Gyan Chand Jain vs Additional District Judge, Court ...
2013 Latest Caselaw 814 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Reserved.
 
Writ Petition No. 74 (R/C)/2008 
 
Gyan Chand Jain 
 
Vs. 
 
A.D.J. XIII, Lucknow and others.
 
Connected with
 
Writ Petition No. 10 (R/C)/2008 
 
U.P. Export Corporation Limited 
 
Vs. 
 
A.D.J. XIII, Lucknow and others
 

 
Hon'ble Shabihul Hasnain, J.

There are two cross petitions; one filed by Sri Nishank Rastogi and the other by Shobhit Mohan Shukla. Both were heard at great length. Useful assistance was provided by the Law Trainee of this Court Km. Twishi Srivastava.

Both the writ petition No.74 (R/C)/2008 (Gyan Chand Jain Vs. A.D.J. XIII, Lucknow and others) and writ petition No.10 (R/C)/2008 (U.P. Export Corporation Limited Vs. A.D.J. XIII, Lucknow and others) have been filed assailing the order dated 9.3.2007 passed by A.C.M. Ist Lucknow the trial court and order dated 7.9.2007 passed by A.D.J. XIII, Lucknow, the Appellate Court.

Facts as stated by both the parties are that petitioner of writ petition No.74 (R/C)/2008 Gyan Chand Jain is the landlord of a building bearing House No.31/29, Mahatma Gandhi Road, Hazratganj, Lucknow and it is well within the ambit of U.P. Act No.13 of 1972. Opposite party No.3 i.e. U.P. Export Corporation Limited is a tenant of the ground floor of said premises measuring about 2320.24 sq. feet from where it runs its show-room as Gangotri. U.P. Export Corporation Limited is a company incorporated under the provisions of Indian Companies Act, 1956. With effect from 15.12.1971 the premise in question has been under the tenancy of U.P. Export Corporation Limited which is State Government Undertaking and it used to pay rent of Rs.1725/- per month. Provisions of U.P. Act No.13 of 1972 put a rider and embargo upon the landlord that the landlord of the premise let out to public sector corporation can not bring forth a suit for release under Section 21 of U.P. Act No.13 of 1972 inspite of his pressing and bonafide needs. But with a view to compensate the landlords in a most equitable manner, the legislature had introduced Section 21 (8) under U.P. Act No.13 of 1972 by virtue of which the landlord of premise under the Tenancy of a Public Sector Corporation can prefer an application for enhancement of month rent equivalent to 1/12th of ten percent of the market value of the tenement. Petitioner Gyan Chandra Jain on 19.11.2002 moved an application under Section 21-A of U.P. Act No.13 of 1972 for enhancement of monthly rent of premise in question before opposite party No.2 I..e Ist Additional City Magistrate-Rent Control and Eviction Officer, Lucknow which was registered as Case No.91-ACL Ist of 2002 (new number 33/2007) (Gyan Chandra Jain Vs. U.P. Export Corporation Limited) annexed as annexure No.3. In this application the petitioner submitted a report of one registered valuer namely, Sri J. N. Dubey and opposite party submitted report of one registered valuer Er. K. K. Agarwal. Opposite party No.2 in its findings stated that since there is great inconsistency between these two evaluer submitted by both the parties, it has proceeded to determine the rent allegedly on the basis of standard rate fixed by the Collector, Lucknow. While determining the rent opposite party No.2 did not add area of appurtenant arcade and also did not add the cost of land over which the super structure of premise in question stands. Opposite party No.2 fixed Rs.43,584/- as monthly rent of premise in question, annexed as Annexure No.3.

Feeling aggrieved of the aforesaid order dated 2.3.2007 passed by opposite party No.2 the opposite party No.3 U.P. Export Corporation Limited preferred a rent appeal No.8 of 2007 (U.P. Export Corporation Limited Vs. Gyan Chandra Jain) before District Judge, Lucknow contesting therein that the rent of Rs.43,584/- as fixed by opposite party No.2 is too much which has been arbitrarily enhanced by opposite party No.2 and simultaneously petitioner also preferred a rent appeal No.15 of 2007 (Gyan Chandra Jain Vs. U.P. Export Corporation Limited) before the District Judge against the same order contesting therein that the amount of monthly rent of Rs.43,584/- as fixed by opposite party No.3 is too meager and has been fixed arbitrarily and without assessing the exact market value of the premise in question because the market value of premise in question includes the cost of super structure plus cost of land over which super structure stands and also the cost of appurtenant arcade area of 444.38 sq. feet which is in use and occupation of opposite party No.3.

Since both the rent appeals were against the same order both the rent appeals were taken together and were decided by opposite party No.2 i.e. Additional District Judge, Lucknow vide order dated 7.9.2007, as contained in annexure No.1. Opposite party No.1 while disposing of these appeals added area of appurtenant land in cost of land and partly allowed the appeal of petitioner by increasing rent to Rs.53907.50/- and dismissed the appeal of opposite party No.3. Against said impugned order petitioner approached to this Court vide writ petition No.74 (R.C.) of 2008 (Gyan Chandra Jain Vs. A.D.J. XIII, Lucknow and others) and opposite party No.3 vide writ petition No.10 (R.C.) of 2008 (U.P. Export Corporation Limited Vs. A.D.J. XIII, Lucknow and others).

Petitioner has argued that the impugned order suffers from illegal discrimination because while determining the market value of the premises in question opposite party No.1 did not consider the market value of exemplars i.e. Bank of Baroda a nearly building NO.24 is paying rent at the rate of Rs.46 per sq. feet while another nearly building no.11 I.C.I.C.I. Bank is paying rent at the rate of Rs.65/- per sq. feet. Petitioner has quoted relevant para of impugned order which reads as under:-

"14-izkFkhZ Jh Kku pUn tSu ds fo}ku vf/koDrk us ;g rdZ izLrqr fd;k gS fd Hkou la0&11 egkRek xka/kh ekxZ gtjrxat tks fookfnr lEifRr ds fcYdqy djhc gS dks fnukad 1-7-01 dks vkbZ0lh0vkbZ0lh0vkbZ0 cSad dks [email protected]& :i;s izfr oxZfQV dh nj ls mBk;k x;k gS] ftldh iV~Vk foys[k dh lR; izfrfyfi nkf[ky fd;k x;k gS rFkk blh izdkj Hkou la0&24 egkRek xka/kh ekxZ gtjrxat] y[kuÅ tks fookfnr lEifRr ds fcYdqy djhc gS dks fnukad 1-1-2000 dks cSad vkWQ cM~kSnk dks [email protected]&:i;k izfr oxZ fQV dh nj ls fdjk;s ij mBk;k x;k gS] rFkk mldh iV~Vk foys[k dh lR; izfrfyfi nkf[ky fd;k x;k gSA ,slh fLFkfr esa fookfnr nqdku dk ewY;kadu mDr ds vuqlkj fu/kkZfjr fd;k tk;sA eSa izkFkhZ ds fo}ku vf/koDrk ds mDr rdZ ls lger ugha gwa] D;kasfd vkbZ0lh0vkbZ0lh0vkbZ0 cSad ,oa cSad vkWQ cM~kSnk ,d izkbosV QeZ gS] fookfnr nqdku jkT; ljdkj ds v/khu gSA ,slh fLFkfr esa mldk fdjk;k ftykf/kdkjh] y[kuÅ }kjk o"kZ 2002 esa fu/kkZfjr fdjk;k ds vk/kkj ij gh yxk;k tkuk mfpr gksxkA**

Petitioner has submitted that view of opposite party No.1 i.e. ground for non-consideration of market value of exemplars is that exemplars are private firm while tenant in present matter is government is not tenable in the eyes of law as it is not a legal ground and suffers from arbitrariness.

Petitioner has taken a contention that trial court as well as appellate court did not add the cost of land while evaluating the market value of premise in question.

Petitioner has taken another contention that D,M. Circle Rate list is the last resort and is to be taken into account when no other mode of calculating and arriving at the monthly rent is available as in Section 21(8) of U.P. Act No.13 of 1972. There is a concept of market value which is almost higher than the cost of the building. In the matter of Deepak Kumar Tyagi and others Vs. A.D.J. Saharanpur and others, ALR 1992 (24) Allahabad page 24, it has been held that exemplars of similar property sold in particular area or nearly relevant date can be taken into account and further has been held that the circle rate can not determine the value of the land conclusively and the circle rate is merely a guideline. In the matter of Gurmeet Kaur Vs. IIIrd A.D.J. Saharanpur and others connected with Punjab National Bank Vs. IIIrd A.D.J. Saharanpur, ARC 2003 (1) Allahabad page 553, it was held by their Lordships that circle rate fixed by the Collector for the purposes of Stamp Duty can not be taken to be final as regards market value of the land, location of the property is important.

In the matter at hand, the shop in question is situated in the most strategic position of main road at Hazratganj, Lucknow with all facilities and amenities at hand. In the present matter, the valuers' report was available and certified copies of nearby buildings were also available and the D.M. Circle Rate list was also available but the trial court as well as appellate court did not enhance the rent as per evaluers report nor they enhanced the rent as per the exemplars. But took the last resort of D.M.'s circle rate.

The petitioner has further argued that at this juncture provisions of Section 21 (8) iof U.P. Act No.13 of 1972 provides that the landlord is at liberty to get his rent revised every five years and, as such, further enhancement was due twice but opportunity could not be availed by the petitioner because of the pendency of litigation. If two enhancements were allowed the rent naturally would have enhanced manifolds. As in year 2002 the value of commercial land of Hazratganj was Rs.15100/- per sq. meter and in the year 2012 the value of commercial land of Hazratganj is Rs.55000/- per sq. meter. In the same manner the rental value as fixed by the D.M. In the year 2002 was Rs.100 per sq. meter and now in the year 2012 the rental value is Rs.425 per month per sq. meter.

Opposite party No.3 has argued that the opposite party No.2 while absolutely discarding the report of the registered valuer submitted by the petitioner and affidavit submitted by the said valuer solely relied upon the report of registered valuer Sri J. N. Dubey while determining the rent to the tune of Rs.43,584/-. This conduct of the opposite party No.2 is self explanatory as to how he has failed to provide fair opportunity to the opposite party No.2 and as to how the report of the value which was in support of the opposite party No.3's case was discarded. As a matter of facts the opposite party No.2 has failed to discuss the contents of the reports submitted by the valuer.

Opposite party No.3 has further argued that the opposite party No.2 while passing the impugned order dated 9.3.2007 has recorded a finding that there is a great inconsistency between the two reports of the valuer submitted by the petitioner and opposite party No.3, therefore, it has proceeded to determine the rent allegedly on the basis of standard rates fixed by the Collector, Lucknow. However, while determining the rent as per the Collector's rate, the opposite party No.2 without any logic multiplied the entire rate of rent by 300 for assessing market value and then dividing it by 120 to calculate the monthly rent.

It is further submitted by opposite party No.3 that the impugned judgment and order dated 7.9.2007 passed by opposite party No.1 is absolutely illegal and erroneous as the opposite party No.1 while partly allowing the appeal filed by opposite party No.3 has included the external Arcade/Verandah in tenancy of the petitioner and determined the rent for the said portion also. In this regard, it is stated that Verandah is to be used as public passage and is not under the occupancy/tenancy of the opposite party No.3 in any manner.

Further submission of opposite party No.3 is that the learned Additional District Judge, Lucknow has committed much more error than the Additional City Magistrate-I, Lucknow in as much as , it has discarded the report of Er. K. K. Agarwal for technical reasons and by doing so, the merits of the said report have been discarded. The appellate order is also absolutely illegal and erroneous and is based on perverse findings and thus is liable to be set aside.

In a supplementary affidavit filed by the Corporation in writ petition No.10 (R/C) of 2008, it has annexed the House Tax Bill submitted by Nagar Nigam, Lucknow for the year 2012-13 in which the annual value of the house in question has been shown to be Rs.1,16,000/-. The order of Prescribed Authority as well as Appellate Authority both are based on calculation of market value having been done on the circle rate of District Magistrate prevailing in the year 2002. It is submitted that the circle rate cannot be a sole determinator of market value of the property.

It is further submitted by opposite party No.3 that in the instant case when two reports of valuers were available on record, the Prescribed Authority as well as Appellate Authority ought to have taken into consideration the reports of valuers submitted by the Corporation. The finding that report of valuer submitted by the opposite party No.3 recorded in paragraph 15 of the judgment of the Appellate Court for discarding the said reports is not tenable and the said report was on oath and, therefore, it was admissible in evidence. So far as the inclusion of Arcade under tenancy of the Corporation as held by the Appellate Authority is based on surmises as the portion beneath the Arcade is being used as passage by the commuters. Moreover, there was no matterial available which may show that Arcade was or is under the tenancy of the Corporation and the building in question has been erected on a piece of land let out to the landlord/his predecessors in interest by Lucknow improvement truth for building purpose. The title of the landlord over the land in question is of a lessee.

However, the petitioner in counter to plea of lessee as raised by opposite party No.3 in preceding paragarph has submitted that the present matter is between the landlord and the tenant and is governed by Section 21(8) of the U.P. Act No.13 of 1972 which reads as under:-

"(8) Nothing in clause (a) of sub-section (1) shall apply to a building let out to the State Government or to a local authority or to a public sector corporation or to a recognized educational institution unless the Prescribed authority is satisfied that the landlord is a person to whom clause (ii) or Clause (iv) of the Explanation to sub-section (1) is applicable.

Provided that in the case of such a building the District Magistrate may, on the application of the landlord, enhance the monthly rent payable therefore to a sum equivalent to one twelfth of ten per cent of the market value of the building under tenancy, and th rent so enhanced shall be payable from the commencement of the month of tenancy following the date of application:

Provided further that a similar application for further enhancement may be made after the expiration of a period of five years from the date of the last order of enhancement."

A perusal of Section 21(8) makes it clear that the relationship of landlord and tenant has to be considered and the entire emphasis by the statute has been focused on the relationship of landlord and tenant and the statute has never demanded or required the concept of ownership. In Section 21(8) in proviso the wordings used are - "on the application of the Landlord, enhance the monthly rent....". But in the matter at hand the Landlord in addition to is also the lessee, of the premises in question, with transferable rights. The lease deed of the premises in question is on record which is for a period of 90 years since 1936 and the same is fully valid till 2026.

Court has heard both the counsels and perused the records. After going through all the points court is of opinion that rent of Rs. 53,907.50 paid by opposite party no.3 to petitioner is meager amount. Government cannot be allowed to have a license to pay rent less than exemplars when it is competing with others in a market. It has to be governed by same market factors which govern other non government entities. When Government is performing a non sovereign commercial function, it is on the same footing as other competitors of market. Thus Government being on the same pedestal will be governed by same market factors and must have paid rent to petitioner as paid by exemplars of premise in question. In case of Deepak Kumar Tyagi (supra) it was held that market value of property can be determined by producing exemplars of similar property. Thus court comes to the conclusion that rent of premise in question must be determined in accordance to rent paid by exemplars.

Secondly petitioner is contesting the case since 11 years, within such period, he could have revised his rent twice as provided in section 21(8) of Act, which naturally will enhance the rent. And since petitioner is contesting since 11 years, there has become a huge difference in market value of premises in question. This factor also leads to conclusion for further enhancement in rent.

As far as inclusion of arcade in determining the rent is concerned, court comes to the conclusion that such arcade should be added while determining he rent. Petitioner has annexed in annexure no.5 lease deed of exemplar wherein respective arcade of that building forms part of lease deed. In the same manner annexure no. 6, lease deed of another exemplar also contains its respective arcade. Thus taking into consideration the lease deed of exemplars this is very clear that while executing a lease deed, appurtenant land arcade does form the part of document and hence it is part of property which should be taken into consideration while determining the rent.

Opposite party no 1 and 2 has committed an error by not adding the cost of land in determining rent. In State of U.P. and another v VII Additional District Judge and others SC 1992 it was clearly stated that building means roof structure including the land underneath the said structure. Thus in light of above judgment court comes to the conclusion that cost of land should have been added while determining the rent.

Opposite party no.1 has committed no error in discarding the valuer's report of opposite party no.3 i.e. Er. K.K. Agarwal because it was not sworn on oath. In case of State of U.P. and another v Additional District Judge (VIII) Bareilly and another 1995 it was held that report of valuer not supported by affidavit is liable to be rejected.

Considering all the facts, circumstances, law on the subject, exemplars and the calculations, the Court comes to the conclusion that Rs.1,00,000/- per month be paid as rent of the shop to the applicant-petitioner per month.

The writ petition is, thus, allowed with the direction to the opposite party No.3 U.P. Export Corporation Limited now known as U.P. Handicrafts Corporation Limited through its officer in-charge, 'Gangotri' show room, 31/29, Mahatma Gandhi Marg, Hazratganj, Lucknow to pay a sum of Rs.1,00,000/- per month as rent to the petitioner w.e.f. 19.11.2002. Petitioner shall also be entitled for enhancement of rent in future whenever it becomes due in accordance with law.

Judgment and order dated 7.9.2007 and judgment and order dated 9.3.2007 respectively passed by Additional District Judge, Court No.13, Lucknow and A.C.M.-I/Rent Control and Evicting Officer, Lucknow respectively, as contained in Annexure No.1 and 2 are modified to the above extent.

Petition is allowed.

Dt.12.4.2013.

RKM.