IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 30.06.2006 CORAM: THE HONOURABLE MR.JUSTICE P.K.MISRA and THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN W.P.Nos.16576 of 1991, 2550, 4421, 4422, of 1999, 7134 and 20910 of 2000, 14525 of 2001, 43116 of 2002, 3399 of 2004 and 7696 of 2005 and C.R.P.No.1662 of 2005 1. T.V. Angappan 2. T.V. Subramanian ... Petitioners in W.P.No.16576 of 1991 and W.P.No.4421, 4422 of 1999 1. Shabbir Hussain 2. Sajjed Hussain 3. Abbasbhoy 4. HajiraBai 5. Jami Bai 6. Bilkis Bai Co-oweners having Common name as A. Nazarally & Sons Estate, Chennai- 600 001 .... Petitioners in W.P.NO.2550 of 1999 R. Ramalingam ... Petitioner in W.P.No.7134 of 2000 A.Y. Nithyanandha ... Petitioner in W.P.No.20910 of 2000 C.S. Mani Heriditary Trustee of a Private Family Temple Arulmigu Arasadi Karpaga Vinayagar Temple No.138 Big Street, Triplicane, Madras- 600 005. ... Petitioner in W.P.No.14525 of 2001 A.C. Mohan ... Petitioner in W.P.No.43116 of 2002 1. Badruddin Mohamedally 2. Mohammed Badruddin 3. Khujam Badruddin 4. Hyder Badruddin https://hcservices.ecourts.gov.in/hcservices/ 5. Quaresh Badruddin 6. Mariam Badruddin 7. Munira . S 1,6 and 7 rep by P.O.A. Hyder Badruddin 4th petitioner 8. Yasmin S. Lehri 9. Gulnar Fakruddin 10. Fatema Tayebally 9 & 10 rep by P.O.A Yasmin S. Lehri 8th Petitioner all are residing at No.158 Lingi Chetty Street, Chennai- 600 001. ... Petitioners in W.P.No.3399 of 2004 Abdul Razak Arif rep by Power of Attorney Mrs. R. Ramadevi M-3, Agathiyar Nagar, Villivakkam, Chennai-49 ... Petitioner in W.P.No.7696 of 2005 Vs 1. The State of Tamilnadu rep. by the Secretary to Government Education Department Fort St. George Madras-600 009. 2. The Chief Engineer (Buildings) Public Works Department Chepauk, Madras-600 005. 3. The Revenue Divisional Officer and Accommodation Controller State Bank Road Coimbatore-641 018. 4. The Divisional Engineer (Buildings) Public Works Department Big Bazaar Street Coimbatore-641 001. 5. The Director N.C.C.Directorate (Tamilnadu and Pondicherry) Fort St.George, Madras-600 009. https://hcservices.ecourts.gov.in/hcservices/ 6. The Officer Commending 4(TN) Batalian N.C.C. No.3, Race Course Road Coimbatore-641 018. .. Respondents in W.P.16576 of 1991 and W.P.No.4421 and 4422 of 1999 1. Government of Tamilnadu rep by Secretary, Law Department, Fort St. George, Chennai-9. 2. The X Rent Controller, Small Causes Court Madras High Court Compound, Chennai-104. 3. K.J. Bastian & Co., 23 Vanniar Street, Chennai-1. ... Respondents in W.P.No.2550 of 1999 1. The State of Tamilnadu represented by its Chief Secretary, Fort St. George, Chennai-9. 2. The XIIth Judge, Court of Small Causes, Chennai- 600 001. 3. Dr. N. Krishnamurthy Rao No.108, Bells Road, Triplicane, Chennai- 600 005. ... Respondents in W.P.No.7134 of 2000 1. The Government of Tamilnadu rep by Secretary to Government, Law Department, Fort St. George, Chennai-9. 2. National Textiles Corporation (TN & P) rep by its Branch Manager, N.T.C. show room, Adyar, Chennai-20 ... Respondents in W.P.No.20910 of 2000 1.State of Tamil Nadu rep. by its Secretary to Government https://hcservices.ecourts.gov.in/hcservices/ Law Department, Fort St. George, Madras -9. 2.Mrs. S.Saroja 3.Mr.S.Chandrasekaran 4.Mrs. S.Chandralekha ..Respondents in WP No.14525 of 2001 (Respondents 2 to 4 residing at 22, Big St. Triplicane Madras 5) 1.The State of Tamil Nadu rep. by The Secretary, Law Department, Fort St. George, Chenai 600 009. ..Respondent in WP No.43116/2002 1.Governemnt of Tamil Nadu, rep.by Secretary, Law Department, Fort St. George, Chennai-9 2.VIII Judge, Small Causes Court Chennai-104 Appellate Authority under Act, 18 of 1960, High Court Compound, Chennai 600 104 3.M/s. Unsiversal Pipe Distributors, No.51, Sembudoss Street, Chennai -1. ..Respondents in WP 3399 of 2004 1.The Secretary to Government Housing and Urban Development Department, Secretariat, Chennai 600 009. 2.The Secretary to Government Law Department, Secretariat, Chennai 600 009. ..Respondents in WP 7696 of 2005. ----- PRAYER: W.P.No.16576 of 1991 is filed under Article 226 of the Constitution of India for the issue of a writ of mandamus directing respondents-2 to 4 to implement G.O.Ms.No.753, Public Works Department dated 7.4.1984 in respect of the petitioner’s land and building https://hcservices.ecourts.gov.in/hcservices/ bearing Door No.3, Race Course Road, Coimbatore, and comprised in Old T.S.No.636/2-A New T.S.No.1/1426 and 1/1426 Pt.BCE of Coimbatore Town and continue to do the same once in three years in future and consequently direct respondents-5 and 6 to pay the reasonable rent to be fixed by respondents-2 to 4 to the petitioners. W.P.No.2550 of 1998 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring the whole of sub section (1) of Section 5 along with I proviso thereto, of the Tamil Nadu Buildings (Lease and Rent Control) Act (Act 18 of 1960) as amended by Act 23 of 1973 and 1 of 1980 as ultra vires the Constitution of India and to strike down the same insofar as the petitioners are concerned. W.P.No.4421 of 1999 is filed under Article 226 of the Constitution of India for the issue of a writ of Certiorarified Mandamus calling for the records relating to C.No.(RT) 2043 PWD dated 15.10.1987 and to quash the same and direct the respondents to fix fair rent to the building once in three years as per G.O.Ms.No.753/PWD dated 7.4.1984. W.P.No.4422 of 1999 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring Section 5(1) of the Tamilnadu Buildings (Lease and Rent Control) Act, 1960 as invalid in law and unconstitutional. W.P.No.7134 of 2000 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring Section 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act 1960, as amended by Act 23 of 1973 and Act 1 of 1980 as null and void and consequentially to strike down the said provision as ultra vires the Constitution of India so far as the petitioner is concerned. W.P.No.20910 of 2000 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring sub section (1) of Section 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act as ultra vires the Constitution of India and to strike down the same as unconstitutional and further set aside the order dated 28.4.2000 passed by the XV Judge, Small Causes Court, Madras in R.C.O.P.No.1871 of 1996 and remand the said case for fresh disposal in accordance with Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act of 1960. W.P.No.14525 of 2001 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring sub section (1) of Section 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, as amended by Tamil Nadu Act 23/73 and 1/80 as invalid and void and of no legal effect as being arbitrary and in contravention of Article 14 of the Constitution of India insofar as the petitioner is concerned. https://hcservices.ecourts.gov.in/hcservices/ W.P.No.43116 of 2002 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring Sections 4 and 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 as amended by Act 23 of 1973 as unconstitutional and violative of Article 300-A of the Constitution of India and discriminatory. W.P.No.3399 of 2004 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration declaring sub section (1) of Section 5 along with 1 proviso thereto, of the Tamil Nadu Buildings (Lease and Rent Control) Act, (Act 18 of 1960) as amended by Act 23 of 1973 and 1 of 1980 as ultra vires the Constitution of India and to strike down the same insofar as the petitioners are concerned. W.P.No.7696 of 2005 is filed under Article 226 of the Constitution of India for the issue of a writ of Declaration, declaring the provisions of Sections 4 and 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, as unconstitutional, unjust, unreasonable and violative of constitutional rights to hold the property. C.R.P.No.1662 of 2005 is filed under Section 25 of the Tamil Nadu Buildings (Lease and Rent Control), Act as amended, against the decree and judgment dated 6.1.2005 made in R.C.A.No.1611 of 2003 on the file of the Rent Control Appellate Authority (VIII Judge, Court of Small Causes, Chennai), confirming the order dated 12.12.2003 made in R.C.O.P.No.161 of 2001 on the file of the Rent Controller (XVI Judge, Court of Small Causes, Chennai). ----- For petitioner in W.P.No.16576 of 1991 and 4421 & 4422 of 1999 : Mr.K.V.Rajan For petitioner in W.P.Nos.2550 of 1999 and 3399 of 2004 : Mr.Sandeep Shah for M/s.Shah & Shah For petitioner in W.P.No.7134 of 2000: : Mr.K.Bijai Sunder For petitioner in W.P.No.20910 of 2000 : Mr.S.J.Jagadev For petitioner in W.P.No.14525 of 2001 : Mr.S.Rajendra Kumar https://hcservices.ecourts.gov.in/hcservices/ For petitioner in W.P.No.43116 of 2002 : Mr.R.Sundararajan For petitioner in C.R.P.NPD No.1662 of 2005 and W.P.No.7696 of 2005 : Mrs.G.Devi For 1st respondent in W.P.No.2550 of 1999, 7134 & 20910 of 2000 and 14525 of 2001/respondents in W.P.Nos.16576 of 1991 and WP No. 3399 of 2004 4421 & 4422 of 1999 and 43116 of 2002, 7696 of 2005 : Mr.S.Gomathinayagam Special Government Pleader For 3rd respondent in W.P.No.2550 of 1999 : Mr.Sanjay Mohan Senior Advocate for M/s.S.Ramasubramaniam & Associates For 3rd Respondent in WP No. 3399 : Mr. S. Vijayaraghavan of 2000 For 3rd respondent in W.P.No.7134 of 2000 : Mr.T.S.Ramaswamy For respondents-2 to 4 in W.P.No. 14525 of 2001 : Mr.G.Jeremiah For respodents 2 in W.P.No.20910 of 2000 : Mr.K.V. Sundararajan ORDER The Tamil Nadu Buildings (Lease and Rent Control Act), 1960, as amended by Act 23 of 1973 and by Act 1 of 1980, as its name suggests, is a legislation to regulate letting of residential and non- residential buildings. This includes regularising the rents by fixing a fair rent and prevention of unreasonable eviction of tenants therefrom. The present Act has its forerunner in the Madras House Rent Control Order, 1941, and the Madras Godown Rent Control Order, 1942, issued under the Defence of India Rules during the second world war. They were reissued subsequently with slight changes in 1945 to be replaced by the Madras Buildings (Lease and Rent Control Act), 1946. https://hcservices.ecourts.gov.in/hcservices/ 2. While enacting the 1946 Act, the statement of the objects and reasons stated therein that the conditions which compelled the passing of the Madras House Rent Control Order, 1941, and the Madras Godown Rent Control Order, 1942, had not ceased and anyway improved and "is not likely to improve for sometime to come". Hence, it was necessary to continue control of rent and eviction till such time as the situation improved. It also stated that provision had been made for increase of rents above the rates prevailing before 1st April 1940 with a view to prevent hardship to landlords. 3. This Act was subsequently replaced by the Madras Buildings (Lease and Rent Control) Act, 1949, containing similar provisions, to be replaced ultimately by the 1960 Act. The significant changes introduced in all these enactments related to the concept on the fixation of fair rent. Fixation of fair rent under the 1942 and 1949 Acts was related to rents prevailing in April, 1940 and allowed a fixed percentage of increase from 8 1/3% to 50%, and for those buildings constructed after 1st April 1940, the increase was from 37½% and 75%. 4. The 1960 Act, however, replaced the 1949 Act to have a new scheme of its own. It provided for a fixation of fair rent - a return on the basis of cost of construction, amenities provided and the cost of the land at certain percentage. It also provided for increase in rent depending on its locational advantages. In the decision reported in (1974) 1 SCC 424 (RAVAL & CO. Vs. K.G.RAMACHANDRAN), the Apex Court held that a perusal of the provisions showed that the legislature had applied its mind to the problem of housing 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 tenants. It wanted to be fair both to the landlord as well as the tenant.” Thus the Rent Control Act is a piece of beneficial legislation that the rights of the landlord as well as that of the tenants are protected. A balance was struck within the rights of the landlord and the rights of the tenant. 5. Section 4 of the 1960 Act relating to fixation of fair rent was substituted by Section 6 of the Amending Act 23 of 1973. This concept of fair rent as per the amendment is determined on "a percentage on the" gross return on the total cost of the buildings. The basis of working of such return is guided by the provisions of Section 4. 6. Under the present provision, the fair rent for any residential building shall be 9% gross return on the total cost of such building and 12% in the case of non-residential building. The market value of https://hcservices.ecourts.gov.in/hcservices/ the site in which the building is constructed, cost of construction, cost of providing of amenities specified in the Schedule are to be worked out in accordance with the guidelines provided under the Section. The Section provides that while calculating the market value of the site, the Controller shall take into account only that portion of the site on which the building is constructed and a portion upto 50% thereof of the vacant land appurtenant to such building, the excess portion of the vacant land treated as an amenity. Section 4 also contained a proviso putting a ceiling on the amenities to be valued at 15% in the case of residential building and in the case of non-residential building, 25% of the cost of the site in which the building is constructed. The amenities that go for valuation is given under Schedule-I. The cost of construction is to be calculated at the rates adopted for purposes of estimation by the Public Works Department of the Government public area concerned. It also permitted elasticity for the Controller to allow or disallow an amount not exceeding 30% of the cost of construction, depending on the nature of construction, apart from deducting depreciation as calculated at the rates specified in Schedule-II. 7. For the purpose of considering the contentions in these writ petitions, we need to draw our attention to Section 4, Section 5 and Section 6. These provisions deal with fixation of fair rent. While Section 4 prescribes the methodology on the fixation of fair rent, Section 5 states that the fair rent fixed would not be subjected to further increase except under stated circumstances. Section 5 states that at any time subsequent to the determination of fair rent by the Rent Controller, if some addition, improvement or alteration is carried out at the landlord’s expense and at the request of the tenant, the landlord could go for re-fixation. The re-fixation shall be comparable to the fair rent payable for a similar building in the same locality with such addition, improvement or alteration. While reserving such a right for the landlord, the Act is careful enough to take care of the interest of the tenant in that, where there is a decrease, diminution in the accommodation or amenities provided after the fixation of fair rent, a tenant can approach the Rent Controller for a re-fixation by a reduction in the fair rent. It may be noted at once the re-fixation of fair rent is related to the amenities provided, added or improved and certainly not on account of the effect of market forces on land value. The Act (Section 5 (3)) also reserved the right for those landlords or tenants to have the fair rent fixed under this amended provision, if in case, the fair rent was fixed before the date of commencement of this Amending Act, 1973 Section 5 (3). The Act prohibits entertaining a second petition for revision of fair rent except on the grounds stated in the statute. 8. Section 6 enables the landlord to recoup excess tax payable on https://hcservices.ecourts.gov.in/hcservices/ the property from the tenants. The Section comes to the rescue of the landlord where there is an increase of taxes, to be collected from the tenant. It must be noted that the increase in the taxes is not relatable to increase of rent in respect of the building. Where the amount of taxes payable for any half year commencing on the 1st April 1950 or any later date exceeds the taxes payable for the half year ending 30th September 1946 or for the first complete half year after the date on which the building was first let, whichever is later, the landlord is entitled to claim such excess from the tenant in addition to the rent payable for the building under this Act. 9. In the decision reported in (1987) 1 MLJ 385, at 386 (SHA DHANRAJ CHUNILAL Vs. VEDACHALAM CHETTIAR), this Court clearly held that in view of the rigid terms of Section 5, there is no scope for entertaining a second petition for revision of fair rent on grounds of equity and good conscience. The economic changes make no impact on the fair rent fixed under this provision, except to the exception of cases given in sub section (1) under stated circumstances or under sub section (3) where the fair rent was fixed even prior to the introduction of the amendment under the Amending Act, 1973. 10. In the context of the restricted avenues open to a landlord to have the fair rent fixed and considering the provision of Section 5 (3), disputes are raised before this Court challenging the provisions of this Act as arbitrary and hence, violative of Article 14 of the Constitution of India. The challenge made are to Section 4 and Section 5. Writ petitions herein are W.P.Nos.16576 of 1991, 2550 of 1999, 4421 and 4422 of 1999, 7134 of 2000, 20910 of 2000, 20912 of 2000, 43116 of 2002, 3399 of 2004, 3285 of 2005, and 7696 of 2005. 11. The facts in each of these cases are as follows: W.P.No.2550 of 1999: The writ petitioners herein are the owners of the property at Chennai-1 in occupation of the third respondent. The total extent of the tenanted property is of 2500 sq.ft. (2 godowns each measuring 1250 sq.ft.) 1600 sq.ft. for loading and unloading activities. The original rent of Rs.200/- was re-fixed at 946/-, the appellate Court reduced it to Rs.788/- and confirmed by this Court under orders in the Civil Revision Petition dated 17.11.1981 with effect from 24.2.1976. The said fair rent was fixed under the amended Act 23 of 1973. The grievance of the petitioners herein is that the revised rent of 1976 remains as it is even today since fair rent fixed is relatable to the date when the landlord or the tenant chooses to file the application under the 1973 Act. Confronted by the statutory restriction in Sections 4 and 5, the petitioners challenge the arbitrariness in these provisions as violative of Article 14 inasmuch as fixation of fair rent varies from time to time, tenant to tenant and from landlord to https://hcservices.ecourts.gov.in/hcservices/ landlord. The petitioners submit that when the Act has prohibited a second look on the fair rent fixed, it creates a different kind of class among the landlord and the landlord on the one hand and the tenant and tenant on the other hand, which has no relevance to the object of the Act or to the nexus to the policy underlying the enactment, namely, a reasonable return to the landlord. The petitioners submit that similarly situated buildings at the same place have different rent fixation depending on the date on which the landlord chooses to file the application for fair rent fixation. This classification, according to the petitioners, have no absolute nexus or relevance to the object of the Act. The petitioners also submit that Section 5 is constitutionally invalid insofar as it had lost sight of the value of the property undergoing change in tune with the circumstances and progress in a given urban area. The petitioners also cite the example of the provisions of the Andhra Pradesh Act, where there are provisions exempting new buildings from the provisions of the Act without any restriction and for all times to come. The Supreme Court struck down the same as violative of Article 14 of the Constitution of India. The petitioners submit that the Tamil Nadu Act contains a provision which attaches permanency to the fair rent fixed under the 1973 Act, hence violative of Article 14. The petitioners also referred to the case of RATTAN ARYA V. STATE OF TAMIL NADU reported in (1986) 3 SCC 385, wherein, the Apex Court struck down the provisions under Section 30(2) which denied benefit to the residential tenants where the rent exceeded Rs.400/-. The petitioners placed reliance on this decision in support of their contention that the classification was unreasonable and what was constitutionally valid and good cannot be said to be so in 1986 when the Supreme Court had occasion review the matter. The petitioners further submit that the legislature cannot overlook the fact of changes in the facilities surrounding the building which had gone for fixation of fair rent and hence, the provision which puts an embargo in total neglect of the changed infrastructural facilities, is bad in law. The petitioners further submit that periodical revision is necessary to see that the tenants are not conferred with a disproportionate benefit and the social legislation like the Rent Control Act ought to take note of the changed circumstances and the petitioners submits that where the Government had taken remedial measures as in the case of wages and salaries, the same is lost sight of while providing for increase in rent. 12. Referring to Section 5, the petitioners referred to Section 5 (1) as an objectionable portion which reads “no further increase in such fair rent should be permissible except in cases where some additions, improvements or alterations have been carried out at the landlord’s expenses and if the building is then in occupation of the tenant at his request.” According to the petitioners, if the above https://hcservices.ecourts.gov.in/hcservices/ objectionable portion is struck down, the first proviso to Section 5 (1) becomes unworkable. Hence, the entire Section 5(1) with the first proviso deserved to be struck down as constitutionally invalid, it being violative of Article 14 of the Constitution of India. W.P.Nos.4421 and 4422 of 1999 and 16576 of 1991: 13. These writ petitions concern with leasing of property to Government Departments. The petitioners herein state that the Government, as per the order dated G.O.No.753, Public Works Department, dated 7.4.1984, directed the Chief Engineer (Buildings), Public Works Department, Chepauk, Chennai, to advise the officers of the Public Works Department to fix a reasonable rent for the buildings taken on lease by the Government Departments once in three years. The fair rent for the said property was fixed as early as 6.12.1985, taking note of the value of the land and building as on 15.9.1980. It is stated that taking into consideration the Government guideline, the value of the said land and building as on the date of filing the writ petitions was to the tune of Rs.1,92,84,180/-. The fair rent fixed taking the value of the property at Rs.6,86,146/- was at Rs.6,000/-. The petitioners had preferred W.P.No. 16576 of 1991 for a writ of Mandamus to direct the second to fourth respondents namely, Chief Engineer, Public Works Department, Revenue Divisional Officer, Accommodation Controller, Coimbatore, Divisional Engineer (Buildings), Public Works Department, Coimbatore, to implement the Government Order dated 7.4.1984 and to continue to do so once in three years and to consequently direct respondents-5 and 6 to pay a reasonable rent as fixed by the respondents. The petitioners state that the writ petition is still pending before this Court. W.P.No.7134 of 2000: 14. As far as W.P.No.7134 of 2000 is concerned, the petitioner in this case is the owner of the premises in which the first floor is