N. Someshwar Rao, vs Padma Nagabushanam,
2024 Latest Caselaw 1887 Tel

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,

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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/-

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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

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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

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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

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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

AIR 1986 SC 1444

1998(1) ALD 25 (D.B)

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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

2008(6) ALT 210

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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

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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

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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

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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:-

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"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

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

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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.

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