2010 (8) TMI 935 - SC - Indian Laws

Whether tenants on a monthly rental of ₹ 4000/- and as such the eviction proceeding is not maintainable in respect of the premises under the 1999 Rent Act as the same is not applicable to premises where the monthly rental exceeds ₹ 3500/-? Whether the Court of Small Causes has no jurisdiction to try the said eviction proceeding as the 1999 Rent Act does not apply?

Summary

Issues Involved:
1. Jurisdiction of the Court under the Karnataka Rent Act, 1999.
2. Applicability of the Karnataka Rent Act, 1999 to premises with a monthly rent exceeding Rs. 3500.
3. Interpretation of "deemed rent" and "standard rent" under the Karnataka Rent Act, 1999.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Court under the Karnataka Rent Act, 1999:
The appellants challenged the order of the XVth Additional Small Causes Judge, which held that the court had no jurisdiction to try the eviction case as the Karnataka Rent Act, 1999 did not apply to premises with a monthly rent exceeding Rs. 3500. The High Court upheld this decision, and the Supreme Court affirmed it, stating that the 1999 Rent Act is not applicable to premises with a monthly rent above Rs. 3500, thus confirming the lack of jurisdiction of the Small Causes Court.

2. Applicability of the Karnataka Rent Act, 1999 to premises with a monthly rent exceeding Rs. 3500:
The respondents contended that the eviction proceedings should be dealt with under the 1999 Rent Act, which came into effect during the pendency of the eviction proceedings. The appellants amended their eviction proceedings accordingly. However, the respondents argued that since the monthly rent was Rs. 4000, the 1999 Rent Act did not apply, as per Section 2(3)(e)(i) of the Act. The Supreme Court agreed with this interpretation, noting that the Act explicitly excludes premises with a monthly rent exceeding Rs. 3500 from its purview.

3. Interpretation of "deemed rent" and "standard rent" under the Karnataka Rent Act, 1999:
The appellants argued that the non-applicability of the 1999 Rent Act should be based on the "standard rent" fixed under Section 7 of the Act, not merely the agreed rent of Rs. 4000. The Court examined Sections 6 and 7, which define "rent payable" and "standard rent," respectively. The Court concluded that in cases where there is an agreed rent, the question of fixing a standard rent does not arise. The agreed rent of Rs. 4000 was considered the "deemed rent" under the Act, thus excluding the premises from the 1999 Rent Act's applicability.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision that the Karnataka Rent Act, 1999 does not apply to premises with a monthly rent exceeding Rs. 3500. The Court clarified that the agreed rent of Rs. 4000 is considered the deemed rent, and in such cases, the standard rent provisions do not apply. Consequently, the Small Causes Court had no jurisdiction to entertain the eviction proceedings under the 1999 Rent Act.