Rent control Act - Fixation of Fair Rent - in early days it was Rs.500/- per month - Now claimed at Rs.7,000/- per month - Rent controller enhanced to Rs.1200/- Appeal and cross appeal were dismissed on the ground that it was used for clinic in times only and water connection was also disconnected (wrong notions)- their lordships upheld that The rent, which a premises of similar nature would fetch, becomes relevant. It is not in dispute that Jawahar Nagar, is one of the most developed localities in Secunderabad, and what is in occupation of the respondents is the entire ground floor premises, except the garage. The rent of even a flat in that area would be in the range of Rs.10,000/- to Rs.15,000/- per month, at present. It would be in the range of Rs.5000/- to Rs.6,000/- in the year 2001. as it is settled the law that Apex court held that now the rents should be fixed basing on the market value of the property = C.R.P. No.2276 of 2011 04-07-2014 G.S. Ashok and another..Petitioners Dhirajlal Maganlal Shah (died) Per LRs ..Respondents = 2014 - july . part - http://judis.nic.in/judis_andhra/filename=11673

 Rent control Act - Fixation of Fair Rent - in early days it was Rs.500/- per month - Now claimed at Rs.7,000/- per month - Rent controller enhanced to Rs.1200/- Appeal and cross appeal were dismissed  on the ground that it was used for clinic in times only and water connection was also disconnected (wrong notions)- their lordships upheld that The rent, which a premises of similar nature would fetch, becomes relevant.  It is not in dispute that Jawahar Nagar, is one of the most developed localities in Secunderabad, and what is in occupation of the respondents is the entire ground floor premises, except the garage. The rent of even a flat in that area would be in the range of Rs.10,000/- to Rs.15,000/- per month, at present. It would be in the range of Rs.5000/- to Rs.6,000/- in the year 2001. as it is settled the law that Apex court held that now the rents should be fixed basing on the market value of the property =

The petitioners filed
R.C.No.192 of 2001 before the Additional Rent Controller-cum-XVIII
Junior Civil Judge, at Secunderabad, under Section 4 of the A.P.
Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short
the Act) for fixation of fair rent, for the premises, to be at Rs.7,000/-
per month. =
The rent legislations were enacted at a time when there is
acute dearth of accommodation and the owners of the premises
were exploiting the tenants.
The situation has changed drastically
and plenty of accommodation is available.
Change in the
approach of the Courts is also evident from the judgment of the
Supreme Court, in Atma Ram Properties (P) Ltd., v. Federal Motors
(P) Limited ,
wherein the Honble Supreme Court held that
 rent has
to be determined with reference to the value of the property,
duly indicating the formula thereof.  
Though such exercise was in
relation to the rent payable during the pendency of an appeal,
by a tenant, who suffered an order of eviction, guidance can be
received therefrom.
If that formula is applied, the increase in the rent for the premises would be phenomenal.
This Court is of the
view that whatever may have been the inhibition for the Courts in
enhancing the rent to Rs.7,000/- per month, in the year 2001,
at least now, it can be enhanced.
  Hence, the C.R.P is allowed, and the orders under revision are
modified to the effect that the rent for the scheduled premises shall
stand enhanced to Rs.7,000/- per month, with effect from July 2014.
       There shall be no order as to costs.
2014 - july . part - http://judis.nic.in/judis_andhra/filename=11673
THE HONBLE SRI JUSTICE L. NARASIMHA REDDY        

C.R.P. No.2276 of 2011

04-07-2014

G.S. Ashok and another..Petitioners

Dhirajlal Maganlal Shah (died) Per LRs ..Respondents

Counsel for the petitioners: Sri N. Raghavan
       
Counsel for the Respondents: Smt.Manjari S. Ganu

<GIST:

>HEAD NOTE:  

?Cases referred

(2005) 1 SCC 705

THE HONBLE SRI JUSTICE L. NARASIMHA REDDY        

C.R.P. No.2276 of 2011

ORDER:

      The deceased-1st respondent was the tenant in the ground
floor of premises constructed in Plot No.24, Jawahar Nagar Colony,
Hyderabad.  The petitioners purchased the entire building in the
year 2001, and the tenancy of the deceased-1st respondent was
attorned through a letter dated 07-05-2001.  The lease at the
relevant point of time was Rs.500/- per month.  The petitioners filed
R.C.No.192 of 2001 before the Additional Rent Controller-cum-XVIII
Junior Civil Judge, at Secunderabad, under Section 4 of the A.P.
Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short
the Act) for fixation of fair rent, for the premises, to be at Rs.7,000/-
per month.  They pleaded that the premises is located in an
important area, and though it was residential in nature,
the respondents were undertaking non-residential activity, namely,
running of a clinic.  It was also pleaded that before the premises
were purchased by the petitioners, they too were tenants, and for
the first floor, they were paying Rs.3,800/- per month, whereas the
1st respondent was paying, just Rs.500/- per month. They pleaded
that the ground floor has an advantage, from the point of view of
access and amenities, and prayed for enhancement of the rent.
      The 1st respondent died during the pendency of the
proceedings, and his legal representatives, respondents 2 to 5 were
brought on record.  They admitted the tenancy and the demand
made by the petitioners for enhancement of the rent.  According to
them, the garage in the ground floor was occupied by the
petitioners and that there is no basis for the petitioners for
demanding enhanced rent.
      Through its order dated 25-10-2004, the Rent Controller
enhanced the rent to Rs.1,200/- per month, from the date of filing of
the petition.
      The respondents filed R.A.No.321 of 2004 before the Chief
Judge, City Small Causes Court, Hyderabad, challenging the order,
enhancing the rent, passed by the Rent Controller. The petitioners,
on the other hand, filed Cross-objections, seeking enhancement
up to Rs.7,000/- per month.  The lower Appellate Court dismissed the
appeal as well as the cross-objections, through order dated
28-12-2010.  Hence, this revision, under Section 22 of the Act.
      Sri N. Raghavan, learned counsel for the petitioners submits
that the premises are located in an important residential and
developed area in Secunderabad, and that the rent of even a flat
of small the area would be in the range of Rs.10,000/- to Rs.15,000/-
per month.  He submits that the premises under lease, to the
respondents, comprise of several rooms, surrounded by open area
and that the demand for enhancement of rent to Rs.7,000/-
per month was reasonable.  He submits that though oral evidence
of PWs 1 to 3 was adduced, and document, such as the valuation
certificate, was filed as Ex.P-2, the Rent Controller did not take the
same into account, and ordered enhancement, which is totally
irrational and insufficient.  He further submits that the tenants in the
nearby locality were examined and the counterfoils of rents paid by
them were also filed.  Learned counsel submits that the rent ought
to have been enhanced as prayed for.
      Smt. Manjari S. Ganu, learned counsel for the respondents,
on the other hand, submits that originally the 1st respondent was in
occupation of the ground and first floor and on the demand made
by the original owner, the first floor was vacated.  She contends that
even in the ground floor, garage was occupied by the petitioners
and that the water supply was also disconnected.  She contends
that no further enhancement needs to be ordered.
      There is no dispute as to the existence of relationship of
landlord and tenant, between the petitioners and the respondents.
The RC was filed under Section 4 of the Act for enhancement of
the  rent.  It is brought to the notice of this Court that independent
proceedings are pending in relation to eviction.
      The Rent Controller framed only one point for consideration,
viz., whether the petitioners have shown sufficient cause for fixation
of fair rent in respect of the petition schedule premises.  In support
of their claim, the petitioners examined PWs 1 to 3 and filed
Exs.P-1, P-2 and Exs.X-1 to X-4.  The 4th respondent deposed as RW-1
and he filed Exs.R-1 to R-19, photographs, and Ex.R-20, a copy of
the rental agreement.  As observed earlier, the Rent Controller
enhanced the rent from Rs.500/- to Rs.1,200/- per month.  The same
was confirmed by the lower Appellate Court.
      In the context of fixation of fair rent, factors such as the
location and extent of the premises and the age thereof become
relevant.  The record is not clear as to when the tenancy
commenced.  It is true that the tenancy of the deceased-1st
respondent was attorned in the year 2001.  The RC was filed
immediately after attornment.  Oral and documentary evidence
was adduced by the parties.
      The Rent Controller, no doubt, has undertaken extensive
discussion about the matter.  This Court, however, finds that most of
the discussion was outside the scope of the RC.  The rent, which
a premises of similar nature would fetch, becomes relevant.  It is not
in dispute that Jawahar Nagar, is one of the most developed
localities in Secunderabad, and what is in occupation of the
respondents is the entire ground floor premises, except the garage.
The rent of even a flat in that area would be in the range of
Rs.10,000/- to Rs.15,000/- per month, at present. It would be in the
range of Rs.5000/- to Rs.6,000/- in the year 2001.
      The learned Appellate Judge was mostly impressed by the
fact that a clinic is being run in the scheduled premises between
9:00 a.m. and 12:30 p.m. and 6:00 p.m. to 8:30 p.m., and for rest of
the time, it is left vacant.  The second reason that weighed with him
in confirming the rent at Rs.1,200/- per month is that, water supply in
the premises was disconnected, and the respondents arranged for 
an independent connection on their own accord.  I am afraid
whether these two grounds can be treated as relevant and
germane in the context of fixation of fair rent.  Once a tenant is in
exclusive possession of the premises, it hardly matters as to for how
much time, he is putting them to use and the nature thereof.
It matters least for the owner of the premises, as to whether the
tenant is residing in the premises, or as to how many persons are
living thereof, or whether it is kept under lock for most of the time.
The rent represents the charges for usage of the premises.  It is for
the tenant to put them to optimum use.  If the reason furnished by
the lower Appellate Court is to be accepted, a tenant would not
be under any obligation to pay any rent for particular month,
if he does not use the premises during that period.
       The second reason namely, disconnection of water supply,
is in the realm of providing amenities for the premises.  If the tenant
was denied the amenities, the Act prescribes separate procedure
for restoration of the same.  As and when an application is filed in
that behalf, the question as to whether the landlord was responsible
for disruption of any amenity, and if so, what is the method of
restoration thereof; can be considered.
      The rent legislations were enacted at a time when there is
acute dearth of accommodation and the owners of the premises 
were exploiting the tenants.  The situation has changed drastically
and plenty of accommodation is available.  Change in the
approach of the Courts is also evident from the judgment of the
Supreme Court, in Atma Ram Properties (P) Ltd., v. Federal Motors
(P) Limited , wherein the Honble Supreme Court held that rent has
to be determined with reference to the value of the property,
duly indicating the formula thereof.  Though such exercise was in
relation to the rent payable during the pendency of an appeal,
by a tenant, who suffered an order of eviction, guidance can be
received therefrom.  If that formula is applied, the increase in the
rent for the premises would be phenomenal.  This Court is of the
view that whatever may have been the inhibition for the Courts in
enhancing the rent to Rs.7,000/- per month, in the year 2001,
at least now, it can be enhanced.
      Hence, the C.R.P is allowed, and the orders under revision are
modified to the effect that the rent for the scheduled premises shall
stand enhanced to Rs.7,000/- per month, with effect from July 2014.
       There shall be no order as to costs.

_______________________  
L. NARASIMHA REDDY, J.    
Dt.04-07-2014.

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