Partly allowed

Shailesh Desai v. Chandroth Vannalakth Ebrahim

Kerala HC14 Aug 2018RCRev./151/2015

Case brief

AI extract

What is this about?

The High Court examined a revision challenging rent fixation and periodic enhancement by lower courts. While upholding the fair rent amount, the Court set aside the lower courts decision to grant periodic enhancement every two years citing lack of reasoning and deviation from Supreme Court guidelines which prescribe a three-year interval. The case reaffirmed landlords right to seek fair rent fixat

What did the court decide?

The periodic enhancement of rent granted by lower courts was set aside; fair rent fixation was confirmed. Revision petition allowed in part.

Shailesh Desai Vs Chandroth Vannalakth Ebrahim — Landlord and Tenant | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE K.HARILAL

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THE HONOURABLE MRS. JUSTICE ANNIE JOHN

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TUESDAY ,THE 14TH DAY OF AUGUST 2018 / 23RD SRAVANA, 1940

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RCRev..No. 151 of 2015

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AGAINST THE ORDER/JUDGMENT IN RCA 119/2011 of VI ADDITIONAL DISTRICT COURT, ERNAKULAM DATED 11-04-2014

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AGAINST THE ORDER/JUDGMENT IN RCP 105/2004 of III ADDITIONAL MUNSIFF COURT, EKM (RENT CONTROL) DATED 22-09-2011

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REVISION PETITIONER/APPELLANT/RESPONDENT:

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SHAILESH DESAI, AGED 51 YEARS S/O.DHIRAJLAL M.DESAI, PROPRIETOR,TWINKLE,M.G.ROAD, ERNAKULAM.

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BY ADVS. SRI.P.MARTIN JOSE SRI.P.PRIJITH SRI.THOMAS P.KURUVILLA

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RESPONDENTS/RESPONENTS/PETITIONERS:

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1 CHANDROTH VANNALAKTH EBRAHIM AGED 68 YEARS, S/O.UMMER HAJI, BUSINESSMAN,RESIDING AT 'VAHEEDAS', AZHIYOOR.P.O, AZHIYOOR VILLAGE, VADAKARA TALUK, KOZHIKODE DISTRICT.`

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2 CHANDROTH VANNALAKATH ABUBACKER AGED 73 YEARS, S/O.UMMER HAJI, BUSINESSMAN, RESIDING AT 'VAHEEDAS', AZHIYOOR.P.O, AZHIYOOR VILLAGE, VADAKARA TALUK, KOZHIKODE DISTRICT, REPRESENTED BY POWER OF ATTORNEY IST RESPONDENT.

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3 CHANDROTH VANNALAKATH ABDULLA, AGED 71 YEARS, S/O.UMMER HAJI, BUSINESSMAN, RESIDING AT 'VAHEEDAS', AZHIYOOR.P.O, AZHIYOOR VILLAGE, VADAKARA TALUK, KOZHIKODE DISTRICT. REPRESENTED BY POWER OF ATTORNEY IST RESPONDENT. 4 KALLAROTH SHAHIDA, AGED 38 YEARS D/O.ABDULA, BUSINESSMAN, RESIDING AT 'VAHEEDAS', AZHIYOOR.P.O, AZHIYOOR VILLAGE, VADAKARA TALUK, KOZHIKODE DISTRICT. REPRESENTED BY POWER OF ATTORNEY IST RESPONDENT. BY ADVS. SR. N.C. JOSEPH1 SRI.T.U.ZIYAD

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THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 14.08.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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RCRev..No. 151 of 2015

ORDER

Harilal, J

The revision petitioner and the respondent are tenants and landlord respectively. The legality and propriety of

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the concurrent findings whereby the rent control court, Ernakulam fixed the fair rent in R.C.P.No.105/2004 and affirmed by the rent control appellate authority, Ernakulam in R.C.A.No.119/2011 are challenged in this revision. Parties are referred to as in the rent control petition.

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The petitioners filed the aforesaid rent control petition with the following averments. The respondent took the ground floor of the building bearing

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RCRev..No. 151 of 2015

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No.38/6917 (New No.40/7418) of Cochin

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Corporation as per registered lease agreement No.422/1990 of SRO,

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Ernakulam and the Mezzanine floor and additional structure as per registered lease deed No.6363/1994 for the purpose of doing business in the name and style “Twinkle Garments”. Later as per lease deed dated 01.06.1997, the respondent took the staircase room bearing No.40/7419 of Cochin Corporation. Thereafter, he took the 1^st floor of the building No.40/7420 and second floor of the building bearing No.40/7421 as per document No.4178/1/2000 and lease deed No.P2/2001/650/2002 of SRO Ernakulam

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respectively. The rate of rent per month for ground floor including Mezzanine floor, additional structure and stair case room is Rs.15,000/- and the first and second floor is Rs.10,000/- each. Thus the total area in

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occupation of the respondent is approximately 3500 sq.ft., which was amended and corrected as 4350 sq.ft. The building situate in the heart of the city in a business centre near Shenoy junction, having sufficient car parking space. The ground floor is constructed in 15 ft. height with a mezzanine floor. It is also having locational peculiarity since it is having more view than any other building in the area. The similarly building of the same

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RCRev..No. 151 of 2015

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locality would fetch at least Rs.75/- per sq.f.t as monthly rent. So the rent now being paid by the respondent is very meagre. Hence the petitioners are entitled to get present market rate of rent in the

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schedule building. Therefore, the petitioners claimed fair rent @

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Rs.3,26,250/-. During the pendency of the proceedings second petitioner died and his legal heirs were impleaded as additional petitioners 5 and 6.

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The respondent filed counter statement denying the claim for enhancement of rent. They admitted the landlord tenant relationship and the rental arrangement entered into between the

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parties as stated in the rent control

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petition. However, it is contended that as per the lease deeds, the respondent is in occupation of the entire building including the terrace and hoarding erected therein. They contended that the total area of the building comes to 3000 sq.ft. only. It is incorrect to say that the agreed rent is a meager amount and in fact it is excess rent, considering the market rent prevailing in the locality. They admitted that the building is situated in the heart of the city in M.G.road near Shenoy junction. But it is not a business centre as alleged. The importance of MG road is going down due to the lack of parking space and

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The increase of vehicular traffic. respondent denied the locational importance, facility of parking space etc. as stated in the petition. After taking the second floor and terraced portion on rent for a period of 15 years commencing from 01.11.2001, the petitioner started filing suits and rent control petitions one after the other in order to harass the respondent and to get unreasonable rent. All the amendments enhancing the total rent are illegally unsustainable. There is a provision for enhancement of rent @ 15% after 60 months as per the first registered lease agreement and 25% increase of rent after 5 years in the agreement

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No.6363/1994. Similar provision for

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enhancement of 25% in every 5 years is

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also provided in the subsequent lease deed entered into between the parties. Therefore, the present application seeking enhancement of rent more than the agreed rate of enhancement is not sustainable.

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Heard the learned counsel for the revision petitioner/respondent and the learned counsel for the

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respondents/petitioners.

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The learned counsel for the

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revision petitioner advanced arguments challenging the maintainability of the Rent Control Petition filed seeking enhancement

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of rent. According to the learned counsel, there is a specific clause, for periodic enhancement of rent, in the lease deed itself. Therefore, the parties to the contract cannot deviate from the terms of contract and seek fixation of fair rent through the process of the Court. Secondly, the court below went wrong by enhancing the area of the tenanted premises, after discarding the area shown in the lease deed and relied on by the Rent Control Court. Thirdly, the courts below fixed the fair rent without the proof of prevailing rent of the similarly situated buildings in the same locality. Fourthly, the court below went wrong by granting

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RCRev..No. 151 of 2015

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periodic enhancement of rent @10% of the

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rent paid in every two years.

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Per contra, the learned counsel for the respondent/petitioner advanced

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arguments to justify the concurrent findings of the courts below, whereby the fair rent stands fixed. According to the learned counsel for the

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respondent/petitioner the landlord has right to institute Rent Control Petition

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seeking fixation of fair rent, by enhancing the existing rent, notwithstanding the terms of lease agreement, as there is no statutory bar against the same. There are sufficient oral and documentary evidence to show the prevailing rent of the similarly

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situated building in the same city. The court below can be justified in relying on the Commission report for fixing the exact

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area of the building. According to the

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learned counsel, the periodic enhancement of rent granted by the courts

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below are inadequate in view of the steep increase, in the commercial potentiality of

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Cochin city.

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At the outset, we must remind

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ourselves the limited scope and extent of revisional jurisdiction under Section 20 of the Kerala Building Lease and Rent Control Act (the Act) which is confined to legality, propriety, and regularity of the findings of

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the courts below. The revisional court

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cannot re-appreciate the entire factual findings so as to arrive at a different finding, unless the findings of the court below are perverse or vitiated by nonconsideration of material facts.

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Bearing the aforesaid proposition

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in mind, we have considered the arguments at the Bar. The first question to be considered is whether the Rent Control Petition seeking fixation of fair rent is maintainable, notwithstanding the existence of the lease agreement providing periodic enhancement. It is true that in Ext.P4 lease agreement there is a provision for a periodic enhancement. On a survey of various provisions under the

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RCRev..No. 151 of 2015

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Act, we find that there is no statutory bar against the institution of a Rent Control

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Petition before the Rent Control Court, when there is an agreement between the landlord and tenant providing periodic enhancement. In the absence of such a bar in the statute, it cannot be hold that the Rent Control Petition seeking fixation of fair land is not maintainable, where there is an agreement between the parties providing periodic enhancement of rent. It could be reasonably and legally presumed that legislature was so conscious to omit such a bar, for providing liberty to the landlord to seek enhancement of rent through the process

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RCRev..No. 151 of 2015

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of court. The above view is supported by Edger Ferus' case , wherein this Court held that the landlord or tenant can approach the Rent Control Court for revision of rent quinquennially. Further in this decision this Court held that the decision in C.John Zacharia & Company v. Ittycheriah [1987 (1) KLT 156], holding that even beyond the period originally stipulated till evicted under Section 11 of the Act, the agreed rent alone is payable by the tenant, is not good law. Thus we find that there is no legality or propriety in the findings of the court below that the Rent Control Petition is maintainable, notwithstanding the

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existence of Ext.P4 agreement providing

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periodic enhancement.

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Coming to the determination of the area of the tenanted premise, we find that on the basis of the ground floor alone, shown in Ext.A1 lease deed, the rent control court calculated the total area, covering three floors, on a guess work; whereas the appellate authority on the application of the landlord appointed commission and after measuring the entire area covering three floors with the assistance of an expert reported that the total area would come to 3606.75 sq.ft. The Commissioner was also examined as

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PW3 and nothing has been found to

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discredit his evidence. In the above view the appellate authority is justified in relying on the total area of the tenanted building reported by the Commissioner. We do not find any reason to interfere with the said finding in exercise of revisional jurisdiction.

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Coming to the fixation of the rent, it is true that the rent deeds exactly showing the rent of the similarly situated buildings are not produced in evidence. But at the same time, it has come out in evidence that the landlord is having several buildings in Cochin city in M.G.Road very near to the petition scheduled building and he is getting

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Rs.80/- per square feet as monthly rent. Similarly, the landlord has relied on the decision reported in R.C.R.No.267/2011 and in that decision it has come out in evidence that the rate of rent prevailing in M.G.Road is more than Rs.30/- per square feet. The landlord has produced Ext.A2 rent deed. It would show that prevailing rent of that building, during the period from 2001 to 20004 is Rs.28.22 to Rs.36/per square feet. Considering the fact that the aforesaid rent is the rent of a building constructed in the year 2001 and the petition schedule building was constructed in the year 1970, the court below has not taken the Ext.A2 as a basic document. But

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we are of the opinion that though the building is not exactly similar, Ext.A2 shows the steep increase in the rate of rent of the tenanted buildings in Cochin city. Thus, we find that even though there is no document showing exact rent of the similarly situated building, there is sufficient evidence to arrive at a reasonable finding, as to prevailing rent of the buildings in Cochin city. Though there is evidence to show that the prevailing rent is up to Rs.36/-, the court below has taken Rs.21/- and Rs.16/- per square feet only for fixing the fair rent of the petition scheduled building. We do not find any reason to interfere with the said factual

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RCRev..No. 151 of 2015

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finding in the absence of any material to the contrary.

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As regards the periodic

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enhancement going by the impugned judgment we find that the court below has granted a periodic enhancement @10% of the last paid rent in every two years. But we find that no reasoning has been given for granting a periodic enhancement at such a rate. More surprisingly, even though the petitioner/landloard has not filed an appeal challenging the inadequacy of periodic enhancement, the learned counsel for the petitioner/landlord submits that the periodic enhancement @10% for every two year is to inadequate and

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RCRev..No. 151 of 2015

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disproportionate with the steep increase in the commercial potentiality of Cochin city. As rightly pointed out by the counsel appearing for both landlord and tenant, we find that periodic enhancement has been fixed without any basis. That apart, in the guideline issued by the Supreme Court in the decision in Mohammad Ahamad v. Atmaram Chauhan [AIR 2001 SC 1940] periodic enhancement provided is for every three years only. But in the instant case, the court below has granted periodic enhancement for every two years. Hence we set aside the periodic enhancement granted by the courts below concurrently. Considering the long lapse of time after

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filing this rent control petition, the parties are at liberty to approach the rent control court for the determination of fair rent.

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Thus, we confirm the fixation of fair rent @ Rs.23,310/- per month for ground floor and Rs.17,760/- each per month for the first and second floor with effect from 19.02.2013 and the periodic enhancement @ 10% would stand set aside.

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This Review Petition would stand partly

allowed.

Sd/-

K.HARILAL, JUDGE

sd/-

ANNIE JOHN, JUDGE

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AMV/sd/28.03.2019

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RCRev..No. 151 of 2015

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The date 19/2/2013 occurring in the 2^nd line of page 19 of the final order dated 14/08/2018 in RCR 151/2015 is corrected as 19/02/2003 vide order dated 13.01.2021 in R.P.No.993/2019 in RCR No.151/2015.

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Sd/-

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Deputy Registrar

Shailesh Desai v. Chandroth Vannalakth Ebrahim

Case brief

What is this about?

What did the court decide?

Shailesh Desai v. Chandroth Vannalakth Ebrahim

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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