# CHUNlLAL VITHALDAS v. MOHANLAL MOTILAL PATEL

- **Citation:** [1966] Supp. 1 S.C.R. 180
- **Court:** Supreme Court of India
- **Decided:** 1965-04-15
- **Case number:** Civil Appeal No. 427 of 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/chunllal-vithaldas-v-mohanlal-motilal-patel-3799
- **Pages:** 8

## Headnote

180
CHUNlLAL VITHALDAS
v.
MOHANLAL MOTILAL PATEL
April 15, 1965
. [K. N.-WANCIIOO, J. c. SHAH AND s. M. Snuu; JJ.]
Saurashtra RenJt Control Act 22 of 1951, s. 28-Section providing
for s2cor..d a.pp2aL agair~st judgment of first appelLate coUrt
under
the Act-Such· second appeal whether restricted by s. 100 of Code of
Civil Procedure.
The TespOD.dent ·V·las the ~\vner of a buildifig used as a cinematograph theatre. By a registered deed dated December· 23, 1960, the
appellant obtained a lease of the. theatre at · a monthly rental of
Rs. 1801/-. He then applied under s. 11 of the Saurashtra Rent Control
Act 22 of 1951.for an order fixing the standard rent of the. theatre. The
Court of First Instance fixed the standard rent of the whole. theatre
at Rs. 1030/12/-. Against th:s order the respondent filed an appeal
· under s. 28(1) of the Act to the District Court. That court fixed the
rental at Rs. 1150/-. Against the order of the District Court second
appeal under 3' 23 (2) of the Act was preferred by the appellant to
the High.Court It was dismissed under 0.41, r. 11(1); of the Code
of Civil Procedure. Aggrieved. the appellant came to this Court. It
vvas contended, inter alia7
that
(i) a second appeal under s. 28 of
the Act was not governed by s. 100 of the Code of Civil Procedure,
(ii) that in calculating the cost of the ·building the courts below
erred in taking into. consideration the whole price paid by the respondent for the land as well as the buildings standing on it at the
time of purchase, and that (iii) the District Court erred in taking
7% as a~ adc9uat~ retw·n iii r~spect of the prcper~y .i1?- question.
HELD: (i) .The second appeal under s. 28 of the Act may be entertained by the High Court within the limits provided by s. 100 of
the Code of Civil Procedure, and it is not open to the parties to deimand reappraisal of the· evidence by the High Court on the ground
that the District Court had erred in its view of the evidence. The
High Court was competent to dismiss the appeal under 0.41, r. 11(1)
of the Code. [184 G]
·
· •
The exPression 'second appeal' in· the Code meaiiS an appeal to
the High Court from the decision in a civil suit or proceeding of a
first appe!late ·court subordinate to the High Court. [183 F] . · .
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The disputes directed to be dealt with under the Act are essentially disputes of a civil nature and the courts invested with the
power under s. 27 of the Act have to adjudicate upon the disputed
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rights in the light of its special provisions. The procedure in the
trial of suits, -applications and proceedings under the Act is the procedure prescriocd by the Code of Civil Procedure except when it
is otherwise provided expressly or by clear implication. (183 G]
It is true that the proceedings under s. 11 do not result in a
decree and that certain orders under the Act are made appealable
H
under s. 28 though such orders are not appealable under the Code.
But the right of appeal on that account is not released from the
restrictions which zre attracted by its very nature. (184 A-B, F-G]
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O. VITIIALDAS V. MOTILAL PATEL (Shah, J.)
181
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Doshibai Khanna v. Sandhi Suleman Gulmamad, 6 Guj.L,R. 342
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and Nagardas Harichand v. Modi Mohanlal, S.A. No. 381 of 1960 dt.
21-9-1964, disapproved.
Union of India v. Mahindra Supply Co. [1962] 3 S.C.R. 497, distinguished.
(ii) The courts below did not commit any error in ta!>ing, into
consideration the whole price paid by the respondent for the land and
building purchased by him. A building when let out forms a composite unit with the land on which it stands and the rent received
from the building cannot be wholly attributed to the building. [185
F-G]
(iii) On a review of the reasons given it could not be said that
the District Court committed any error oJ' principle in coming to the
conclusion that 7% gross return on the cost of construction should be
regarded as an adequate return from the property in question.
[186 G]

## Text

180
CHUNlLAL VITHALDAS
v.
MOHANLAL MOTILAL PATEL
April 15, 1965
. [K. N.-WANCIIOO, J. c. SHAH AND s. M. Snuu; JJ.]
Saurashtra RenJt Control Act 22 of 1951, s. 28-Section providing
for s2cor..d a.pp2aL agair~st judgment of first appelLate coUrt
under
the Act-Such· second appeal whether restricted by s. 100 of Code of
Civil Procedure.
The TespOD.dent ·V·las the ~\vner of a buildifig used as a cinematograph theatre. By a registered deed dated December· 23, 1960, the
appellant obtained a lease of the. theatre at · a monthly rental of
Rs. 1801/-. He then applied under s. 11 of the Saurashtra Rent Control
Act 22 of 1951.for an order fixing the standard rent of the. theatre. The
Court of First Instance fixed the standard rent of the whole. theatre
at Rs. 1030/12/-. Against th:s order the respondent filed an appeal
· under s. 28(1) of the Act to the District Court. That court fixed the
rental at Rs. 1150/-. Against the order of the District Court second
appeal under 3' 23 (2) of the Act was preferred by the appellant to
the High.Court It was dismissed under 0.41, r. 11(1); of the Code
of Civil Procedure. Aggrieved. the appellant came to this Court. It
vvas contended, inter alia7
that
(i) a second appeal under s. 28 of
the Act was not governed by s. 100 of the Code of Civil Procedure,
(ii) that in calculating the cost of the ·building the courts below
erred in taking into. consideration the whole price paid by the respondent for the land as well as the buildings standing on it at the
time of purchase, and that (iii) the District Court erred in taking
7% as a~ adc9uat~ retw·n iii r~spect of the prcper~y .i1?- question.
HELD: (i) .The second appeal under s. 28 of the Act may be entertained by the High Court within the limits provided by s. 100 of
the Code of Civil Procedure, and it is not open to the parties to deimand reappraisal of the· evidence by the High Court on the ground
that the District Court had erred in its view of the evidence. The
High Court was competent to dismiss the appeal under 0.41, r. 11(1)
of the Code. [184 G]
·
· •
The exPression 'second appeal' in· the Code meaiiS an appeal to
the High Court from the decision in a civil suit or proceeding of a
first appe!late ·court subordinate to the High Court. [183 F] . · .
A
B
c
D
E
F
The disputes directed to be dealt with under the Act are essentially disputes of a civil nature and the courts invested with the
power under s. 27 of the Act have to adjudicate upon the disputed
G
rights in the light of its special provisions. The procedure in the
trial of suits, -applications and proceedings under the Act is the procedure prescriocd by the Code of Civil Procedure except when it
is otherwise provided expressly or by clear implication. (183 G]
It is true that the proceedings under s. 11 do not result in a
decree and that certain orders under the Act are made appealable
H
under s. 28 though such orders are not appealable under the Code.
But the right of appeal on that account is not released from the
restrictions which zre attracted by its very nature. (184 A-B, F-G]
I •
i
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O. VITIIALDAS V. MOTILAL PATEL (Shah, J.)
181
A
Doshibai Khanna v. Sandhi Suleman Gulmamad, 6 Guj.L,R. 342
B
c
D
E
F
G
B
and Nagardas Harichand v. Modi Mohanlal, S.A. No. 381 of 1960 dt.
21-9-1964, disapproved.
Union of India v. Mahindra Supply Co. [1962] 3 S.C.R. 497, distinguished.
(ii) The courts below did not commit any error in ta!>ing, into
consideration the whole price paid by the respondent for the land and
building purchased by him. A building when let out forms a composite unit with the land on which it stands and the rent received
from the building cannot be wholly attributed to the building. [185
F-G]
(iii) On a review of the reasons given it could not be said that
the District Court committed any error oJ' principle in coming to the
conclusion that 7% gross return on the cost of construction should be
regarded as an adequate return from the property in question.
[186 G]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 427 of
1964.
Appeal by special leave from the judgment and order dated
August 28, 1959 of the Bombay High Court in Civil Application
Na. 1638 of 1959.
Bishan Narain, J. P. Mehta, S. N. Prasad, J. B. Dadachanji,
0. C. Mathur and Ravinder Narain, for the appellant.
R. M. Hazarnavis, K. L. Hathi, Atiqur Rehman, for the respondent.
The Judgment of the Court was delivered by
Shah, J. Respondent in this appeal is the owner of a build·
in:; used as a cinematograph theatre. By a registered deed dated
December 23, 1960, the appellant obtained a lease of the theatre
at a monthly rental of Rs. 1,801/-. The appellant applied under
s. 11 of the Saurashtra Rent Control Act 22 of 1951 hereinafter
called 'the Act'-for an order fixing the standard rent of the theatre. He submitted that the rent stipulated to be paid under the
lease was "excessive, exorbitant and improper" and that the
standard rent of the theatre, having regard to its situation and
size and the amenities provided therein, could not exceed Rs. 350 /-
per mensem. The respondent by his written-statement submitted
that the rent stipulated under the lease was reasonable.
The Court of First Instance fixed the standard rent of the
whole theatre at Rs. l,030 /J 2 /- being the one-twelfth of the gross
return of 6 % on the cost of construction of the theatre and the
cost of furniture installed therein. But the learned Judge held that
the respondent had not delivered to the appellant possession of the
basement and of a part of the building which was intended to be
used for a restaurant, and on that account reduced the standard
rent payable by the appellant by Rs. 220 /-
182
SUPREME COURT REPORTS
~
[1966] SUPP. s.c.11.
Against the order of the Civil Judge. the respondent preferred A
an appeal under s. 28(1) of the Act to the District Court, Gohilwad, and the appellant preferred
cross-0bjectio11S to the order
appealed from.
The District Court agreed with the Trial Court
that the cost of construction of the building and cost of the furni·
ture was Rs. 2,06,150/-, and held that standard rent should be
fixed on the basis of a return of 7 ~~ of the cost of the building and
B
furniture, and on that footing computed the standard rent at
Rs. 1,200/- per mensem. The District Court further held that
possession of the space reserved for a restaurant was delivered to
the appellant and since about June 1952 it was in the appellant's
occupation.
It was however common ground between the parties
that possession of the cellar was not delivered by the respondent C
to the appellant.
It was the case of the respondent that the celler
was not included in the premises let out. It was the case of the
appellant that it was so included. On the view that the cellar was
not included in the tenancy, the District Court directed that stan·
dard rent of the premises in the occupation of the appellant be
fixed at Rs. 1,150/· per me11Sem.
Against the order of the District Court, second appeal No. 552
D
of 1959 preferred by the appellant to the High Court of Judicature
at Bombay was by order dated March 30, 1959 dismissed under
0. 41, r. 11(!) of the Code of Civil Procedure. The respondent also
preferred an appeal to the High Court.
For reasons which we are
unable to ascertain this appeal was not made ready for hearing
before the Bombay High Court. and on reorganisation of the State
of Bombay that appeal was transforrcd to the High Court of GujaE
rat and we were informed at the Bar that the appeal is now pending before that High Court.
Against the order of the Bombay High Court dismissing his
appeal, the appellant has appealed to this Court.
It is somewhat unfortunate that the appeal filed by the res·
F
pondent has been admitted to the file and is to be heard on the
merits, while the appeal filed by the appellant was summarily dismissed.
Counsel for the appellant submitted that we should set
aside the order of the High Court of Bombay, since a second appeal under s. 28 of the Act lay to the High Court on a question of
fact as well as of law, and as there w<is "voluminous evidence" on
the record which had to be considered in determining the appro0
priate standard rent, the High Court of Bombay committed a
grave error in summarily dismissing the appeal. We arc unable to
agree with that pica.
Section 28(1) of the Act provides:
"Notwithstanding anything contained in any law, but sub· n
ject to the provisions of the Provincial Small Cause
Court Act, as adapted and applied to the State of
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C. VITHALDAS v. MOTILAL PATEL (Shah, J.)
183
Saurashtra, an appeal shall lie from a decree or order
made by a Civil Judge or a Munsiff exercising jurisdiction under section 27 to the District Court and a second
appeal to the High Court."
ll was said that the expression "second appeal" in s. 28(1) of the
Act means an appeal from an appellate decree, but restrictions
imposed by s. 100 of the Code of Civil Procedure upon the power
of the High Court are not attracted to a "second appeal" under
s 28 of the Act. Ordinarily, says counsel for the appellant, an
appellate Court is competent to examine the correctness of the
decision appealed from on the ground that the decision is erroneous
in point of Jaw or fact, and in the absence of any express provision
to the contrary, restrictions imposed on the power of the High
Court under one statute cannot be imported merely because of
similarity of nomenclature, when exercising jurisdiction under
another statute unless those restrictions are imposed by express
enactment or necessary intendment. It was said that the State of
Saurashtra has not imposed restrictions upon the power of the
High Court in dealing with a second appeal under s. 28 of the Act,
and the High Court was competent and was indeed bound to entertain all objections to the correctness of the judgment appealed
from.
Jt is true that in the body of s. 100 of the Code of Civil Procedure the Legislature has not used the expression "second appeal". That expression however occurs in the marginal note of
s.
JOO and in the text of ss. IOI, 102 & 103. Section IOI is enacted to make explicit what is clearly implied in s. 100 Code o!
Civil Procedure: s. 102 prohibits second appeals from decrees in
certain classes of suits; and s. 103 confers power upon the High
Court to determine questions of fact in certain conditions. It is
clear therefore that the expression "second appeal" in the Code
means an appeal to a High Court from the decision in a civil suit
or proceeding of a first appellate Court subordinate to the High
Court.
Section 27 of the Act does not confer any special jurisdiction
unon the courts described therein, for the Act creates no new
r;ghts: it only seeks to regulate the rights and obligations of landlords and tenants in respect of certain classes of tenancies in urban
areas. The disputes directed to be dealt with under the Act are
essentially disputes of a civil nature: and the courts invested with
power under s. 27 of the Act have to adjudicate upon the disputed
ri~hts in the light of the special provisions and not by the Transfer
of Property Act and the Contract Act. The Act has again merely
declared that a second appeal will lie to the High Court against
decrees or orders passed by the courts exercising jurisdiction
under s. 27, but thereby the essential character of a second appeal
under the Code is not altered. The procedure in the trial of suit,
J,rR5SCI-14
184
SUl'RF.llE OOURT REPORTS
[1966) SUPP. 8.C.R.
applications and proceedings under the Act is the procedure prescribed by the Code of Civil Procedure. except where it is other·
wise-provided expressly or by clear implication. It is true that
certain orders contemplated to be made under the Act determining
rights and obligations of the parties arc made appealable under
s. 28. though such orders are not appealable under the Code, but
that is not a ground for holding that the Legislature intended to
confer upon litigants a right of second appeal unhampered by the
restrictions imposed by s. I 00 of the Code.
In Doshibai Khanna v. Sandhi S11/eman Gulmamad(') a smg1e
Judge of the Gujarat High Court, following an unreported judgment of that Court in Nagardas Haricltand v. Modi Mohan/a/(')
observed that
in a second appeal under the Act correctness of
the decision of the District Court on questions of fact was liable
to be canvassed in the High Court. For reasons already mentioned, we are unable to agree with the view that in a second appeal
under s. 28 of the Act, questions which may not be raised in an
appeal under s. 100 of the Code of Civil Procedure may be raised.
It is true that in Union of India v. Moltindra Supply Company(') this Court held that by providing in s. 39(2) of the Arbitration Act. 1940, that "no second appeal shall lie from an order
passed in appeal under this section", it was intended to prohibit
an appeal under the Letters Patent.
But the Court reached that
conclusion because of the scheme of the Arbitration Act.
The
Legislature having prohibited a second appeal under the Arbitration Act, obviously the limits of the power which the Court could
exercise if such an appeal were entertained could not fall to be
determined in that case.
Section 11 of the Act does not contemplate that the decision
of the Court determining standard rent shall be incorporated into
a decree of the Court. and by s. 28 of the Act a second appeal lies
to the High Court against an order determining standard rent. The
orders which determine on the merits, rights and obligations of
the parties arising out of the relation of landlord and tenant, may
have serious consequences, and the Legislature has conferred a
right of appeal to the party aggrieved by those orders.
But the
right of appeal on that account is not released from the restrictions
which are attracted by its very nature.
We are of the view that a
second appeal under s. 28 of the Act may be entertained by the
High Court within the limit~ prescribed by s. I 00 of the Code of
Civil Procedure, and it is not open to the parties to demand reappraisal of the evidence by the High Court on the ground that the
District Court has erred in its view of the evidence.
The High
Court of Bombay was apparently of the view that no question of
law arose in the appeal, and it was competent to dismiss the appeal
under 0. 41, r. 11()) of the Code.
---·---- --------·---- - -·-· ------ ··-
(') 6 Ouj. L.R. 3-12.
(l) S.A. No. 38J of 1960 det:ided on Niptr. 21, 1954.
!'I [1962] 3 S.C.R. 397.
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C, VITHALDAS V. MOTILAL PATEL (Shah, J.)
185
It was then urged that the judgment of the Distt. Court proceeded upon mis-conception of the evidence on the record, and on
that account a second appeal would lie within the limits prescribed
by s. 100 of the Code of Civil Procedure. It was said that in
computing the cost of construction, the appellate Court had taken
into consideration several items of expenditure which may not
properly enter into the cost of construction.
According to the
books of account of the respondent the total cost incurred by the
respondent was Rs. 2,11,790/5/-. This amount included the cost
of transport, miscellaneous items, pan Bidi, tips, distribution of
sweets, and Pu;a totalling Rs. 8,855/15/3. The trial Judge was
of the view that certain miscellaneous items were not allowable
in the computation of the total cost of the building and he held
that an amount of Rs. 5,640/5/- should be disallowed and with
that view the appellate Court agreed. We do not think that the
Courts below committed any error of law or misconceived the evidence in holding that only Rs. 5,640151- be disallowed out of the
total cost of construction on the ground that they could not reasonably enter the computation.
lt was then said that the Courts below committed an error in
taking into consideration the whole price paid by the respondent
for the land and building purchased by him.
The appellant had
purchased for Rs. 30,701/- an area of land together with houses
thereon and had demolished the houses and had erected the theatre in respect of which this dispute has arisen. The houses had,
it appears, been Jet out and rent was being received by the owner.
It was urged by the appellant that the rent should be capitalised
and the value of the land determined by deducting from the price
paid by the respondent such capitalised value of the structure. But
that would be a wholly faulty method of valuation. Rent received
from a structure, is determined not merely by the nature of the
structure and the accommodation provided thereby, but also by
the situation and the amenities provided by the land on which the
structure stands. A building when let out forms a composite unit
with the land on which it stands, and the rent received from the
building cannot be wholly attributed to the building. The respondent purchased the property with a view to pull down the houses
thereon and to put up a building adapted for use as a cinematograph theatre. It is true that some rent was recovered from the
tenants before the structures were pulled down. But since the responden~ ~urchased the land and the buildings for putting up a
new bmldmg thereon, he may reasonably be regarded as having
paid for the property purchased the value of the land and of the
debris of the superstructures. The debris which by sale fetched
Rs. 9, 171 / 3 /- has been given credit for in arriving at the total cost
of the theatre.
It is also worthy of note that one Masataram a consulting
architect, estimated the cost of the structure to be Rs.' 2,35,777II12
L/S5SOI-14(a.)
186
Sl11'REME COl'RT H.El'OHTtii 96!i j ol'l'P. 8,1 '. "·
at the rates prevailing in 1950.
He stated that the prices prevailing in 1954 when he gave evidence were a little lower than the
prices prevailing in 1950, "though in respect of certain items the
prices may have gone up". The Trial Court and the District Court
regarded his evidence as reliable, but having regard to the fact
that in constructing the theatre the respondent hacl used >omc
second-hand material. the Courts below held that the cost nf the
structure was truly shown by the accounts of the respondent. and
that conclusion must be accepted.
It is then
urged
that ordinarily
in
towns like Bombay,
Ahmedabad and Poona standard rent is determined as eq~1i,·alent
to one-twelfth of the gross return on the sum invested by the landA
B
lord at the rate of 8.66°~ on the c:1st of the building. and at the
O
rate of 6?{, on the value of the land. and since the
~ro" rate
includes municipal taxes which vary between 25 ?:. to 33.33 •;;, of
the letting value standard rent is considered as reasonable if it
fetches to the landlord 4J % per annum on the value of the land
and 5 j ·::. on the cost of building.
It is true that in the city of
Dhavnagar no municipal taxes and rates were. at the ma:rrial
time. charged by the \fonicipality. and therefore some adjustment
D
would have to be made in ascertaining the percentage of gross
return on the investment in determining
standard
rent.
It is
common ground that charges for water supply are made by the
Municipality.
There is however no
evidence on the recorcl to
show as to what the rates for water supplied by the Municip;.!ity
were. It was faintly suggested by counsel for the appellant that the
water charges arc payable by the tenant. but there is nothi!1g to
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support that contention.
The appellate Court has. on a consideration of the evidence. come to the conclusion that a 'I av~rall
rate of ?·::. on the investment for the building and land m::y be
regarded in the town of Bhavnagar as an adequate return to the
landlord.
What rate of return in respect of •he I:rndect '.'f'lperty
may be regarded as reasonable in determining the standard rent
under s. 11 of the Act dep~nds upon certain v"riahk factr.rs. Normal expected yield from immovable property in the locality. return from alternative investments. municipal and other chergcs.
the use to which the property is to be r"t. its cnndit;.,!1 repairs
it needs to keep it in tenantable condition and a host of other
related circumstances must enter into the determination.
On a
review of the reasons given. it cannot be said that the District
Court committed any error of principle in coming to the C'Jnclusion that 7 "{, gross return on the cost of construction should l:>c
regarded as an adequate return from the property in the town of
Bhavnagar which is utilised for a cinematograph theatre.
Two othc1 questions remain to be considered. Eventh<•u?h it
was not pleaded in the petition filed by the appellant that P\'Sscs-
.sion of a part of the building let out was not delivered: the appellant was permitted, without objection. to raise that questicn at
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<•. VITllALDAS V. )!O'f!LAJ, PATEL (Shah, ./.)
lk7
the trial. It was the case of the appellant that possession of the
cellar and the space reserved for a restaurant were not delivered
to him, and on that account appropriate deduction should be made
from the standard rent. The respondent conceded that possession of the cellar was not given to the appellant, but his case was
that he did not deliver the cellar because it was not included in
the premises demised in favour of the appellant. Unfortunately
the lease has not been printed in the paper book and the parties
have not chosen to produce for our perusal a copy of the lease.
We have not thought it necessary to hold up the proceeding in this
Court in view of the ultimate order we propose to make
in this appeal. The trial Court was of the view that having
regard to the carpet area of the cellar Rs. 100 /- per mensem
should be deducted from the standard rent of the entire building.
The District Court without giving any reasons observed that fair
standard rent for the cellar would be Rs. 50 /- per mensem. In
our view the Court was not right in reducing the proportionate
rent of the cellar from Rs. 100 /- to Rs. 50 /-.
The question whether the cellar was let out to the appellant under the terms of the
lease wili be determined by the High Court of Gujarat before
which the appeal filed by the respondent is pending.
We have
for the purpose of this an~eal held, agreeing with the Distt. Court.
that the standard rent of the entire building is Rs. 1,200 /- per
mensem. If the cellar is not included in the tenancy, Rs. 100 /-
will have to be deducted and the standard rent will be Rs. 1,100/-
per mensem.
The other matter in dispute relates to the space intended to
be used for a restaurant. The respondent contended that possession of that room was delivered to the appellant: the appellant
denied that it was so delivered. It is common ground that it was
part of the premises leased. Enquiry into the question whether by
reason of defauit on the part of the landlord in delivering possession of a part of the premises let out under the lease any loss was
occasioned to the tenant and to what relief the tenant is entitled
on that account is foreign to the determination of standard rent.
We therefore decline to enter into the question whether possession
of the space intended for use as restaurant was delivered by the
respondent to the appellant.
The decision of the Courts below
on that part of the case is vacated.
We accordingly modify the order passed by the District Court
and declare that the standard rent of the whole building including
the space for the r~staurant and the cellar is Rs. 1,200 /- per mensem.
We further declare that if the cellar is not included in the
tenancy, standard rent of the premises let out will be Rs. 1,100/-
per mensem. The appellant bas substantially failed in this
appeal. He-will pay 7 /8th of cost of the respondent in this appeal.
Appeal dismissed and decree modified.