provisions of Sub-section (2) of Section 13 of the Bombay Act, and secondly I think that the provisions of Sub-section 3(a) of Section 15 of the Calcutta Rent Act viz., that this Rent Controller may fix the standard rent at such amount as having regard to the provisions of this Act, and the circumstances of the case, he deems just, would include a consideration of the 'standard rent of the premises a part of which has been sub-let.'

7. Then the learned President is of opinion that 'the view taken by Setalvad, J., that the standard rent of a premises which has been let and sublet in succession should be based on the rent of the original letting is opposed to the view taken by the Court of Appeal in Glossop v. Ashley (1922) I K.B. 1 : 90 L.J.K.B. 1237 : 125 L.T. 842 : 85 J.P. 234 : 19 L.G.R. 503 : 65 S.J. 695 : 37 T.L.R. 827, where the rent of the last sub-letting, that is to say, the rent paid by the tenant in actual occupation was taken as the basis for the standard rent.' There was however no question of last letting in that case. A Brewery Company were lessees of a public house, at a rent of 130 on the 3rd August 1914. The Company had sublet the house to the defendant on a quarterly tenancy at a rent of 24 a year by an agreement containing a Clause for the purchase of liquors by the defendant from the Company in August 1916 the lease to the Brewery Company expired and was not renewed, and the defendant Company became tenant to the owners of the house who were the plaintiffs, at a rent subsequently fixed at 30 a year. On March 23rd 1920 the plaintiff's duly gave the defendant notice to quit on June 24th 1920. They also gave him notice that if he held over after that date his rent would be 130 a year. The defendant held over but refused to play rent at a higher rate than 30 a year. The rateable value of the house was 24 16s. and no more. In an action by tae plaintiff's for procession of the house it was held by the Court of Appeal that the defendant having been in occupation of the house on and ever since August 3rd 1914 the standard rent was 24, or at the most 24 16s and not 130. It will be seen that both the lease and the sub-lease were in existence on the crucial date (3rd August 1914). Subsequently the sub-lessee became the tenant under the owners, as the lessee did not renew his lease on the expiry of the term, and the question was whether the rent paid by the original lessee or that paid by the sub-lessee on the 3rd August 1914 was the standard rent.

8. The Court of Appeal thought it undesirable to give to the enactment any general construction, but was of opinion that in that case the rent paid by the tenant in actual occupation on the 3rd August 5914 was the standard rent. It was argued that 'the Statute is speaking not only of the original letting but of every subletting of the dwelling house, and so there may be any number of standard rents and the standard rent in question in any particular case is the rent payable by that tenant to that landlord between whom the dispute has arisen.' On the other hand it was contended that 'the plain intention of the Act is that there should re but One standard rent, namely, the rent payable on August 3rd 1914 by the tenant then in occupation to his immediate landlord.' Bankes, L.J., observed 'in my view there are difficulties in the way of either construction as applicable to every case', and that he was not prepared to hold that in every case the rent raid by the tenant in actual occupation on 3rd August 1914 was the standard rent. Scrutton, L.J., on the other hand seems to have been of opinion that the Legislature contemplated only one standard rent. Atkin, L.J., Was also indeed to take that view, but he did not decide the question. The question, therefore, whether there was only one standard rent or there could be any number of standard rents was not decided, though two of the learned Judges were inclined to take the view that only one standard rent was contemplated. However that may be, there was no question of last sub-letting in that case, as both the lease and the sub-lease were in existence on August 3rd 1914, and the precise question before us did mat arise in that case.

9. In the case of Woodward v. Samuels (1920) W.N. 82 : 89 L.J.K.B. 689 : 122 T. 681 : 84 J.P. 105 the respondent (Samuels) was the tenant of a house at a rent of 45 from a date prior to August 3rd 1914 until 1919 when he purchased it, and converted it into three flats. He made alterations in the house the costs whereof amounted to 35. He then let the flats separately at varying rents making in all 2-18s-6d, equivalent to an annual rent of 153, the landlord paying the taxes and rates. The appellant (Woodward) who in June 1919 became tenant of the first floor claimed that the 22s which he was charged for his flat was in excess of the standard rent provided by the Act of 1915, and applied to the Court for apportionment of the rent of the house between the three flats for the purpose of fixing the standard rent of his flat. The County Court Judge held that as the appellant's flat was first let as a separate dwelling house in June 1919 the rent at which it was then let viz., 22s a week was the standard rent of it, and there was no case for apportionment. On appeal it was held that the case dearly fell within the provisions of Section 2 Sub-section (3) of 5 & 6 Geo. V, c. 97 (which expressly provides for apportionment of the rent), and the decision of the County Court Judge was reversed. The Court observed: 'If a house was pulled down and re-built since August 1914, the standard rent would be the rent at which the new building was first let, but it was otherwise with the conversion of an existing building into flats. If on conversion, one of the flats was to be regarded as a distinct thing from the whole dwelling house, a landlord might, by reserving one room for himself, let the residue of the house at any rent he pleased'.

10. The question is not free from difficulty. But the definition of the expressions 'landlord' and 'premises' might support the construction put forward on behalf of the opposite party only if it is held that the particular portion of the building sublet to the petitioner in August 1919 was not first Jet, when the entire building was let out to the opposite party in July 1919.

11. It is difficult, however, to hold that a portion of a building is not let out when the entire building of which it is a component part islet out.

12. Then again the provisions of Section 15, Sub-section (3), go against the construction relied upon by the opposite party. If the sub-letting of separates the first letting, the rent at which such part is sub-let after November 1918 is the standard rent under Section 2(f)(ii). If so, there would be no necessity of enacting in Section 15(3), that in a case where a tenant has sublet a part of any premises let to him, the Rent Controller 'may fix the standard rent at such amount as having regard to the provisions of the Act and the circumstances of the case he deems just', because according to the contention of the opposite party, the rent at which such part was sublet would automatically become the standard rent under Section 2(f)(ii). The provision of Section 15(3) referred to above would come into operation if the part sublet is taken to have been first let when the entire premises were let out to the lessee.

13. The construction sought to be placed by the opposite party would defeat the object of the Act. There can be no doubt that the Rent Act was intended for the protection of tenants generally and not merely of lessees to the exclusion of sub-lessees, and if tie contention of the opposite party viz., that the words 'first let' in Section 2(f)(ii) should be construed to mean first letting between the tenant and the sub-tenant, be accepted, the object of the Act may be frustrated. An entire premises may be taken on lease by a tenant at a rent, of Rs. 500 a month, and he may sub-let in four flats at a rent of Rs. 500 or for the matter of that, at any rent he pleases for each flat, each of which according to that contention would be a first letting so far as that particular flat is concerned. Having regard to the consideration Stated above and the observations in the Bombay case referred to above, I am unable to hold that when an entire building is let out, a subsequent sub-letting of a part of it is the first letting of such part.

14. Section 15, Sub-section (3), provides for a case such as the present. That section as stated above, gives the power to the Rent Controller in certain cases, among others, in cases where a tenant has sub-let a part of any premises let to him, to fix the standard rent at such amount as having regard to the provisions of the Act and the circumstances of the case he deems just.

15. I am accordingly of opinion that the rent at which the portion of the house was sub-let to the petitioner is not the standard rent, but the standard rent for that portion is to be fixed according to the provisions of Section 15, Sub-section (3). That has been done by the Rent Controller and he has fixed it at Rs. 148. The learned President of the Improvement Tribunal has fixed it at Rs. 200, but he has fixed the rent at Rs. 200 on the ground that that was the rent payable under the first letting, and has not decided the question with reference to the provisions of Section 15, Sub-section (3).

16. The case must, therefore, go back to the learned Preside it so that he may fix the standard rent having regard to the provisions of Section 15, Sub-section (3). Costs, two gold mohurs, to abide the result.

Coming, J.

17. This is an application for the revision of an order passed by the learned President of the Calcutta Improvement Trust Tribunal revising an order nude by the Rent Controller.

18. The facts are these according to the petitioner. In July 1919 the opposite party Mr. Elias Jacob took a three years lease of the entire premises No. 40 Ripon Street on a rental of Rs. 150 a month. On the 4th august 1919 Mr. Jacob let the same premises to the petitioner Mr. Rebeiro with the exception of three rooms in the ground floor for Rs. 200 a month exclusive of taxes. The case of the petitioner is that before November 1918 the rent of the entire premises was Rs. 100 and that that rent was not unduly low. He applied to the Rent Controller and the Rent Controller held that the standard rent of the premises let out to the petitioner should be Rs. 148 having regard to the fact that Rs. 132 would have the fair rent of the entire premises in November 1918 and the opposite party Mr. Jacob had spent soma money in electric wiring. Mr. Jacob applied to the President of the Tribunal for a revision of the order. The President of the Tribunal held that what was let out to Mr. Rebeiro was the house less the three shops and the premises let to the petitioner formed only a part of the entire premises. Therefore he held the letting must be considered as the letting of the particular premises leased to the petitioner and as such the case was a case of first letting and so the rent of Rs. 200 plus occupier's share of the taxes must be considered as the standard rent of the said portion of the entire premises.

19. The sub-tenant Mr. Rebeiro has moved this Court in revision and he contends that the principle followed by the learned President of the Tribunal in assessing the rent is wrong. His contention appears to be as follows. This letting to him was not a case of first letting and does not come under Section 2(f)(ii) of the Calcutta Rent Act. That this letting of the particular combination of rooms cannot be considered to be a first letting. These rooms bad been let out before when the entire premises were let out.

20. The opposite party contend that this is the first letting of this particular combination of rooms. That this particular combination of rooms constitutes a premises under Section 2(c) and that this letting was, therefore, the first letting of these premises. The simple point for decision would seem to be this.

21. Supposing a dwelling house has already been let as a whole would the subsequent sub-letting of a portion of the house be a first letting so far as that portion of the house was concerned.

22. The answer must, I think, be in the negative, for to hold otherwise would be at once to defeat the whole purpose of the Act. The landlord could, by reserving a room for himself or letting it to a third party, let the house at any rent that he pleased and could so arrange by reserving a different room each time he let out the house that every letting of the house would be a first letting.

23. This was the print of view taken by the learned Judges in deciding the case of Woodward v. Samuels (1920) W.N. 82 : 89 L.J.K.B. 689 : 122 T. 681 : 84 J.P. 105. No doubt the decision was under the English Act (5 & 6 Geo, V, C. 97, 1915) but it has not been shown me that as far as this particular point is concerned, there, is any difference between the Calcutta Act and the English.

24. NO doubt in Section 2(e) 'premises' means any building or part of a building and from this it is argued that this particular combination of rooms forms a different premises from the whole building of which it is a part.

25. This no doubt is correct. But when the whole building was let oat this new particular combination of rooms was let out then as part of the whole and so this present letting cannot be considered as a first letting of the premises in question.

26. I, therefore, agree with the order which my learned brother proposes.


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