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Surrinder Mohan Vs. Dharam Chand and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtJammu and Kashmir High Court
Decided On
Case NumberCivil Revn. Petn. No. 111 of 1974
Judge
Reported inAIR1981J& K45
ActsJammu and Kashmir Houses and Shops Rent Control Act - 1966 - Section 8(1); ;Jammu and Kashmir Houses and Shops Rent Control (Amendment) Act - 1972
AppellantSurrinder Mohan
RespondentDharam Chand and ors.
Appellant Advocate I.D. Grover and; A.K. Sawhney, Advs.
Respondent Advocate R.P. Sethi, Adv.
DispositionPetition dismissed
Cases Referred and Shyam Sunder Lal v. Shagun Chand
Excerpt:
- .....vide rent deed dated 1-9-1966. he made an application against the first respondent for fixation of fair rent before rent controller, jammu. during the pendency of this application, the shop on family partition fell to the share of the second respondent who too was made a party to it. in the application urged that the rent was highly exorbitant and every time its enhancement was preceded by a notice for ejectment. the case of the respondent on the other hand was that the rent was enhanced not under any threat or coercion but by mutual agreement of the parties, as the respondent had to spend huge amounts, time and again, on effecting improvements to the shop at the behest of the petitioner. it was further pleaded that considering the business activity in the area (link road. jammu) where.....
Judgment:
ORDER

I.K. Kotwal, J.

1. This revision petition arises in the following circumstances:

The petitioner acquired a shop from the first respondent on a monthly rent of Rs. 30/- by virtue of a rent deed executed on 10-1-1961. This rent was enhanced to Rs. 50/- per month vide another rent deed dated 13-1-1964, and finally to Rs. 80/- per month vide rent deed dated 1-9-1966. He made an application against the first respondent for fixation of fair rent before Rent Controller, Jammu. During the pendency of this application, the shop on family partition fell to the share of the second respondent who too was made a party to it. In the application urged that the rent was highly exorbitant and every time its enhancement was preceded by a notice for ejectment. The case of the respondent on the other hand was that the rent was enhanced not under any threat or coercion but by mutual agreement of the parties, as the respondent had to spend huge amounts, time and again, on effecting improvements to the shop at the behest of the petitioner. It was further pleaded that considering the business activity in the area (Link Road. Jammu) where the shop was situated Rs. 80/- per month was quite a reasonable rent.

2. The shop having been admittedly constructed after the last day of Chet 2005 Bk., the Rent Controller, on consideration of the evidence led by the parties, fixed the fair rent at Rs. 70/-per month under Clause (f) of Section 8 of J. and K. Houses and Shops Rent Control Act. 1966, hereinafter the Act, vide his order dated 10-1-1974. Both the parties feeling dissatisfied with the aforesaid order, challenged the same by way of cross-appeals in the court of District Judge, Jammu. Before the District Judge it was contended on behalf of the petitioner that Schedule A to the Act having been amended during the pendeacy of these proceedings vide Act No. 21 of 1972 and the words and figures '31st December 1964' substituted for the words and figures '1st Baisakh 1998' in Clause (b) of Para 1 of the Schedule, fair rent of the shop had to be fixed under Schedule A and not under Clause (f) of Section 8, as had been done by the Rent Controller. This contention did not find favour with the District Judge, as in his opinion, the amending Act was not retroactive in operation and had, therefore, no application to pending proceedings. For holding so, he drew support from, a Division Bench judgment of this Court in Mulak Raj v. Kapoor Chand, 1970 J & K LR 54 and on reappraisal of the evidence recorded by the Rent Controller vide his order dated 10-10-1974 held that Rs. 80/- per month was the fair rent which had, on the pleadings of the parties to be determined in accordance with the mode provided in Clause (f) of Section 8. It is this order which has been assailed in this revision petition.

3. This petition came up for arguments before me even earlier. At that time it was canvassed on behalf of the petitioner that amending Act No. 21 of 1972 was retrospective in its application and that the view taken by this court in Mulakraj's case (supra) needed re-consideration. I formulated a question : 'is amending Act No. 21 of 1972, retrospective in its operation'? and referred the same to a larger Bench. A Full Bench was constituted to answer the same. .Before the Full Bench, however, it was conceded by the counsel for the petitioner that the amending Act was not retrospective but was only prospective in operation. Consequently, the Full Bench returned the question un-answered vide its order dated 27-2-1980. I had, therefore, to pick up the threads where I had left them at the time of making the reference. I have heard the learned counsel for the parties once again.

4. It is common ground that the shop in question was not in existence on 1st Baisakh 1998, but was constructed some time after the last day of Chet 2005 and was also in possession of a tenant during the period of twelve months preceding 31-12-1964. Mr. Graver's contention is that while the petitioner's application for fixation of fair rent was pending before the Rent Controller, Schedule A to the Act was amended and its application was extended to a shop constructed after 1st Baisakh 1998 which fetched rent during the period of twelve months prior to 31-12-1964, creating a new right in favour of its landlord and tenant to get its fair rent fixed by treating the rent payable for it during the said period of twelve months as its basic rent. The Rent Controller and the District Judge, argued the learned counsel, were bound to take notice of the subsequent legislation and give relief to the parties in accordance therewith. He has, however, frankly conceded that in case Schedule A is held not applicable to the instant case, the petitioner is clearly out of court. Mr. Sethi's contention in reply is twofold. In the first place the amending Act, according to the learned counsel, being admittedly prospective in its operation, it could have no application to pending cases. In the alternative, even if it governed the pending cases as well, still the shop having been constructed after the last day of Chet 2005, its fair rent could be determined only under the provision of Clause (f) of Secttion 8 and not under Schedule A. Two questions which precisely fall for determination are: one. whether the provisions of Act No. 21 of 1972 are applicable to pending cases, and two. in case these are applicable, whether the fair rent of the shop is still to be fixed in terms of Clause ff) of Section 8 when admittedly it has been constructed after the last day of Chet 2005.

5. Ordinarily, Courts will give relief to the parties in accordance with their rights as they stood crystallized on the day of the filing of the lis. But, where it is shown that the relief originally claimed has become inappropriate on account of happening of a subsequent event, or new rights have accrued in favour of the parties due to enactment of a law subsequent to the commencement of the litigation, the court will and indeed will be bound to take notice of the same and mould its decree or order accordingly. This would be a fortiori necessary to shorten the litigation and to do complete justice between the parties. The petitioner, when he made the application, was not entitled to invoke the provisions of Schedule A to his advantage, as it had then no application to his case; the shop under his tenancy having been built after 1st Baisakh 1998. Before, however, the Rent Controller could pass an order fixing its fair rent, the Schedule was amended vide Act No. 21 of 1972 and even a shop constructed after 1st Baisakh 1998 was brought within its purview. Consequently, provisions of Schedule A were made applicable to the shop in question provided other conditions contained in Section 8 did not come in its way. He was bound to take notice of this change in law as would appear from Clause (a) of Sub-section (1) of Section 8 reproduced below:

'(1) In any of the following cases, the Controller shall, on application by any landlord or tenant, fix the fair rent as set forth hereunder :--(a) Where the provisions of Schedule A apply and there is no cause for the alteration of the rate of fair rent as determined according to the Schedule for any of the reasons mentioned in the following clauses, in accordance with the provisions of Schedule A.'

Fair rent in terms of this Clause had to be fixed primarily in accordance with the provisions of Schedule A unless under the circumstances mentioned in the later clauses of Sub-section (1) a different rent would be fixed. The District Judge was not, therefore, right in ignoring the provisions of Act No. 21 of 1972 merely because the petitioner's application for fixation of fair rent had been instituted long before it came into force. (Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subhash Chandra Yograj Sinha, AIR 1961 SC 1596 and Shyam Sunder Lal v. Shagun Chand, AIR 1967 All 214 (FB)).

6. Fair rent of a shop under Schedule A would mean the basic rent plus the increase which is permissible under Para 3 of the Schedule. Basic rent shall be the rent which has been fixed by the Rent Controller under House Rent Control Order, 2000 or the Shop Rent Control Order 2002. In case no rent has been fixed under these orders, then the rent which was payable for the shop during the period of twelve months immediately preceding 31-12-1964, and in case any rent had been fixed under these orders, but the same was enhanced subsequently between the date it was fixed and the date the Act came into force, then basic rent of a shop would be the increased rent last paid so as not to exceed the rent payable during the twelve months prior to 31-12-1964. To quote an example, suppose rent of a shop was fixed by the Rent Controller under the Order of 2002 at Rs. 20/- per month. This rent was not increased till 29-10-1966 i. e. when the Act came into force. The basic rent would be Rs. 20/- per month. Suppose this rent was subsequently enhanced to Rs. 60/- per month by mutual agreement of parties on 1-1-1964, and again to Rupees 80/- per month on 1-1-1965, then the basic rent would neither be Rs. 20/- nor Rs. 80/- but only Rs. 66/- per month, as Rs. 66/- would not increase by more than ten percent of the rent payable during the period of twelve months immediately preceding 31-12-1964. Where in such a case no rent was fixed under these orders, basic rent of the shop would be Rs. 60/- per month. No increase would be permissible under Para 3 in case a period of three years has not elapsed either from the date when the rent was fixed under any of the two orders or from the date the increased rent was first paid. In case this period of three years has elapsed, or where this period is not relevant e.g. where no rent has been fixed under these orders, then fair of a shop would mean its basic rent increased by ten percent where the basic rent per month is Rs. 100/- or less, and increased by fifteen percent where the basic rent is more than Rs. 100/- per month.

7. The procedure for fixing or altering fair rent in respect of any house or shop is provided in Section 8 which comprises of seven Clauses viz: (a), (b), (c), (d), (e), (f) and (g). Clause (a) says that fair rent shall be primarily fixed in accordance with the procedure laid down in Schedule A, unless it has to be altered for the reasons given in the other clauses. The expression 'cause for the alteration of the rate of fair rent' occurring in Clause (a) reproduced heretofore, appears to be of a wider import so as to include not only an increase in the fair rent already fixed but also fixation of the fair rent afreshor for the first time. Whereas Clauses (b), (c) and (d) provide for increase in the fair rent already fixed for the reasons given in these Clauses, Clauses (a), (f) and (g) lay down the procedure for fixation of fair rent afresh or for the first time. Clause (e) deals with a case where for certain reasons it was not possible to fix the basic rent of a house or shop under Schedule A. This Clause is not happily worded because rent payable during the period of twelve months prior to 1st Baisakh 1998 has, after Act No. 21 of 1972. ceased to have any relevance; the words and figures '31st Dec. 1964' having been substituted for the words and figures '1st Baisakh 1998' vide the amending Act. The legislature ought to have introduced a corresponding amendment in Clause (e) of Section 8 as well, nevertheless, the expression 'or for some other reasons' occurring in it makes it still workable. Clause (g) is a residuary clause which lays down that where there is no provision for fixation of fair rent in the Act, the fair rent shall be fixed at a rate which is fair and reasonable. Clause (f) which alone is the sublect of all polemics is reproduced as below:

'Where any house or shop has been wholly or substantially constructed after the last day of Chet, 2005, by fixing the fair rent payable for one year at a rate not less than four percentum and not more than six percentum of the reasonable costs of construction added to the reasonable price of the land included in the house or shop as on the date of the commencement of such construction taking into account the prevailing rate of rent in the locality for similar accommodation with similar advantages and amenities and the comparative advantages or dis-advantages of accommodation in the house or shop : Provided that where the house or shop in respect of which fair rent is to be fixed form a part of the construction the fair rent shall be fixed at a rate which is fairly proportionate to the total fair rent of the entire construction.'

8. Its opening words leave no room for doubt that where a house or shop has been constructed wholly or substantially after the last day of Chet 2005, its fair rent shall not be fixedin accordance with the procedure laid down in Schedule A, but according to the one laid down in the Clause itself. The Act was enacted with three principal objectives in view: one, to provide adequate safeguards against eviction of tenants, two, to ensure that the tenants do not commit default in payment of rent to their landlords, and three, to see that the rent payable was reasonable i. e. it was neither exorbitant nor meagre. It is a common place knowledge that prices by and large remained stable in the country between the years 1998 and 2005. They started rising gradually from the year 2006 onwards and the trend continues unabated. With the country attaining independence in the year 2004, it started being industrialized and with this commercial activities also started increasing. Under these conditions it was perhaps thought necessary to provide an incentive to private owners to raise buildings for rent purposes. Clause (f) of Section 8 was enacted to provide a different mode for fixation of fair rent in respect of a shop or house so that while fixing fair rent under this clause, prevailing rate of rent in the locality was not lost sight of. Whether or not, therefore, provisions of Schedule A applied to a house or shop, its rent had to be fixed in accordance with the provisions of Clause (f), in case, the house or shop had been wholly or substantially constructed after the last day of Chet 2005. This inference is further fortified from the opening words: 'excepting the case covered by Clause (f) following' occurring in Clause (e). The fair rent of the shop in question which has been admittedly built after the last day of Chet 2005 has been fixed in accordance with the provisions of Clause (f). No fault can, therefore, be found with the order of the District Judge, as rightly conceded by Mr. Grover. In the result, the petition fails, which is dismissed accordingly, but in the circumstances of the case without any order as to costs.


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