# 0 :E v. K. C. RAMACHANDRAN & ORS

- **Citation:** [1974] 2 S.C.R. 629
- **Court:** Supreme Court of India
- **Decided:** 1974
- **Case number:** Civil Appeals Nos. 50 of 1968
- **Bench:** A.N. Ray, H.R. Khanna, K.K. Matiiew, A. AlAvlRISWAM!, P.N. Bhagwatt
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/0-e-v-k-c-ramachandran-ors-6153
- **Pages:** 21

## Headnote

·
Tttmil Nadu Buildingt (Leau and R<nl Co/1/ro/) Act (IS of J 900). S. 4(1), ?-
Definition of .. landlord'' and .. t~nant" und~r -Appl,cability
10
controctuol
ltnandtr and Sltl.luiory t~uauci~s-Ft:-ration of fair re11t-LonJ/ord h·~rMr- ~nit:kd
to opp/y /ur fixation of folr rent tlltting suhsisttnce of COJI/ractua/ ttnanc;-
lnltrpre tar/an of sta!ut~s.
· ConstitJJtio, of /Mia, Art. 141-Aud pr~c~dt'ttls-G~n~ta/ ohunalton.r in Suprmte
Cuurl deciJiorr-BindinK tl(Jtu,·e of
Erldtnu Act, 1972. & <. 92- Vttr/atiun in P<"•miJsion of ugister~ le= dudOra/ tridnrce rrlatdutK l'tll ku/on barr~d.
On lhe lcnants' appeal, the Full !lcnch of the Madrns High C"ourt held that the
Act COntrols both contmctual und Sl:ttutory tenancies and II enables borh landlords and tenants to seck I he be""lit of lixalion of fair r<nt.
There:~ftcr, ~e. matre~
<:irne up bdore a Sioltlo Judge of the High Court who applying the prOVISions ~~
the Act to I he facts of I he case held that the Act did not apply to the P"'mJSC:S .10
1
qiJ<Siion. The Division IJench reversed this decision. In the nppeal by spcoa
kav~ the tenants mainly contended th~t a landlord h;~S no right to apply for :.he
h.aauory C'!f a fair rent nt a figure higher than the contr:~ctu:tl rent, where then: ' a5
• •un. .. uoc eontrJc"t of !<nancy.
Dismi>sioa the appeal,
r .
fiELD : (!>Cr majorily-Mathcw and Oh•s"-ati, JJ. Contm)
The Pre.tnt Act which replaces lhc 1949 Act adopts a co~1pletcly new ";fJ"'::J"
"!_it\ o .... o and provi<ks for every conlingcncy, iJ;.,i~1t~e "'t~~'is'b~':e ~~l~,a~cly
a ... kn.lnl Tho provisions of U1e Aclshow that
a ms
be ~ ir both to the
Pl~d on the basis that fJir rent wa• lobe ft.rd wluch wa~ 10 f •
ts nc«<<d
1
•n.Jior.ds u well QJ to the tenanls, and that_ only lhe poor~~ ci~~e~n~~ly for the
Pt<>Cttt!OO. The assumplion lhat tho Act hke aJJ !".nt :u:ts. :f.. Acl
It u clear
r~IOQ Of tellOIDis Js not Warrant«! by tbe prOVISIOnS of hie during lhe COfllrJCt
<fort, tha1 lhe fair rent under lhe present Acl !' pay~ C Fj
i'trtOd .u "<If as afr<r the expiry of the conlract pcnod. [63~ -
c
I
r
II
The
·
5Chc ,e of its own and it is intended
10
~nalysis of the A <I sh?wl that_ 11 hft,a h · ,"lrJclual tan:mcc.:s.. the detini-
. Pro\oJ<le a compl<le code rn respc.;t o
1 co 1
h Act , p lies lo contractual
:!;:: o_f the term "landJonJ" and '"tenant" show th;Jt 1 ~heir ~tdlonls.. On some
JICIOI "' well as to Citses of statutory l<nants and nnol be urauC\1 that such
~f'J<ccl l!l'll<rul principles aovcmcng all R~nt ~:n•:he Act dearly Jays dowa that
bol iOn can only be for I he benefit of the ten'!nts. 10
f C •
t
A dose ~dmg of
Ill. h J~oolords and lenunls can apply for lu~ro~~.J"~~r :."n~ ·it is payable by who-
-:u:t•howa that Ute fair rent is ti.xcd for 1 e
1
tenant
What is fixed
f:<' 1$ lb,: lcn<~nt whether a coolra<lual tenanl or
1
•1·~~10:/ who opplies for fix a I ion
.,.~!he fair "'at payable by the •~na.nr or to tll<h. an ,.r~ an incident of the tenure
'-".rent bur fair rent for the bu•ldmJ so met 101 1
'•&ardmc the buildine. [637FJ
;-;;
630
SUPREME COURT Ri>PORTS
[1974] 2 s.c.R.
The general observations to the contrary in Bhai)'D Punja/e~l Bhac>rancfd;n v
Dave Bha_rrNat
Pra~lmprasad (1963)3 S.C.R. 312 nnd Manuj~nclra v. Purtnd,;
Ptosad [1967] 1 S.C.R. 475, held obrter.
Sri Brij Raj Krishna v. S. K. Shaw and Bros. [19511 S.C.R. 145, Hem Chand
v. Sham D~vl, !.L.R. ( 1955] Punj, 36, R. Kris/mamttrtlly v. Parthasarath.•• A.I.R.
19~9 M1d. 780, dis,inguished.
Abb:ultal's case ( 19641 S S.C.R. 157 and Mangift1l v. Sngar~flallll Rat hi [1964]
S S.C.R, 239, referred to.
P~r l>fathew and Dhagwati, JJ : Two basic
consi.<lcrations
must
guide
O:Jr :lpj>:O~Ch to th: q~:stjon wh:ther a landlord can, durmg the sub;istcnce Of the
c~3tractt1llt:'lli\Cf apply ror fi<ation or fair rent under section 4(t) of the Act
Tn: fi:n i; thu th:'lg.-::j r~nt w:-tich is th: result of contract b:twccn the parli~
mJit cJ~tinu: to bind th:m so long as th: contract sub;ists, unless there is ~ny.
thing in th: statut

## Text

_Characters 0–39,542 of 70,118. This is a partial read: ask again with offset=39542 for what follows._

r
I
l
629
I II
RAVAL & CO.
11
.0
:E;
v.
,
K. C. RAMACHANDRAN & ORS.
December 11. 1973
[A.N. RAY, C.J., H.R. KHANNA, K.K. MATIIEW, A. AlAvlRISWAM!
AND P.N. BHAGWATT, JJ.j
·
Tttmil Nadu Buildingt (Leau and R<nl Co/1/ro/) Act (IS of J 900). S. 4(1), ?-
Definition of .. landlord'' and .. t~nant" und~r -Appl,cability
10
controctuol
ltnandtr and Sltl.luiory t~uauci~s-Ft:-ration of fair re11t-LonJ/ord h·~rMr- ~nit:kd
to opp/y /ur fixation of folr rent tlltting suhsisttnce of COJI/ractua/ ttnanc;-
lnltrpre tar/an of sta!ut~s.
· ConstitJJtio, of /Mia, Art. 141-Aud pr~c~dt'ttls-G~n~ta/ ohunalton.r in Suprmte
Cuurl deciJiorr-BindinK tl(Jtu,·e of
Erldtnu Act, 1972. & <. 92- Vttr/atiun in P<"•miJsion of ugister~ le= dudOra/ tridnrce rrlatdutK l'tll ku/on barr~d.
On lhe lcnants' appeal, the Full !lcnch of the Madrns High C"ourt held that the
Act COntrols both contmctual und Sl:ttutory tenancies and II enables borh landlords and tenants to seck I he be""lit of lixalion of fair r<nt.
There:~ftcr, ~e. matre~
<:irne up bdore a Sioltlo Judge of the High Court who applying the prOVISions ~~
the Act to I he facts of I he case held that the Act did not apply to the P"'mJSC:S .10
1
qiJ<Siion. The Division IJench reversed this decision. In the nppeal by spcoa
kav~ the tenants mainly contended th~t a landlord h;~S no right to apply for :.he
h.aauory C'!f a fair rent nt a figure higher than the contr:~ctu:tl rent, where then: ' a5
• •un. .. uoc eontrJc"t of !<nancy.
Dismi>sioa the appeal,
r .
fiELD : (!>Cr majorily-Mathcw and Oh•s"-ati, JJ. Contm)
The Pre.tnt Act which replaces lhc 1949 Act adopts a co~1pletcly new ";fJ"'::J"
"!_it\ o .... o and provi<ks for every conlingcncy, iJ;.,i~1t~e "'t~~'is'b~':e ~~l~,a~cly
a ... kn.lnl Tho provisions of U1e Aclshow that
a ms
be ~ ir both to the
Pl~d on the basis that fJir rent wa• lobe ft.rd wluch wa~ 10 f •
ts nc«<<d
1
•n.Jior.ds u well QJ to the tenanls, and that_ only lhe poor~~ ci~~e~n~~ly for the
Pt<>Cttt!OO. The assumplion lhat tho Act hke aJJ !".nt :u:ts. :f.. Acl
It u clear
r~IOQ Of tellOIDis Js not Warrant«! by tbe prOVISIOnS of hie during lhe COfllrJCt
<fort, tha1 lhe fair rent under lhe present Acl !' pay~ C Fj
i'trtOd .u "<If as afr<r the expiry of the conlract pcnod. [63~ -
c
I
r
II
The
·
5Chc ,e of its own and it is intended
10
~nalysis of the A <I sh?wl that_ 11 hft,a h · ,"lrJclual tan:mcc.:s.. the detini-
. Pro\oJ<le a compl<le code rn respc.;t o
1 co 1
h Act , p lies lo contractual
:!;:: o_f the term "landJonJ" and '"tenant" show th;Jt 1 ~heir ~tdlonls.. On some
JICIOI "' well as to Citses of statutory l<nants and nnol be urauC\1 that such
~f'J<ccl l!l'll<rul principles aovcmcng all R~nt ~:n•:he Act dearly Jays dowa that
bol iOn can only be for I he benefit of the ten'!nts. 10
f C •
t
A dose ~dmg of
Ill. h J~oolords and lenunls can apply for lu~ro~~.J"~~r :."n~ ·it is payable by who-
-:u:t•howa that Ute fair rent is ti.xcd for 1 e
1
tenant
What is fixed
f:<' 1$ lb,: lcn<~nt whether a coolra<lual tenanl or
1
•1·~~10:/ who opplies for fix a I ion
.,.~!he fair "'at payable by the •~na.nr or to tll<h. an ,.r~ an incident of the tenure
'-".rent bur fair rent for the bu•ldmJ so met 101 1
'•&ardmc the buildine. [637FJ
;-;;
630
SUPREME COURT Ri>PORTS
[1974] 2 s.c.R.
The general observations to the contrary in Bhai)'D Punja/e~l Bhac>rancfd;n v
Dave Bha_rrNat
Pra~lmprasad (1963)3 S.C.R. 312 nnd Manuj~nclra v. Purtnd,;
Ptosad [1967] 1 S.C.R. 475, held obrter.
Sri Brij Raj Krishna v. S. K. Shaw and Bros. [19511 S.C.R. 145, Hem Chand
v. Sham D~vl, !.L.R. ( 1955] Punj, 36, R. Kris/mamttrtlly v. Parthasarath.•• A.I.R.
19~9 M1d. 780, dis,inguished.
Abb:ultal's case ( 19641 S S.C.R. 157 and Mangift1l v. Sngar~flallll Rat hi [1964]
S S.C.R, 239, referred to.
P~r l>fathew and Dhagwati, JJ : Two basic
consi.<lcrations
must
guide
O:Jr :lpj>:O~Ch to th: q~:stjon wh:ther a landlord can, durmg the sub;istcnce Of the
c~3tractt1llt:'lli\Cf apply ror fi<ation or fair rent under section 4(t) of the Act
Tn: fi:n i; thu th:'lg.-::j r~nt w:-tich is th: result of contract b:twccn the parli~
mJit cJ~tinu: to bind th:m so long as th: contract sub;ists, unless there is ~ny.
thing in th: statute which expressly or by nCCC".ssary implicarion over-rides the con.
tra~t. It is to cJunteract th: inju>ricc resulting from inequality in bargaining (lOwer
~3d t3 b~ing abJut s~cial or disrrlburivcjustic.: that socinllesislalion interferes with
s1nctily of c)ntrnct.
O;din~rily, we do not find and indeed it would be a strange,
and rath:r incom~r<h:nsible ph!nomcnon, that legislation intervenes to disturb
the stnetity of cJntract for ch: b:nefit of a stronger party who does nor need rhc
p:at::tiv~ h 1nd of th: legislature. S:condly the Act has been enacted illlcr alia.
with th: obj:ct of cJntrolling renls of rcsidontial and non-residential buildings an~
preve1ting u~rets)nab~" CliC!ion of tenants. Tamil Nadu Act 18 of 1960 js in its
,~; llti 11 ~-un~.er as t)s) in its object and purpososimilar to what may conveniently
be l:s;:ib!d rent control legislation, in other States, such as Mnharashrra,
GJjtrat, W!st B:nga) and Mldhya Pradesh.Tbegenernl purpose nod intendment
of re3t c~ntrollc&islarion and its positive thrust and emphasis on the prorection of
th: t:nant ctnnot bo lost sight of when we are construing a sin~ilar legislation like
the Tamil Nadu Act 18 of 1960. [642C]
81,2/ya PuJt}alal B~agwanddbt v. Da>·t Bhal(watprasad Prabhuprasad (19631 3
S.C.R. 3t2, ManiJ/ La/ v. Suqar~iland Roth/, [1%4] 5 S.C.R. 239, and Manujtndra
v, Purelliu P11>sa:J (t967] 1 S.C.R. 475, referred to,
Htving rcJ;prd to the b~,ic character of the statute as n rent coutrollegislation 1
~nd th: sch:m: of 1ts provisions and reading sec. 4{1) in its conrcxtual setting and iR
rho light of th: oth:r Provisions of the stalute, the conclusion is incs~apnble that the
w;~rd "landlord" in sec. 4(1) is used in a limted sense and it does not include con·
tractutllandlord. The landlord docs not have the right to apply for fixation of fair
rent during the subustcnce of the contractual tenancy, lt is only when tho contract of t:n~ncy isilwfully determined that he becomes en tilled tO apply (Or fi.<SiiOD
of fair rent, for it is only then that he can rea>ver fair rent higher than the agreed reO!
from the sea tutory tenant, there beinl no contract of tenancy to bind him down co
the agreed rent. [6460)
•
D
E
t
(2) Pn m~jority : G:neral obscmlliolli in earlier decisions of this Court should
b: C>llfil:d to the facts or tho;e case. Any general obscrvntion cannot aPplY in
lnt:'t"!linc th• P.-ovisions of an Act unles• this Court hns applied irs mind to and
an~)VI:d th: p:ovi,ions or that plrticular Act. Thcrdore, the observations _In
(1967) I S.C.R. 415, that rent act! •~= '>Jt 1C'Jin~rily inrend~d to tnrcrefcre w,ch
c~ntr~ctu~l l:~ses and are Actt for the proteclion of tenauts and are cons.:quenrly
(;
r~urictiveand not enabling conferring no new right but resrricting the existing rishl<
erth!r under the c~ntract or under rh: g:nerallaw should not be held to applY to
Mil rent Act1 irt!lp;ctive of tho s.::h:m: o( th01C nets nnd their provi~ioDs. The
'""~"I '\.~! ·Ji'J ~'l pr~c::d on th: b1sis tltar tl\c lc!!i>latlon regarding; rent control
wu only for tltc b:nefil of the tenmnts. It wanted the JeaisJarion to be fair both to
the landlord and thctenant.t8HB]
(P4r Mathew and llhaJWati.JJJ, The mea oinK of the term 'landlord' muit_not be
cn'i1:;J I? thlliiV!n in th, d:finition or to tu oruinury etymological mealll01 bu;
II
m lSI b!. u1-J;nCQOd In the cJnte1t of the JettinJI in which it occurs, and the •ch•';j)'
a~d .~bJ.~t of the ACI,
The PrOvi\ions Of the A~t. parti,.ularl:( of J<C. 7, aro clca 10
r .ltro;h\4 ln c'lltactcr and not cnabhnll provisions cmpowcrlllll the 1•0 <110~d 1
r.;.c>vr,r th:fJlrrc:tt w~:rc it Is hi&henhanthca11reed rent. This is thoonlyrattoua
1
A
B
c
RAVAL & CO, V. K. C. RAMACHAND~N (Alagiriswami, /.)
631
~onstruction which can be placed on the relevant Provisions of the Act
relatir.&
to control ofrent and such a construction is not only compelled bY 8Hn·mar ar.d
Jananase but aJso accords with the broad ge'fieral consideratic11s in intctPJctirg tl"e
rent control legislation. (646Bl
Cot v. Ho'kts (1890) A.C. 15, and Whtthtrtd v. Call'utta (1842) 5 Scrtt. N. R.
409 ,referred to.
(3) Any variation of rent reserved by registered tease deed must be made bY anothe;
registered instrument. The agreement between the landlord and the ter.2111 by" hich
the rent was increased being in variation of a written contrrct, evidence of that wa~
barred under section 92 of the Evidence Act.
CiVIL APPELLATE JURISDICTION: Civil Appeals Nos. 50 of 1968 and
1201 of 1970.
From the judgment and Order dated the 20th January 1966, and
26th November 1968 of the Madras High Court in Writ Appeals
Nos. 1124 of 1963 and 153 of 1966.
K.S. Ramamurtlry and S. Gopalakrishnan, for the appellant (in both
the appeals).
S. V. Gupte and A.S. Nambiar, for respondent Nos. 1-3 (in both
D
the appeals).
E
F
G
H
S. Govindaswaminathan, A. V. Rang am, N.S. SiPam and A.. Sttbshashini, for respondent No. 5 (in both the appeals).
B.R. Agrawala, for inter~ener (in C.A. 50/68).
. The Judgrnent of A.N. Ray, C.J., H.R. Khanna and A. Ala.jirl-·
swami, JJ. was delivered by Alagiriswami, J, The dissenting Opinion of
K.K. Mathew and P.N. Bhagwati JJ. was delivered by Bhagwati, J.
ALAGIRISW;..Ml, J. The appellants are the tenants of a property
bearing door Nos. 16 and 17 on the Poonama\lee High Road in the
city of Madras. They became tenants of this building in May 1929•
when the property was with one of the predecessors in title of the
present landlords, who are the respondents in these appeals. Though
the appellants became tenants in 1929 a registered lease <ieed- came
into existence only in 1935 tmder which the lease was to run upto
1-5-1969. The lessee was entitled to renewal on the same terms
and conditions for another period of fifteen years. The monthly
rent agreed upon was Rs. 225/- and a sum of Rs. 225/- was payable
<lS \ln annual contribution towards repairs and Rs. 220/- towards public
charges and taxes. In 1949 the parties mutually agreed that the tenants
were to pay a 25 per cent increase in rent and also certain other amounts.
The present landlords purchased the property in 1962 and soon after
filed an application under Section 4 of the Madras (now Tamil Nadu)
Buildings (Lease and Rent Control) Act, 1960 for fixation of fair r.ent.
Thereupon the tenants filed writ Petition No. 1124 of 1963 seeking
to restrain the landlords from proceeding with that petition. , The
learned Single Judse who heard the petition felt that in view of a long
series of decisions of Madras High Court under the various Rent
Control Acts in force in Madras that they applied also to contractual:
632
SUPREME COURT REPORTS
[1974] 2 s.c.a.
tenancies in the matter of payment ofre~lt a~ well as evictio.n, the matter
A
~hould be considered by a Full Bench m VIeW of the dec1sions of th·
-court in Rent Control cases from certain other States.
15
The Full Bench after an elabo~ate consideration came to the conclusion that the Act controls both contractual as well as statutory
tenancies that it is a complete Code, and enables both landlords and
tenants t~ seek the benefit of fixation of fair rent. whether a contracB
·tual tenancy prevails or it bas been dctcrmi!lcd. Thereafter the matter
. again came up before the same learned S111glc Judge who, applying
_ the provisions of the Act to the facts of the case held that the Act did j
·not apply to the premises in question. On appeal by the landlords
. a Division Bench of the High Court held that the premises were not
·
·exempted from the provisions c.,f the Act and the Rent Controller has
therefore jurisdiction to entertain and dispose of on merits the applicaC ·.
· tion for fixation of fair rent filed by the landlords. These two appeals
:are against the judgments of the Full Dcnch (reported in 1966
·z MLJ 68) and the Division Bench. respectively.
Defore we go further into a discussion of the questions that ari>c
it is necessary to look into certain relevant provisions of the Act.
D
·Clause (6) of section 2 of the Act dclines landlord thus :
"Landlord" indudcs the person who is receiving or is entitled
to receive the rent of a building, whetlter on his own account
-or on behalf of another or on behalf of himself and others or
as an agent, trustee,
e~ecutor, administrator, recd"cr. or
guardian or who would so receive the rent or be entitled to
receive the rent, if the building were let to a tenant:"
Clause 8, in so far as it is n:levant, defines t~nant os follows :
"tenant" means any person by whom or on whose account
Tent is payable for a building and includes tbe surviving spouse.
-or any son, or daushter, or the legal representative of a dec~a~d
tenant who had been Jiving with the tcn;!Ot in the bu1ldwg
as a member of the tenant's family up to the death oft he t_enant
and a person continuing in possession afler the termination of
the tenancy in his favour .••. "
Section 4 provides for an application for lixation of a fair _re nt~~
the. l~nan~ as well as the landlord. The fair rent for any resldent;~l
~u~llltng Js t~ ~e s_ix. per cent gross return per unnurn ?~. th:. t~n
<:05_t of ~he bu!h.lmg 1f ll is residential aml nin~ per cent 1t 11 1~ 0 of
rcsJdcnlla_l. The total cost has to be cakulatt:d t>y taking the cost
~onstru~tlon at Prescribed rates less depredation at pr~s.:~ibcd r~~~
a~ .well ~s the market value of the site on which the buJI~IItg st~~res
It IS lo _IOclude ~llowanc;e$ for such considerations as locahty, fea ·tal.
·of arclutecturaiJnterest, ;tcces~ibi!ity to market dispensary or bOSP1 ·h
nearnes~ I~. the railway station or educ41tion;;l institution and sue
-other ~tmen111es as may be prescribed.
G
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RAVAL k CO. V. K. C. RAMACHAI'<l>R,AN (Afagiriswami, J.)
6J3·
Section 5 pro~dcs that when the fair rent of a building has been
fixed no f~rtltc~ tncreasc shall be per:nissible except in cases where
some addttlon, tmprovement or alterahon has been carried out at the
landlord's ex~en_sc ~nd !lt the tenant's request. Similarly, if there is:
a decrease or dmllllUIIon 10 the accommodation or amenities provided
thetellllnt may claim a reduction in the fair rent.
'•
Section 6 provides for payment of additional sums in cases where;
the taxes and ccsscs payable to local authorities arc increased.
Section 7 prohibits the landlord fr~m claiming or receiving or
stipulating for the pny~1cnt of any premtum or anything in excess of
fair rent. It also provtdcs that when: a fair rent has not been fixed
the landlord shall not claim anything in exress of the agreed rent.
Section 10 deals with the eviction of tenants and lays down the
cOnditions under which an eviction could be asked for. One of those
cOnditions mentioned in'sub-scction (3) is when the Landlord requires
a resi<lential building for his own occupation or a non-rcsickntial
building for the purpose of his busin~ss. Clause. (d) of s_ub-scction
(3) provides that where the tenancy IS for a spectficd penod agreed
upon between the landlonl and the tenant, the landlord shall not be
entitled to apply under that sub-section before the expiry of such,
period.
Sections 12 and !4 provide for recovery of possession by landlord
for repairs or for reconstruction.
Section 17 provides that the landlord is not to interfere with the ,
amenities enjoyed by the tenant.
Section 30 exempts from the provisions of the Act (I) any building.
the construction of which was completed after the cof!~mencement of"
the Act and (2) any residential building in respect ofwbtch the monthly
rent payable exceeds two hundred and fifty rupees. We shall refer
to other details ns and when they become relevant.
1
1 ·. f the Act would show that the Act pro- .
. The above s tort ~na YSI$ 0 •
. J'k 1 to arise in the relationshiP ..
\'Ides for every contingency th.tt IS 1 e Y
of landlord and tcnunt.
·
•
Iiane~ is placed upon two decisions ·.
0~ behalf of the ~ppe\lantl rr Blta wollddin v. Dare Bltagwatprasatf.
or lh1s Court, Bltmya I un;a a?)
11~ 1\fanujewfra v. Purendr1 Prasad·
Prablruprasad (1963 3 SCR 31- a
d l'ng with e,·iction
In those
(1967 1 SCR 475). They arJ1 cases k~r~g
1 that the provisions of the
two cases it was held! broa Y ~~: i~ addition to and not in dcro·
Acts there under cons1dcrauon Yid ·f<
of Property Act. There nre
gatio_n of the provision~ of !he Tr~"tw~ decisions upon which reliance
ttrt;un general obscrvatl<lliStll those 1 to cases of fixation of rent also.
~$placed to cont.:nd th:•t.tbey ag~hl in thos.: cases that the Acts did
e argument was tlt at as ;t wa~ . : Jal ri hts which he did not possess .
not Providlf the landlord w1th nd~tttT 1" !here ther.: was a subsistinl: ·
under his contract or tcn~~ncy, smu ur'
.
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634
SUPREME COURT REPORTS
[1974] 2 ~ C.lt..
·contract of tenancy it
is not open to the landlord to take
adva11tage of the provisions of the Act to apply for fixation of a fair
rent at a figure higher than the contract rent. We are not called upon
in this case to consider whether those two cases were correctly decided.
But we must point out that the general observations therein should
be confined to the facts of those cases. Any general observatiO!l
cannot apply in interpreting the provisions of an Act unless this Court
has applied its mind to and analysed the provisions of that particular
Act. We may also point out.that in both thos.: cases the contract of
tena11cy was not subsisting.
In a senqe, therefore, the observations therein were not rea\ly necessary for deciding those cases. We
may also point out that in Rai Bri; Raj Krishna v. S.K. Shaw Bro.r.
(1951 SCR 145) dealing with the Bihar Buildings (Lease, Rent and
Eviction) Control Act. 1947 and interpreting section II of that Act
this Court observed as follows :
"Section II begins with
the words
'Notwithstanding
anything contained in any agreement or law to the contrary'.
and hence any attempt to import the provisions relating to the
1aw of transfer of property for the interpretation of the section
would seem to be out of place. Section II is a self-contained
section, and it is wholly unnecessary to go outside the Act for
determining whether a tenant is liable to be evicted or not, and
under what conditions he can be evicted. It clearly provides
that a tenant is not liable to be evicted except on certain conditions, and one of the conditions laid down for the eviction
of a month to month tenant is non-payment of rent."
Similarly in Slrri Hem Chand v. Slrrimati Shant De1·i (rLR 1955 Pu1~.
36) which dealt with the Delhi and Ajmer Merwara Rent Control
Act, section 13(i) of which provided that no decree or order for the
reeovery of possession of any rremises shall be passed by any court
in favour of the landlord against a tenant, notwithstanding anytbi ng
to the contrary contained in any other lnw or any contract. it was held
that the Act provided the procedure for obtaining the relief of cject1nent and that being so the provisions of s. 106 of the Transfer of
Property Act had no relevance. Both these cases were referred to in
the decision in Bhaiya Pm!ialal Blragwmufdin v. Dare Blragu·atprasad
Prablwprasad. Therefore, the following observations in Mmwjendrct
v. Purendu Prasad that
"Rent Acts are not ordinarily intet1ded to interfere with
contractual leases and are Acts for the protection of tenants
and are consequently restrictive and not enabling, conferring
no new rights of action but restricting the existing rights cit her
under the contract or under the general law."
should not be held to apply to all Rent Acts irrespective of the schem~
~f those Acts and their provisions. The decision of the Madras High
court in R. Kr·ishnanwrthy v. Parthasaratlry (AlR 1949 Mad. 780--
1949 1 MLJ 412) where it was held that section 7 _of the Madras
Buildin~s (Lease and Rent Control) Act of 1946 had tts own scheme
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635
of procedure ~nd therefore th~e was no question of an attempt to
re(:Oncil~ that Act with the Transfer of Property Act and that an
application for eviction could be m.ade to the Rent Controller even
before the contractual tenanc:y was terminattd by a notice to quit,
should not have been summarily dismissed on the grounds that it was
contrary to the decisions of this Court in
Abbasb!tat'~ Case (1964 5
SCR 157) and Mangilal's Case (1964 5 S.CR 239) and therefore was
not a correct law, without examining the provisions of that Act.
Be that as it may, we are now concerned with the question of fixation of a fair rent. The legislation regarding control of rents started
·during the Second World War. Jn Madras first two orders under
the Defence of India Rules were issued as the Madras House Rent
Control Orders, 1941 and the Madras Godown Rent Control Order,
1942. Jn 1945 these orders were re-issued with slight changes,
as the
Madras
House Rent Control Order, 1945 and the
Madras
Non-Residential
Buildings
Rent
Control
Order.
1945.
These
were
replaced by the
Madras Buildings (Lease
and Rent Control) Act, 1946, Under that
Act for the first
time both the tenant as well as the landlord were given the right
to apply for fixation of a fair rent. This Act was later replaced
by the M-adras Buildings· (Lease and Rent Control) Act, 1949, which
again had a similar provision.· But the important thing to note about
the fixation of a fair rent under both these Acts is that the fair rent
was related to the rents prevailing in April1940 and only a fixed percentage of increase from 8 1{3 to 5C per. cent depending upon the rent
payable was allowed. ~- The 1960 A:ot which replaced the 1949 Ad
adopted a completely new scheme of its own. It provided for the
fixation of a fair rent on the basis of the cost of construction and the
cost of land and after
allowing for
depreciation
provided for
a retur~ of 6
per cent in
the case of residential builings and
9 per cent
in
the case
of non-residential buidings. It also
provided' for
increase in
rent for
such factors
as locality,
nearness to
rajlway
'station, market,
hQspital, _ school etc.
Another significant fact is that all new buildings constructed after 1960
were exempt from the scope of the Act. Still another departure was
that the Act applies, in the case of residential buildings, only if the
monthly ·rent dOeil not exceed Rs. 250. The Act also provides for
fixation of fair rent under the new provisions even though fair rent
for the building might have been fixed under the earlier repealed enactments. All these show that the Madras Legislature had applied its
mind to1the problem of housi!)g and control of rents and provided a
scheme, of its own. It did not proceed on the basis that the legislation
regarding rent control was only for the benefit of the tenant$. It
wanted it to be fair both to the landlord as well as the tenant. Appart:ntly it realiSed that the pegging of the rents at the 1940 rates had
discourased building construction activity which ultimately is likely to
affect every body and therefore in order to encourage new construe·
tioDS·exemi!ted them altogether from the provisions of the Act.
It
dicl not pr~d on the basis that all tenants belo~ged to the weaker
sectio!J. of the oommunity an~ needed protection and that all landlords
636
SUPREME COURT REPORTS
[1974] 2 s.c.R.
belonged to the better ?ff clas~es. It confined the protection of th
. A.
. Act to the weaker scctton paymg rents below Rs. 250. It is 1 e
therefore, that ~he Madras Legislature
~elibcrately procecdc~ e~~
the basis that fa1r rent was to be fixed whtch was to be fair both 1
the landlords as well as to the tenants and that only the poorer clas o.
of tenants needed protection. The facile nssumption on the basis se~
which an argument was adva~ced before this Court that all Rent Ae~
arc intended for the prot.ectJOn of tenants and, therefore, this Act
also should be held to be Jlltcndc.d. only for the protection of tenants
breaks down when. ~he provJstons of the Act .arc examined
in detail.
The provJsJon that both the
tenant as well as the
landlord
can apply for fixation of a fair
rent would
become
meaningless if fixation of fair rent can only
be downwards
from the
contracted rent and the
contract rent was not to be
increased. Of course, it has happened
over the last few years
that rents have increased enormously
and that is
why it is
argued on behalf 9f the tenants that t~e co.ntract rents should not be
changed. If we could contemplate a Situation where rents and prices
are coming down this argument will break down. Jt is a realisation
of the fact that prices and rents ha\'C enormously increased and there·
fore if the rents are pegged at 1940 rates there would be no new construction and the community as a whole would suffer that led the
Madras Lcgisb.ture to exempt new buildings from the scope of the
Act. H realised apparently how dangerous was the feeling that only/
"fools build houses for wise men to live in''. At the time the !960
Act was passed the Madras Legislature had before it the precedent of
the Madras Cultivating Tenants (Payment of Fair Rent) Act, 1956.
That Act provides for fixation of fair rent. It also provtdes th:lt .the
contract rent, if lower, will be payable during the contract penod.
Even if the contract rent is hightr only the fair rent will be payable.
After the contract period is over only the fair rent is payable. ~e
Madras Legislature having this Act in mind still made only the fa1r
rent payable and not the contract rent if it happens to be lower. It
is clear, therefore, that the fair rent under the present Act is payable
during the conuact period as well as after the expiry of the contract
ptriod.
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It was argued that the basis of the decisions fn Rai Brij Raj
Krislw(s Case and Shri Hem Cham/'s Case wa~ the. non-obstont~
r
clause 10 those two Acts.
But it is well settled that the mtcnuon tllfl
.,.
a ~cgi~lation should take cff~ct notwithstanding any earlier Icg;s-
. latH?~ on. the subject can be both explicit and implicit and that IS .~:r
posmon Jfl the present case. We do not also f..:cl c:~llcd upon to j
to the deci~ions in G/os.wp v. Ash/q (1921 2 K 0 450), a New(/ ~
Cruyfurd Cuttuge Society (1922 1 KB 656) and Kerr v. IJryde (19,
AC 16), nor to the various statements regarding the law in M~S'
1~{,;1}
II.
work on the Rent Acts relied upon by Sri K. s. R::unamur.tl}Y on ~tile
of th.e nppella!lts. 11Jcy arc ba~d on the relevant prov1s1ons
. of
Act 10 fur.:e 10 England particularly section 3(1) of the )nc~e~se
Rent & ~ortgage lnh:rcst (Rc\trictions) Act, 1920 which read> •
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637
"Nothing in this Act shall be taken to authorise any increase of
rent except in respect of a period during which but for this Act
the landlord would be entitled to obtain possession.''
The provlSlons of the Act under consideration show that they
are to take effect notwithstanding any contract even during the Subsistence of the contract. We have already referred to the definition
of the terms 'landlord' and 'tenant' which applies both to subsisting
tenancies as well as tenancies which mi$nt have come to an end. We
may also refer to the provision in sect•on 7(2) which lays down that
where the fair rent of a building has not been fixed the landlord shall
not .claim anything in addition to the agreed rent, thus showing that.
the fair rent can be fixed even where there is an agreed rent. That
is why we have earlier pointed out that the various EngliSh decisions
which provide for. fixation of rent only where the contractual tenancy
has come to an end do not apply here. We may also refer to subsection (3) of.section 10 which deals with cases where a landlord requires
a residential or non-residential building for his own use. Clause
(d) of that sub-section provides that where the tenancy is for a term
the landlord cannot get possession before the expiry of the term, thus
showing that in other eases of eviction covered by section 10 evicti~n
is permissible even during the continuance of the contractual tenancy
if the conditions laid down in section 10 are satisfied.
The Madras High Court reviewed all the decisions of this Court
except the latest one in Manujendra v. Purendu Prosad. We have
already pointed out that the criticism made in that decision regarding
Krishnamurthy's Case was not justified. We are in agreement with
the view of the Full Bench of the Madras High Court that the various
decisions of this Court were based upon particular provisions of the
Acts which were under cons'deration, mainly the Bombay Act whichis vitally different from the Madras Act. A close analysis of the
Madras Act shows that it has a scheme of its own and . it
is intended to provide a complete c0de in respect of 'both
contractual
tenancies
as well
as what are popularly called
statutory tenancies.
As noticed earlier the definition of the
term 'landlord' as well as the term 'tenant' shows that the Act applies
to contractual tenancies as well as cases of "statutory tenants" and
their landlords. On some supposed general principles governing
all Rent ~cts it cannot be argued that such fixation can only be for
the benefit of the tenants when the Act clearly lays down that bot·h
landlords and· tenants can apply for fixation of fair rent. A close
reading of the Act shows that the 'fair rent is fiXed for the building
and it is payable by whoever is the tenant whether a contractual tenant
or statutory tenant.
What is fixed is not the fair rent payable by
the tenant or to the landlord who applies for fixation of fair rent but
fair rent for the· building, something like an incident of the tenure
regarding the building.-
We have the'n to .deal with Civil Appeal N<'. ol201 of 197(). The
learned Single Judge considering that as the total amount payable
annually in respect of these premises was Rs. 5032/·, which makes
the rent payable to exceed Rs. 400/- a month, the building was outside
15-M602Sup. CI 74
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638
SUPREME COURT REPORTS
[1974) 2 s.c.a.
the scope of the Act and therefore the petition for fixation of fair rent
does not lie. (This provision was removed by an Amending Act of
1964). The learned Judges ofthe Division Bench on the other hand
held that the agreement of the year 1949 between the landlord and
the tenant by which the rent was increased was one in variation of a
written contract and therefore evidence of it is barred under section
92 of the Evidence Act. Clearly any variation of rent reserved by a
registered lease deed must be made by another registered instrument.
We are not able to accept the argument of Sri K. S. Ramamurthy
on behalf of the tenants that the agreement of 1949 was one by the
landlord to give up his right to apply for fixation of fair rent in consideration of the additional rent agreed to be paid by the tenant and is,
therefore, not covered by section 92 of the Evidence Act.
The
correspondence between the parties makes it clear beyond doubt that
the agreement was to pay increased rent.
If this agreement is left
out of acc:>unt the rent payble is below Rs. 400/- a month, and,
therefore, the decision of the Division Bench is correct.
Before concluding we must refer to one other argument on behalf
of the appellants. Under section 30 of the Act, as originally enacted,
any residential building the rent of which exceeded Rs. 250/- per month
and any non-residential building whose rent exceeded Rs. 400/- a
month were outside the scope of the Act. In 1964 the Act was amended so as to provide thai all non-residential buildings would be within
the scope of the Act. This amendment was attacked on the ground
that it contravened the provisions of Art. 19(1) of the Constitution.
In view of our finding earlier that this case should be decided on the
basis of the monthly rent being below Rs. 400/· this argument does
not fall to be considered.
In the result the appeals are dismissed. The appellants will pay
the respondents' costs.
BHAGWATl J. We have had the advantage of reading the judgment
prepared by our brother Alagiriswami, J., and though we agree with
him in regard to the decision in Civil Appeal No. 1201 of 1970, we
we find it difficult to a!lsent to the view taken by him in Civil Appeal
No. 50 of 1968. The facts giving rise to the two appeals have been
stated clearly and succinctly in the judgment given by our learned
brother and we think it would be a futile exercise to reiterate them.
We may straight aw'J..y proceed to examine the question which arises
for· consideration in Civil Appeal No. 50 of 1968. The question is
whether a landlord can, during the subsistence of the CO!!tractual
tenancy, apply for fixation of fair rent under s. 4 of the Tamil Nadu
Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred
to as the Tamil Nadu Act 18 of 1960). The determination of this
question depends on the true interpretation of certain provisions of
the Tamil Nadu Act 18 of 1960 and we may, therefore, refer to those
provisions a.nd see what is their proper meanih~ and effect.
· The Ion~ title and the preamble of the Tamil Nadu Act 18 of 1960
show that it is enacted "to amend and consolidate the law relating
to the regulation of the letting of residential and non-re,idential
buildings and the control of rents of such buildiDJS and the prevenA
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MV.AL 4 CO. v. IC, C. RAMACHANl>MN (Bhagwati, /.)
639
t1on or unreasonable eviction· of tenants therefrom in the State of Tamil
Nadu". See. 2, cl. (6) gives an inclusive definition of 'landlord' and
according to this definition, 'landlord' includes "the person who is
receiving or is entitled to receive rent of a building, whether on his
own account or on behalf of another or on behalf of himself and others
or as an aient, trustee, executor, administrator, receiver or guardian
or who would so receive the rent or be entitled to receive the rent,
if the building were let to a tenant". Thus the owner of a building
whica becomes va~nt would be 'landlord' within the meaning of that
expression as defined in s. 2, cl. (6) and so also would be the landlord
during the subsistence of the contractual tenancy as also after the
termination of the contractual" tenancy where the tenant continues
to remain in possession of the building. 'Tenant' is defined in s. 2,
ct (8) to mean "any person by whom or on whose account rent is
payable for a building and includes the surviving spouse, or any son,
or daughter, or the legal representative of a deceased tenant who had
been living with the tenant in the building as a member of the tenant's
family up to the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour". This definition is wide enough to include not only a contractual tenant but
also a tenant remaining in possession of the building aftet the termination of the contractual tenancy. Section 3 enacts detailed provisions
regulating the letting of residential and non-residential buildings.
The broad scheme of this section is that when a building becomes
vacant, the landlord is required to give notice of the vacancy to the
authori~ officer and if the building is required "for the purposes
of the State or Central Government or of any )gcal authority or of
any public institution under the control of any such Government or
for the ocoupation of any officer of such Government", the authorised
officer may give necessary intimation in that behalf to the landlord
and on receipt of such intimation, the landlord would be bound to
deliver possession of the building to the authorised officer or to the
allottee named by the authorised officer, as the case may be, and the
Government would be deemed to ·be the tenant of the landlord on such
terms as may be agreed upon between the landlord and the Government, or in default of agreement, determined by the Contrdller. The
rent payable by the Government to the landlord would be the "fair
rent, if any, fixed for the building under the provisions of this Act
and if no fair rent has been so fixed, such reasonable rent as the
s
authorised officer may determine", but "the reasonable rent _fixed
by the authorised officer-shall be subject to such fair rent as mS¥
be fixed by the Controller". Section 4 provides for fixation of fair
rent of a building on the application of the tenant or the landlord.
Sub-s. (1) or the section is material and it says that "The Controller
shall, on application by the tenant or the landlord of a building and
after holding such inquiry as the Controller thinks fit, fix the fair rent
for such building in accordance with the principles set out in' subsection (2) or in sub-section (3) as the case may be, and such
other principles as may be prescribed". Sub-s. (2) lays down the
principles for fixation of fair rent of residential building and sub-s.
(3), for fixation of fair rent of non~residential building. The fiar
rent is to be such as would provide 6% gross return. per annum on
640
SUPREME COURT REPORTS ·
[1974] 2 s.c.Jl.
the total cost of the building, if it is residential and 9% gross return
A
per annum on the total cost of the building, if it is non-residential.
The total cost of the building is to be computed by taking the cost of
construction as calculated according to the prescribed rates less
depreciation also at the prescribed rates and adding to it the market
value of that portion of the site on which the building is constructed
and making allowances for such considerations as locality in which
the building is situated, featuxes of architectural interest, accessibility
B
to market, dispensary or hospital, nearness to the railway station or
educational institution and such other amenities as may be prescribed.
It may be pointed out that under the Madras Buildings (Lease and
Rent Control) Act, 1946 and the Madras Buildings (Lease and Rent
Control) Act, 1949, which preceded the .Tamil Nadu Act 18 of 1960,
the scb.eme of fixation of fair rent was different, in that the. fair rent
was related "to the prevailing rate of rent in the locality for the same
C
or similar accommodation in similar circumstances during the twelve
months perior to 1st April, 1940" and only a fixed percentage of increase varying from 8 I /3% to 50% was allowed on such rate ofr'ent,
depending upon whether it exceeded or did not exceed a
~rtain
limit. But the Legislature while enacting the Tamil Nadu Act 18
of 1960 made a departure from that scheme pcrsumably because it
felt that in view of the staggering and disproportionately heavy fall in
D
the purchasing power of the rupee over the last 30 years, it was most
unrealistic to peg the fair rent to the level of rents prevailing during
the period of 12 months prior to 1st April, 1940 and allow only an
ad !zoe percentage of increase, arid therefore, in s. 4, sub-ss. (2)
and (3), it adopted a different basis for fixation of fair rent which
would not unduly depreciate the yield permissible to the landlord
and at the same time, be not extortionate or exploitative of the tenant.
E
Now once the fair rent of a building is fixed under s. 4, sub-s. (1), no
further increase in such fair rent is permissible except in cases where
some addition, improvement or alteration has been carried otit at the
expense of the landlord and if the building is then in the occupation
of a tenant, at his request and similarly, if there is a decrease or diminution in the accommodation or amenities, the tenant may claim
reduction in such fair rent. Vide s. S.