N. Someshwar Rao, vs Padma Nagabushanam,

Telangana High Court

N. Someshwar Rao, vs Padma Nagabushanam, on 3 May, 2024

HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

                   C.R.P.Nos.4075 & 4076 of 2017
COMMON ORDER:

Civil Revision Petition Nos.4075 and 4076 of 2017 are filed aggrieved by the common judgment, dated 02.06.2017, passed by the Chief Judge, City Small Causes Court, Hyderabad in R.A.Nos.143 and 170 of 2014, respectively.

2. Since the parties, the issues involved and the subject matter in both the Revisions Petitions are one and the same, both the Revisions are heard together and being disposed of by common order.

3. By the impugned common judgment, the first Appellate Court has allowed in part the Appeal-R.A.No.170 of 2014 filed by the landlords and dismissed the Appeal-R.A.No.143 of 2014 filed by the tenant, thereby, modifying the order dated 18.03.2014, passed by the II Additional Rent Controller, Hyderabad in R.C.No.328 of 2010, and fixed the fair rent for the petition schedule mulgi at Rs.30/- per sq. ft with a benefit of 10% of future enhancement on the existing rent for every two years and further, 2 LNA, J CRP.Nos.4075 & 4076 of 2017 directed the tenant to pay the fair rent at Rs.7,125/- per month from the date of filing of the RC by the landlord before the trial Court.

4. In both the Revision Petitions, the petitioner is the tenant and the respondents are the landlords. For convenience, the parties are hereinafter referred to as arrayed in the Rent Control Case.

5. The facts of the case, shorn off unnecessary details, are that RC.No.328 of 2010 was filed by the landlords before the II Additional Rent Controller, Hyderabad praying the Court to fix fair rent at Rs.8,000/- per month for the petition schedule mulgi.

6. Briefly stated, the averments of the petition are that the respondents herein are the sole, absolute and exclusive owners of the entire premises bearing Nos.3-4-514, 514/1, 514/2, 514/3, 514/4, 514/5 and 514/6, consisting of six mulgies in the ground floor and three upper floors; that the mulgies in the ground floor are commercial in nature and the upper floors are residential; that by the date of purchase of the said property by the respondents, the petitioner was tenant of mulgi bearing No.3-4-514/5 admeasuring 237.5 square feet in the ground floor of the building situated at Barkatpura, Hyderabad, on a monthly rent of Rs.300/- 3

LNA, J CRP.Nos.4075 & 4076 of 2017 approximately exclusive of electricity and water charges; that since the date of its purchase, the tenant has been paying the rent as such; and that after several requests and demands, with great reluctance, he has agreed to pay the present monthly rent of Rs.1500/-. It was further averred that oral partition was affected amongst the respondents and with the consent and concurrence of respondent No.2, who is the father of respondent Nos.1 and 3, in which respondent No.1 was allotted all the six mulgies in the ground floor.

6.1. It was further averred that the petition schedule property is situated in the heart of Hyderabad and is surrounded by all commercial and several others corporate establishments on all sides and it is very nearer to Barkatpura Cross Roads. It was further averred that the tenant having been in occupation of the petition schedule mulgi, even by the date of its purchase by the landlords, has been successfully carrying on business in the said premises, on meager monthly rent of Rs.300/-. Subsequent to the respondents becoming the owners and more particularly, after respondent No.1 was allotted the mulgies in the ground floor, respondent No.1 4 LNA, J CRP.Nos.4075 & 4076 of 2017 repeatedly requested the petitioner to increase the rent to at least Rs.8,000/- per month taking into consideration the prevailing market values in the locality, but, the petitioner did not heed to the same. Hence, the RC was filed by the landlords against the tenant.

7. The revision petitioner-tenant filed counter, inter alia denying the averments in the petition that the petition schedule property is situated in the heart of Hyderabad i.e., near Barkatpura Cross Roads and it is surrounded by commercial and corporate establishments on all sides and a fly-over is going through the junction, due to which, no commercial activity is fetching profits and by the side of the suit premises, there is a very big drainage nala emanating foul smell and there is no space for parking and therefore, the present monthly rent of Rs.1500/- is high and abnormal. In the above circumstances and also due to loss in the business, the tenant requested the landlords to reduce the rent of the suit schedule mulgi.

7.1. The tenant further submitted that the petition schedule property is nearby slum locality of Baghlingampally and also the premises is not fit for commercial purpose. He denied that inspite 5 LNA, J CRP.Nos.4075 & 4076 of 2017 of several requests made by respondent No.1-landlord, he did not choose to enhance the rent. He also denied the other averments in the RC with regard to the prevailing market value and contended that due to traffic junction near the petition schedule mulgi, it does not fetch rent of Rs.8,000/- per month, as alleged by the landlords, and it does not fetch even rent of Rs.500/- per month. Hence, he prayed to dismiss the petition.

8. On behalf of the landlords, P.Ws.1 to 4 were examined and Exs.P-1 to P-3, and Exs.X-1 and X-2 were marked. On behalf of the tenant, R.W-1 was examined, but no documents were marked.

9. The trial Court for the reasons recorded in the Order, did not rely upon the evidence of P.Ws.2 to 4, however, noted down that the admission of the tenant as RW-1 that there is a passage of about 5 to 6 feet width in front of the mulgies, goes to show that there is parking facility to the petition schedule mulgi. The trial Court further observed that R.W-1 admitted that the petition schedule mulgi is situated in one of the prime localities in Hyderabad and there are no vacant mulgies in and around the building where the petition schedule mulgi is situated and in view 6 LNA, J CRP.Nos.4075 & 4076 of 2017 of the same, held that the petition schedule mulgi is situated in a commercial area and as such, the monthly rent of Rs.1,500/- being paid by the tenant is very low. Accordingly, by referring to and relying on the judgment of Hon'ble Apex Court in Rattan Arya, etc Vs. State of Tamilnadu and another 1 and the judgment of the erstwhile High Court of Andhra Pradesh in Suresh Gir Vs. K.Sahadev 2, fixed the monthly fair rent of the petition schedule mulgi at Rs.20/- per square feet and directed the tenant to pay the fair rent at Rs.4,750/- per month in respect of the petition schedule mulgi from the date of filing of the petition and with future enhancement at 10% for every two years on the existing rent. The trial Court further directed the tenant to pay arrears of rent within two months from the date of the order.

10. Aggrieved by the said order, the tenant filed R.A.No.143 of 2014 and the landlords filed R.A.No.170 of 2014. The first Appellate Court re-appreciated the oral and documentary evidence on record and relying on the judgment of Hon'ble Apex Court in Rattan Arya's case (cited supra) and the judgment of the erstwhile 1 AIR 1986 SC 1444 2 1998(1) ALD 25 (D.B) 7 LNA, J CRP.Nos.4075 & 4076 of 2017 High Court of Andhra Pradesh in Jupudi Parthasarathy Vs. Kondapalli Rajeswari 3, dismissed the appeal filed by the tenant and partly allowed the appeal filed by the landlords. Aggrieved by the same, the present Civil Revision Petitions are filed.

11. Heard Sri A.Venkatesh, learned senior counsel appearing for the revision petitioner, and Sri Aadesh Varma, learned counsel for the respondents. Perused the entire material available on record.

12. Learned counsel for the petitioner-tenant contended that the first Appellate Court erred in holding that the petition schedule mulgi is situated in heart of the city surrounded by commercial and corporate establishments; that the respondents-landlords failed to produce any evidence for the purpose of establishing the prevailing rents in the locality where the petition schedule mulgi is situated; and therefore, both the trial Court and the first Appellate Court ought not to have entertained the RC filed seeking to enhance the rent. He further contended that first Appellate Court failed to state any reasons for enhancing the rent from Rs.20/- per square feet, as 3 2008(6) ALT 210 8 LNA, J CRP.Nos.4075 & 4076 of 2017 fixed by the trial Court, to Rs.30/- per square feet and prayed this Court to allow the Revision Petitions.

13. Opposing the said submissions, learned counsel for the respondents-landlords contended that the first Appellate Court taking into consideration the geological locality of the petition schedule mulgi i.e., in the heart of Hyderabad city at the Barkatpura Cross roads and the evidence of the tenant himself as R.W-1, rightly fixed the rent @ Rs.30/- per square feet for the petition schedule mulgi, which is fair and reasonable and therefore, the impugned common orders needs no interference by this Court.

14. Learned counsel for the respondents-landlords relied upon the judgment of Hon'ble Supreme Court in Rattan Arya's case (cited supra), wherein it was observed as under:-

"We are entitled to take judicial notice of the enormous multifold increase of rents throughout the country, particularly in urban areas."

15. This Court is in complete agreement with the said observation of Hon'ble Supreme Court. The facts and 9 LNA, J CRP.Nos.4075 & 4076 of 2017 circumstances in the said case are different from the facts of the present case. In the said judgment, Hon'ble Supreme Court has struck down Section 30(ii) of the Tamilnadu Buildings (Lease and Rent Control) Act, 1960 as violative of Article 14 of the Constitution of India.

16. The undisputed facts of the case are that the petition schedule mulgi is situated at Barkatpura Cross Roads, Hyderabad city; that the tenant has been in possession of the petition schedule mulgi since much prior to the purchase of the said property by the landlords in the year 1981; that by the date of purchase of the petition schedule mulgi by the landlords, the tenant has been paying monthly rent of Rs.300/- for the mulgi which is admesuring approximately 237.5 square feet; and that on repeated demands, the tenant has been paying rent of Rs.1,500/- per month.

17. For fixing the fair rent of a premises, the prime thing which has to be considered is the location of the said premises. In the instant case, the tenant himself as R.W-1 admitted in his cross- examination that the ground floor of petition schedule building 10 LNA, J CRP.Nos.4075 & 4076 of 2017 consists of mulgies; that there is a passage of about 5 to 6 feet in front of the mulgies in the ground floor; that the petition schedule building is located at Barkatpura Cross Roads and that a fly-over is passing through Barkatpura to Narayanaguda; that on either side of Barkatpura Cross Roads there are commercial establishments; that PSP, which is 5th building from the cross roads, is situated in one of the prime localities in Hyderabad; and that there are no vacant mulgies in and around the building where PSP is situated.

18. Thus, the above admissions of the tenant as R.W-1 falsifies his averments in the counter that the petition schedule mulgi is not situated in prime locality; that there is heavy traffic congestion and it is not suitable for commercial activity. Hence, it can be safely inferred that the petition schedule mulgi is situated in prime location in Hyderabad city which is surrounded by commercial and corporate establishments and that there is a parking space in front of the petition schedule building.

LNA, J CRP.Nos.4075 & 4076 of 2017

19. It is also to be noted that R.W-1 further admitted that he has been carrying on business in surgical equipment and medical business in the petition schedule mulgi, and supply medicines worth about Rs.6 to 7 lakhs quarterly to the Government Hospitals and that he engaged three employees and paying salaries @ Rs.3,500, Rs.7,000/- and Rs.8,500/-.

20. The above admissions show that the tenant is running the business successfully in the petition schedule mulgi. Therefore, his averment in the counter that a big drainage nala is passing by the side of the petition schedule mulgi which emanates foul smell and therefore, it is not fit for any commercial purpose is found to be incorrect.

21. Therefore, considering all the above aspects i.e., the location of the petition schedule mulgi and its viability for commercial use, fair and reasonable rent has to be fixed for the petition schedule mugli.

22. Here, it is apt to refer to Section 4 of Telangana Buildings (Lease, Rent And Eviction) Control Act, 1960, (for brevity 'the 12 LNA, J CRP.Nos.4075 & 4076 of 2017 Act') deals with determination of 'fair rent'. Sub-section (1) thereof reads as follows:

"The Controller, shall, on application by the tenant or landlord of a building fix the fair rent for such building after holding such inquiry as the Controller thinks fit.

23. In the context of determination of fair rent, Hon'ble Supreme Court in Suresh Gir's case (cited supra) at para-41 has interpreted the concept of 'fair rent' to mean that it should be synonymous with 'reasonable rent' - reasonable from the point of view of both tenant and landlord and observed as hereunder:-

"It undoubtedly excludes from its fold exorbitant rent and the abnormal or extraordinary circumstances. In view of the above, therefore, the Rent Controller would certainly be justified in allowing the marginal increase over the rent fixed under Section 4 of the Act. Viewed from any angle, therefore, I am of the view that the Rent Controller had jurisdiction to provide for periodical increase over the rent fixed and the interference into the said order by the appellate Authority in the present case is wholly unjustified."

24. The Hon'ble Supreme Court in the penultimate para held as under:-

LNA, J CRP.Nos.4075 & 4076 of 2017 "In the light of the foregoing discussion, we hold that sub- section (2) of Section 4 of the Act, 1960, is unconstitutional. Sub-sections (3) and (4) have no independent existence apart from sub-section (2). The learned single Judge was right in striking down the said provisions in Ataur Rahman's case. We further make it clear that sub-sections (2) to (4) of Section 4 do not get revived by reason of the subsequent pronouncement of Supreme Court in Sant Lal Bharti's case (supra), as discussed above.

25. By applying the ratio laid down in the aforesaid judgment and the harmonious reading of Section 4 of the Act, it is evident that the Court has power to determine the fair rent without regard to the criteria laid in sub sections (2) to (4) of Section 4 of the Act.

26. As regards the periodical increase of the rent and the quantum to be increased, Hon'ble Supreme Court in Jupudi Parthasarathy's case (cited supra), at para 15 of the judgment held as under:-

"Section 6 of the Act provides the landlord a right to claim increase in the fair rent only if taxes and cesses payable by the landlord is enhanced after fixation of the rent. If such contingency does not arise, in no case the landlord would be entitled for enhancement of rent from what was 14 LNA, J CRP.Nos.4075 & 4076 of 2017 fixed from the date of application. In this view of the matter, therefore I am of the opinion that to offset the time gap between the date of application and the date of adjudication, the Rent Controller would certainly have jurisdiction to order the periodical increase in the fair rent as has been done in this case. What the quantum of such periodical increase as to whether it should be 5% or 10% or more would have to be taken by the facts of each case."

27. In the light of the aforesaid judgments and taking into consideration the contentions advanced on behalf of the tenant and the landlord and also the relevant factors and taking an overall view of the facts of the instant case i.e., the geological location of the petition schedule mulgi in the heart of Hyderabad city and being surrounded by commercial and corporate establishments and the fact that the tenant has been in possession of the rented premises since much prior to 1995 and has been successfully running business in the petition schedule mulgi, as deposed by the tenant himself as R.W-1, this Court is of the considered opinion that the Rent Controller has rightly enhanced the rent of the petition schedule mulgi to Rs.20/- per square feet from the date of 15 LNA, J CRP.Nos.4075 & 4076 of 2017 filing of the RC with future enhancement at 10% for every two years on the existing rent.

28. A perusal of the impugned common order passed by the first Appellate Court would show that it has not recorded cogent reasons for further enhancing the rent fixed by the Rent Controller from Rs.20/- per square feet to Rs.30/- per square feet with a benefit of 10% of future enhancement on the existing rent for every two years and there is no basis for such enhancement and as such, the first Appellate Court is not justified in further enhancing the rent of the petition schedule mulgi and therefore, this Court deems it appropriate to interfere with the order under revision.

29. Accordingly, Civil Revision Petition No.4076 of 2017 is allowed and the impugned order dated 02.06.2017, passed by the Chief Judge, City Small Causes Court, Hyderabad in R.A.No.170 of 2014 is set aside, thereby confirming the order dated 18.03.2014, passed by the II Additional Rent Controller, Hyderabad in R.C.No.328 of 2010. Consequently, CRP.No.4075 of 2017 is dismissed. There shall be no order as to costs. 16

LNA, J CRP.Nos.4075 & 4076 of 2017

30. Pending miscellaneous applications, if any, shall stand closed.

__________________________________ JUSTICE LAXMI NARAYANA ALISHETTY Date:03.05.2024 dr