Partly allowed

Shri. Chandrakant S/O Lata Motilal Jaiswal and Others v. M/S. Devshakti Dal Mill, a Partnership Firm, Nagpur Thr. Its Partner and Others

Bombay HC25 Aug 2022WP/7704/2018

Case brief

AI extract

What is this about?

Landlords challenged an Appellate Authority order that allowed a tenant's appeal and set aside a Rent Controller's partial fixation of fair rent. The High Court held that the Appellate Authority failed to analyze evidence including an expert's reliance on the State readymoney and incorrectly reversed the lower authority's order.

What did the court decide?

The common order of the Appellate Authority allowing the tenant's appeal is set aside to that extent. The tenant's appeal is dismissed, the landlord's appeal is restored, and the Rent Controller's ord

Shri. Chandrakant S/O Lata Motilal Jaiswal and Others Vs… — Landlord and Tenant | Bombay HC (2022)

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WPs7703-7704.18.odt-Judgment 1/17

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR.

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WRIT PETITION NO. 7703 OF 2018

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PETITIONERS/:- 1.ShriChandrakantS/oLala MotilalJaiswal LANDLORD aged about 57 years, Occ.: Business, Original Applicants before the Rent 2.Shri Rajendra S/o Lala Motilal Jaiswal, Controller aged about 55 years, Occ.: Business,

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3.M/s. R.M.Traders, a registered Partnership Firm, Through its Partner Rajendra S/o Lala Motilal Jaiswal,

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4.Smt. Shakuntalabai Wd/o Lala Motilal Jaiswal, aged about 84 years, Occ.: Business,

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5.Smt. Meena W/o Chandrakant Jaiswal, aged about 51 years, Occ.: Business, All R/o. Prashant Nagar, Wardha Road, Nagpur.

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... VERSUS ...

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RESPONDENTS/:- 1.M/s. Devshakti Dal Mill, a registered TENANTS partnership firm, Bagadganj, Small Original NonFactory Area, Bhandara Road, Nagpur, Applicants before the through its partners. Rent Controller 2.Smt. Ichrajabai W/o. Dhanraj Oswal (Expired).

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3.Suresh S/o Dhanraj Oswal, Aged about 64 years, Occ.: Business,

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KHUNTE

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WPs7703-7704.18.odt-Judgment 2/17

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4.Smt. Asha W/o Kantilal Oswal, Aged about54 years, Occ.: Business,

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All R/o. C/o. M/s. Devshakti Dal Mill,
59, Bagadganj, Small Factory Area,
Bhandara Road, Nagpur.

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Mr. S.P. Dharmadhikari, Sr. Counsel a/b
Mr.D.G. Paunikar, counsel for the petitioners/landlord.
Mr.M.G.Bhangade, Sr.Counsel a/b
Mr.Dhruv Sharma, counsel for the respondents/tenant.

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AND

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WRIT PETITION NO. 7704 OF 2018

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PETITIONERS/:-1.ShriChandrakantS/oLala MotilalJaiswal
LANDLORD aged about 57 years, Occ.: Business,
Original Applicants
before the Rent 2.Shri Rajendra S/o Lala Motilal Jaiswal,
Controlleraged about 55 years, Occ.: Business,

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2.Shri Rajendra S/o Lala Motilal Jaiswal, aged about 55 years, Occ.: Business,

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3.M/s. R. M. Traders, a registered Partnership Firm, Through its Partner Rajendra S/o Lala Motilal Jaiswal,

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4.Smt. Shakuntalabai Wd/o Lala Motilal Jaiswal, aged about 84 years, Occ.: Business,

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5.Smt. Meena W/o Chandrakant Jaiswal, aged about 51 years, Occ.: Business,

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All R/o. Prashant Nagar, Wardha Road,
Nagpur.

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KHUNTE

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WPs7703-7704.18.odt-Judgment 3/17

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...VERSUS...

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RESPONDENTS/:-1.M/s. Devshakti Dal Mill, a registered
TENANTS partnership firm, Bagadganj, Small
Original Non-Factory Area, Bhandara Road, Nagpur,
Applicants before thethrough its partners.
Rent Controller

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2.Smt. Ichrajabai W/o. Dhanraj Oswal (Expired).

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3.Suresh S/o Dhanraj Oswal, Aged about 64 years, Occ.: Business,

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4.Smt. Asha W/o Kantilal Oswal, Aged about 54 years, Occ.: Business,

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All R/o. C/o. M/s. Devshakti Dal Mill,
59, Bagadganj, Small Factory Area,
Bhandara Road, Nagpur.

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Mr. S.P. Dharmadhikari, Sr. Counsel a/b
Mr.D.G. Paunikar, counsel for the petitioners/landlord.
Mr.M.G.Bhangade, Sr.Counsel a/b
Mr.Dhruv Sharma, counsel for the respondents/tenant.

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CORAM : MANISH PITALE, J.
CLOSED ON : 14.07.2022.
PRONOUNCED ON : 25.08.2022.

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J U D G M E N T

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Heard.

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2.Rule. Rule made returnable forthwith. The writ

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petition is heard finally with the consent of the learned counsel for
the rival parties.

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KHUNTE

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WPs7703-7704.18.odt-Judgment 4/17

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3.The petitioners in these two petitions are landlords
while the respondents are tenants and the dispute between the
parties is about fair rent to which the petitioners are entitled, in
the facts and circumstances of the present case. The petitioners
had initiated proceedings before the Rent Controller under
Clauses 4 and 5 of the C.P. and Berar Letting of Houses and Rent
Control Order, 1949 (hereinafter referred to as “Rent Control
Order”) seeking fixation of fair rent at the rate Rs.8/- per sq.ft. for
the tenanted premises. The Rent Controller had partly allowed
the said application. As the landlords as well as the tenants were
aggrieved by the said order, they filed appeals before the Appellate
Authority, wherein the landlords sought an order for the
application being allowed in its entirety, while the tenants sought
quashing and setting aside of the order of the Rent Controller. By
common impugned order dated 21/05/2018, the Appellate
Authority rejected the appeal of the landlords and allowed the
appeal of the tenants, as a consequence of which the landlords
stood deprived of even the partial relief granted by the Rent
Controller. The landlords have consequently filed these two writ

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KHUNTE

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WPs7703-7704.18.odt-Judgment 5/17

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petitions challenging the common order passed by the Appellate
Authority.

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4.The tenanted premises are located at Bagadganj,
Small Factory Area, Bhandara Road, Nagpur. It was the case of
the landlords that from the date of creation of the tenancy, the
rent was increased only once in the year 1975 and that thereafter,
there had been no increase in rent. In this backdrop, on
10/09/1996, the landlords filed the aforesaid application under
Clauses 4 and 5 of the Rent Control Order, seeking fixation of fair
rent at the rate of Rs.8/- per sq.ft. from the date of the application
excluding corporation taxes. The said application was opposed by
the tenants. The parties placed on record pleadings as well as oral
and documentary evidence and thereupon, by order dated
28/08/2015, the Rent Controller partly allowed the application
filed by the landlord, directing that the fair rent of the suit
premises stood fixed at Rs.4000/- per month from 11/09/1996
with a rider of 10% increase every three years, excluding
corporation taxes.

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KHUNTE

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WPs7703-7704.18.odt-Judgment 6/17

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5.As noted above, aggrieved by the said order of the
Rent Controller, both the landlords as well as the tenants filed
appeals before the Appellate Authority i.e. the Additional
Collector, Nagpur. By common order dated 21/05/2018, the
Appellate Authority dismissed the appeal of the landlords and
allowed the appeal of the tenants. As a consequence, the
application for fixation of fair rent filed by the landlords stood
dismissed. In other words, the landlords were deprived of even
partial relief granted by the Rent Controller.

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6.Aggrieved by the said common order passed by the
Appellate Authority, the landlords filed Writ Petition No.7703 of
2018 and Writ Petition No. 7704 of 2018, to challenge dismissal of
their appeal and the appeal of the tenants being allowed.

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7.Mr. S.P. Dharmadhikari, learned senior counsel
appearing for the petitioner-landlord in both the petitions
submitted that the pleadings as well as the oral and documentary
evidence placed on record on behalf of the landlords would show
that the application filed for fixation of fair rent ought to have

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KHUNTE

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WPs7703-7704.18.odt-Judgment 7/17

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been allowed in terms of the prayer made therein. Attention of
this Court was specifically invited to the evidence of the expert
witness, who stated in detail the basis on which he had
determined the extent to which the rent deserved to be enhanced
for fixation of fair rent. It was submitted that the examination-in-
chief as well as the cross-examination of the said expert witness
would show that sufficient material was indeed placed on record
before the Rent Controller for supporting the prayer for fixation of
fair rent made on behalf of the landlords. By inviting attention to
the order passed by the Rent Controller, it was submitted that
although the landlords believed that the application for fixation of
fair rent ought to have been allowed in its entirety, there was no
reason for the Appellate Authority to have interfered with the
order of the Rent Controller. It was submitted that when the
material available on record demonstrated that the expert had
based his calculations on ready reckoner, the Appellate Authority
could not have interfered with the order of the Rent Controller in
a casual manner. The approach adopted by the Appellate
Authority was criticized on the ground that there was hardly any

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KHUNTE

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WPs7703-7704.18.odt-Judgment 8/17

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discussion on the relevant material, while appreciating the
findings of the Rent Controller.

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8.The learned senior counsel appearing for the
landlords relied upon Division Bench judgment of this Court in the
case of The Board of Trustees of the Port of Bombay v. Jayantilal
Dharamsey etc., reported in AIR 2001 Bom. 26, to contend that
fixation of fair rent could certainly be done on the basis of
material indicating fair market value of the property in question. It
was submitted that when cogent material was indeed placed on
record by the landlords, there was no reason for the Rent
Controller not to have allowed the application in its entirety and
that there was certainly no reason for the Appellate Authority to
have interfered with at least the partial relief granted by the Rent
Controller.

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9.On the other hand, Mr. M.G. Bhangde, learned senior
counsel appearing for the respondents-tenants, submitted that the
pleadings in the application moved on behalf of the landlords for
fixation of fair rent were wholly deficient and defective to justify

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KHUNTE

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WPs7703-7704.18.odt-Judgment 9/17

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grant of prayer made in the said application. By referring to
clauses 4 to 10 of the Rent Control Order, it was submitted that
the pleadings were insufficient to justify the prayer made in the
said application. As regards the emphasis placed on behalf of the
landlords on the evidence of the expert witness, as also ready
reckoner, it was submitted that as per settled law, such ready
reckoner or circle rate could not be the basis for seeking
enhancement of rent because such material could not be said to be
a valid basis for determining the true market value of the
concerned property.

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10.The learned senior counsel placed reliance on
judgments of the Hon’ble Supreme Court in the case of Special
Land Acquisition Officer and another v. Sidappa Omanna Tumari
and others, reported in 1995 Supp (2) SCC 168, Lal Chand v.
Union of India and another, reported in (2009) 15 SCC 769 and
Sughar Singh v. Hari Singh (Dead) Through LRs and others,
reported in 2021 (12) SCALE 638, as also judgment of Division
Bench of this Court in the case of Kamalkant Natwarlal Shah v.

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KHUNTE

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WPs7703-7704.18.odt-Judgment 10/17

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Jagdishchandra Natwarlal Shah and others, reported in 2014 (1)
Mh.L.J. 152.

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11.Heard learned senior counsel for the rival parties and
perused the material on record. A perusal of the relevant clauses
of the Rent Control Order shows that an application for fixation of
fair rent can be moved by the landlord and factors for determining
such fair rent are indicated in the said clauses of the Rent Control
Order. Much emphasis was placed on behalf of the tenants on the
contents of the application moved by the landlords, to emphasize
that if the pleadings were to be construed, the basis for seeking
fixation of fair rent appeared to be increase in taxes over the
years. By placing emphasis on clause 10 of the Rent Control Order,
it was claimed that the landlords could seek increase in rent by an
amount equal to the amount by which the tax had increased. It
was submitted that no details were forthcoming in the application
as regards the said aspect of the matter and further that the rate of
Rs.8/- per sq.ft. was simply stated in the application, without
supporting pleadings or material.

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KHUNTE

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WPs7703-7704.18.odt-Judgment 11/17

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12.This Court has perused the pleadings in the
application of landlords, as well as the reply filed on behalf of the
tenants. The oral evidence led by the parties was also perused. It
is found that an expert, i.e. an Architect was examined on behalf
of the landlords in support of the prayer made in the application.
The said expert witness stated that while determining the fair rent
for the property in question, he had taken into consideration the
area of the premises and relied upon the ready reckoner prepared
by the State Authorities. In the cross-examination, the expert
witness stated that he had also taken into consideration the
expected price that the property in question would fetch,
indicating that the prevalent market value or prevailing market
selling rate of the land was the basis. The said witness also
responded to the question as to the manner in which the
prevailing rate of Rs.8/- per sq.ft. was calculated.

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13.Much emphasis was placed by the learned senior
counsel appearing for the tenants on the aforementioned
judgments of the Hon’ble Supreme Court and this Court to
contend that ready reckoner could never be a sound basis for

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KHUNTE

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WPs7703-7704.18.odt-Judgment 12/17

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determining the market value of the property in question and
hence, fixation of fair rent on that basis would not be justified.
But, a perusal of the said judgments indicates that the judgment in
the case of Special Land Acquisition Officer v. Sidappa Omanna
Tumari (supra) and Lal Chand v. Union of India (supra) arose
from land acquisition proceedings. In the said cases, the Court
was concerned with payment of just and fair compensation to the
claimants and in that context the basis for determination of
market value was examined.

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14.In the case of Special Land Acquisition Officer v.
Sidappa Omanna Tumari (supra), it was emphasized that
valuation report prepared by an expert could be of assistance in
determining the market value if the factual data or material is
produced before the Court and it is proved to be reliable like any
other evidence. The determination of the expert in the present
case was on the basis of ready reckoner issued by the State
Authorities itself. In the cross-examination of the expert witness
in the present case, no questions were put on behalf of the
respondents-tenants indicating either that the opinion of the

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KHUNTE

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WPs7703-7704.18.odt-Judgment 13/17

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expert was based on no material or that the ready reckoner was
itself suspect. The nature of cross-examination of the expert
witness in the present case would show that it was limited to
asking questions as regards the manner in which the expert had
rendered his opinion/findings. It appears that the cross-
examination on behalf of the tenants was more on the line as to
what was the basis for the expert giving his opinion on the
prevailing market selling rate of land and no real attempt was
made to doubt the genuineness of the material, including the
ready reckoner.

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15.A Division Bench of this Court, in the case of
Lokhandwala Infrastructure Pvt. Ltd. Vs. Municipal Corporation of
Greater Mumbai 2008 SCCOnline Bom 717, has taken judicial
notice of the fact that rates stated in the ready reckoner provide
the minimum price to be considered for stamp duty. It is for this
reason that when Courts consider the fair and just compensation
to be paid to claimants in cases concerning land acquisition, only
the ready reckoner is seldom taken as the basis for determination
of true market value. The Court is more concerned about the

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KHUNTE

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WPs7703-7704.18.odt-Judgment 14/17

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actual market value, which is found to be higher than such ready
reckoner rates. It is in this context that Courts have made
observations about the reliability of the ready reckoner as the true
basis for determination of the market value of the property in
question. The observations made by the Hon’ble Supreme Court
in the case of Lal Chand v. Union of India (supra) have to be
considered in that light. The ready reckoner assists the
Authorities of the State including Registration Authorities to
examine whether transactions concerning properties are showing
unreasonably low rates, thereby indicating that there is possibility
of undervaluation, only to avoid liability to pay appropriate stamp
duty. It is in this context, that while considering the cases
regarding just and fair compensation payable to claimants in the
context of land acquisition, that the Hon’ble Supreme Court in the
aforesaid judgments has made the said observations.

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16.It is in this context, that the observations made by the
Division Bench of this Court in the case of Kamalkant Natwarlal
Shah v. Jagdishchandra Natwarlal Shah (supra) are also to be
appreciated. It has been observed that the ready reckoner cannot

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KHUNTE

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WPs7703-7704.18.odt-Judgment 15/17

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be recorded as the accurate market value of the property. But, if
there is any doubt regarding the same raised by the tenant or if a
dispute is raised, only then the further question about genuineness
of the material would become relevant. Such is not the case in the
present matter. Therefore, reliance placed on behalf of the
landlords on the judgment of the Division Bench of this Court in
the case of The Board of Trustees of the Port of Bombay v.
Jayantilal Dharamsey etc. (supra) is justified.

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17.Even otherwise, a Division Bench of this Court in the
case of Megh Reality and Developers Pvt. Ltd. Vs. Learned Joint
Registrar 2022 SCCOnline Bom 1539, has held that although
ready reckoner cannot be the sole basis for determining the
market value, but it could be an indicator of the approximate
value of the land. To that extent, the tenants in the present case
are not justified in claiming that there were serious deficiencies in
pleadings and evidence to seek any enhancement in the rent.

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18.This Court finds that on the basis of the pleadings and
the evidence available on record, the Rent Controller had reached

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KHUNTE

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WPs7703-7704.18.odt-Judgment 16/17

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a reasonable finding, while partially granting relief to the
landlords. But, a perusal of the common impugned order shows
that the Appellate Authority recorded its findings in paragraph 8.
While rendering findings against the landlords and in favour of
the tenants, the Appellate Authority held that no documentary
evidence was produced by the landlords to substantiate their claim
for fixation of fair rent and that the Rent Controller was not
justified in granting even partial relief to the landlords. There was
no analysis of the pleadings or the evidence and the material on
record, while reversing the findings rendered by the Rent
Controller. It was simply observed that the burden was on the
landlords to prove as to how much rent were similar premises
fetching when the application for fixation of fair rent was moved.
But, the pleadings and evidence placed on record on behalf of the
landlords was not even referred to, while passing the impugned
common order.

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19.This Court is of the opinion that no case was made
out by the tenants for interference with the order passed by the
Rent Controller, which granted partial relief to the landlords and

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KHUNTE

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WPs7703-7704.18.odt-Judgment 17/17

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the appeal filed by the tenants was erroneously allowed. On the
basis of the material available on record, there was no basis for
interfering with the partial relief granted to the landlords and
hence, the impugned common order deserves interference to that
extent.

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20.In view of the above, the impugned common order is
set aside to the extent that it allowed the appeal filed by the
respondents-tenants bearing Appeal No.8/A-71(1)/2015-16. The
said appeal filed by the tenants is dismissed and the order of
dismissal of the appeal filed by the landlords bearing Appeal
No.4/A-71(1)/2015-16 is not interfered with. Accordingly, the
order passed by the Rent Controller granting partial relief to the
landlords is restored.

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21.Rule is made absolute in the above terms. No costs.

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JUDGE

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KHUNTE Digitally signed byRAVIKANT CHANDRAKANT KOLHE Signing Date:25.08.2022 18:10

Shri. Chandrakant S/O Lata Motilal Jaiswal and Others v. M/S. Devshakti Dal Mill, a Partnership Firm, Nagpur Thr. Its Partner and Others

Case brief

What is this about?

What did the court decide?

Shri. Chandrakant S/O Lata Motilal Jaiswal and Others v. M/S. Devshakti Dal Mill, a Partnership Firm, Nagpur Thr. Its Partner and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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Parties & counsel

Coram

Case details

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