9911796707
TMI Blog1995 (11) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions or improvements or alterations are made by the landlord to the building. Section 8 has imposed a restriction on the landlord from claiming or receiving or even stipulating for payment of rent in excess of the fair rent. 3. Petitioner contends that the three provisions together would affect his livelihood as he is depending on the income from the rent of the building let out to different tenants and are hence offensive to Article 21 of the Constitution of India. He further contends that the above provisions are unjust, unreasonable and arbitrary and hence they offend Article 14 of the Constitution. Alternatively, Petitioner contends that the above provisions put together amount to unreasonable restriction on his right to carry on the business in renting out buildings and hence they offend Article 19(1)(g) of the Constitution of India. 4. Mindful of the fact that on earlier occasions constitutional validity of the above provisions has been challenged unsuccessfully, learned Counsel for the Petitioner contended that changed circumstances are of considerable importance in testing the vires of the impugned provisions albeit the survival of those provisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or 19 and no law containing a declaration that it is for giving effect to such policy shall be called in question in any Court on the ground that it does not give effect to such policy. Learned Additional Advocate General relied on the decision of the Supreme Court in State of Tamil Nadu v. L. Abu Kavur Bai A.I.R. 1984 S.C. 326 and contended that though the directive principles of the State Policy are not enforceable yet the Court should make a real attempt at harmonising and reconciling the directive principles and the fundamental rights and any collision between the two should be avoided as far as possible. 7. The Act was made for the State of Kerala to regulate leases of building and to control rent for such buildings. Prior to the enactment of Act 2 of 1965, rent control legislation in force was the Kerala Buildings (Lease and Rent Control) Act, 1959 (Act 16 of 1959). Prior to that the Travancore-Cochin Buildings (Lease and Rent Control) Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and proper in the eyes of law. The determination of fair or standard rent is neither reduction of the agreed rent nor enhancement of the agreed rent. 11. We would now examine the relevant provisions of the Act relating to fixation of fair rent in the above background. Section 5 of the Act which deals with determination of fair rent contains the following provisions. 12. Sub-section (1) of Section 5 compels the Rent Control Court (for short 'the Court') to fix the fair rent of a building if an application is filed for that purpose. Sub-section (2) requires that the Court shall, in fixing the fair rent, take into consideration the property tax fixed by the local authority at the time of letting. But in the proviso to the sub-section a limit is prescribed for the fair rent as this : Fair rent shall in no case exceed by more than fifteen per cent of the monthly rent on the basis of which the property tax was fixed in the register prevailing two years preceding the date of application. Sub-section (3) deals with a situation where no property tax has been fixed by the local authority, etc., and then the Court can take into consideration the prevailing rates of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source of livelihood is the rent received from the building. Some of the rooms in the building were let out to the tenants long prior to the commencement of the Kerala Act. The rent of those shop rooms having plinth area of 198 sq.ft. was ₹ 35 per month during the period when they were let nut. The tenants who were occupying the shop rooms have grown in business. Some of the tenants of the shop rooms increased the rent of ₹ 350 per month around the year 1987. According to the Petitioner, the prevailing rates of rent at this area is ₹ 6 per sq.ft. (which means ₹ 1,188 per month for an area of 198 sq.ft.). At least that is the range of rent which other landlords are getting from their tenants for the shop rooms which belong to them. According to the Petitioner, because of the phenomenal increase in the cost of living and the depletion of money value, he finds it difficult to make both ends meet as the rent which he receives is hardly sufficient even to make periodical maintenance and necessary repairs of the building, etc. It is not disputed that cost of materials and labour to carry out such maintenance and repairs have gone up spiralling high. 16. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. A.I.R. 1974 S.C. 1863 Supreme Court has observed that the word 'control' suggests check restraint or influence. Of course, the Supreme Court has observed in Corporation of Nagpur v. Ramachandra G. Modak A.I.R. 1984 S.C. 626 that the word 'control' has a very wide connotation and amplitude and includes a large variety of powers which are incidental or consequential to achieve the powers vested in the authority concerned. But those observations cannot be used to expand the contours of control to deprive the rent of a person for all practical purposes. 19. Considering the word 'control' in the above perspective we are of the view that rent control legislation cannot be used to make the rent amount to remain static always unmindful of the vicissitudes in economic conditions, plummeting money value and improvements of the locality from commercial angles. We are also inclined to accept the contention of learned senior Counsel for the Petitioner that if the effect of the provision is to keep the rent static by fixing fair rent, it would not be fair rent at all when situation changes on account of the factor mentioned above. On the contrary it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. Disparity between the cost of living Or the rupee value in 1965 and 1995 is so massively vast that it is absolutely unrealistic to act on the former for any final reckoning as for the latter. If a building was leased out in 1950, the property tax fixed would have been, from the angle of today's money value, a piffling. The requirement in Section 5(2) that the Court shall take into consideration the property tax fixed at the time of lease, if to be followed in 1995 in respect of a building leased in 1950, the result would be ostensibly unjust and unreasonable. We bear in mind that no provision is included in the Act for updating according to the rupee value while fixing the fair rent. 23. Nor can we shut our eyes to the other side of the picture. A tenant who took the building for commercial purposes in 1950 could increase his turn over of his business many many times and as a corollary his margin of profit would have enhanced leaps and bounds. But the person who built the building (in which the tenant conducts the business) is entitled to get a rent based on 1950 money value. Similar position arises in the case of a residential building. The tenant who occupie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness in Article 19(1)(g) has received a very pragmatic and realistic construction by the Constitution Bench of the Supreme Court in Sodan Singh v. New Delhi Municipal Committee A.I.R. 1987 S.C. 1988. The following observations are apposite in this context: 'Business' is a very wide term and would include anything which occupies the time, attention and labour of a man for the purpose of profit. It may include in its form trade, profession, industrial and commercial operations, purchase and sale of goods, and would include anything which is an occupation as distinguished from pleasure. The object of using four analogous and overlapping words in Article 19(1)(g) is to make the guaranteed right as comprehensive as possible to include all the avenues and modes through which a man may earn his livelihood. In a nut-shell the guarantee takes into its fold any activity carried on by a citizen of India to earn his living. The activity must of course be legitimate and not anti-social like gambling, trafficking in women and the like. 29. We have no doubt, in our mind in the light of the above observations that constructing buildings and letting them out for rent t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
