IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 20TH SEPTEMBER 2011 / 29TH BHADRA 1933 RCRev..No. 206 of 2011(Y) ------------------------- RCA.13/2007 OF RENT CONTROL APPELLATE AUTHORITY, KASARAGOD RCP.6/2006 OF RENT CONTROL COURT, KASARAGOD .................... PETITIONER/APPELLANT/2ND RESPONDENT ------------------------------------------------------- M.THILAKAN, BATTAMPATA, KUDLU VILLAGE, KASARAGOD P.O. BY ADV. SRI.J.OM PRAKASH RESPONDENT(S)/RESPONDENTS: PETITIONERS& 1ST RESPONDENT -------------------------- 1. M/S.B.AMOO AND BROTHERS, REP. BY ITS MANAGING PARTNER, NO.2104, IST RESPONDENT IS PROPRIETOR, HOTEL AIRLINES, BANK ROAD, KASARAGOD. 2. B.ABDULKHADER HAJI, DO. DO. 3. B.ABDUL RAHIMAN, DO. DO. 4. B.ABDULLAKUNHI, DO. DO. ALL ARE MUSLIM, IRADOR, NO.2104, RESIDING AT BEVENJE, CHENGALA VILLAGE AND P.O., KASARAGOD DISTRICT. 5. THE MANAGING DIRECTOR, S.D.PHARMACY, H.O. ALAPPUZHA, P.O. ALAPPUZHA. ADV. SRI.P.K.MUHAMMED THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 20/09/2011, ALONG WITH RCR NO. 229 OF 2011 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: PIUS C. KURIAKOSE & C.K.ABDUL REHIM, JJ. ----------------------------------------------- RCR. No. 206 & 229 of 2011 ----------------------------------------------- Dated this the 20th day of September, 2011 O R D E R Pius C.Kuriakose, J. RCR. No. 229 of 2011 is filed by the first respondent in RCP No. 6 of 2006 the Managing Director of S.D. Pharmacy, Alapuzha arrayed as the tenant in the rent control petition. Respondents 1 to 4 in the above RCR are the landlords who filed the rent control petition and the 5th respondent is allegedly the sub-lessee in possession of the building. RCR. No. 206 of 2011 is instituted by Sri. Thilakan, the sub-lessee arraying the landlords and the tenant as the respondents. The rent control petition was instituted seeking eviction on the grounds of arrears of rent under Section 11(2) (b), bona fide need for own occupation under Section 11(3) and the ground that the tenant has sublet the building unauthorisedly under Section 11(4)(i). The landlords' case was that the building belongs to them, being co-owners. RCR. Nos. 206 & 229 of 2011 -2- The building was let out to the tenant on 1-4-1972 for conducting a branch of S.D.Pharmacy at Kasaragod. On the terms of the lease the tenant has no right to sublet the building. In the beginning the monthly rent was Rs.250/-. The same was increased periodically and till 31-12-2004 the rent was Rs.1500/-. On 31-12-2004 it was agreed between the landlords and the tenant that the monthly rent will stand enhanced to Rs.5500/- per mensem with effect from 1-1- 2005. But the tenant defaulted payment of rent. It was the alleged sub-lessee who was paying rent. The landlords were receiving rent from him believing that he was paying rent as the agent of the tenant. The landlords were under the impression and understanding that the tenant was conducting their business through their agent the alleged sub-lessee. It is recently understood that the sub-lessee is conducting S.D. Pharmacy in his individual capacity and that it is the sub-lessee who is in possession of the building. The tenant has no control over the business carried on in the RCR. Nos. 206 & 229 of 2011 -3- building. Exclusive possession of the building is transferred by the tenant to the sub-lessee in contravention of the terms of the lease. The sub-lease has not been terminated though statutory notice was sent to the tenant. 2. In the context of the ground under sub-section (3) of Section 11 it was urged by the landlord that Sri. B. Nazar, son of B. Amoo who is one of the Managing Partners of the landlord firm is in need of the building for conducting a fancy shop. Sri. Nazar is employed in Ajman, UAE and intends to settle down in his native place Kasaragod. The landlords bona fide need to accommodate Nazar in the building. Through the counter statement filed by the tenant it was contended that the tenant continued as a tenant of the building only upto 31-5-1981 and thereafter the building was surrendered to the landlords. Presently the allegedly sub-lessee is in occupation of the room. The alleged sub-lessee is an agent to sell medicines manufactured by S.D. Pharmacy. The alleged sub-lessee RCR. Nos. 206 & 229 of 2011 -4- has to sell S.D.Pharmacy's medicines and hence the shop room is named as SD Pharmacy. After 31-5-1981 it is the alleged sub-lessee who alone is the tenant. The tenant is not conducting any business in the shop room in that building. The need for Nazar put forth in the RCP is not bona fide. 3. The alleged sub-lessee filed a separate counter statement in which it is contended that on 31-5-1981 the tenant surrendered the building to the landlord. On that day the alleged sub-lessee approached the landlord to let out the building to him. The landlord refused to let out the building to the alleged sub-lessee initially. But later the landlord agreed to let out the building provided rent is paid at the rate of Rs.700/- per mensem. Hence from June 1981 it is the alleged sub-lessee who is conducting business as tenant. The alleged sub-lessee is the tenant and not a sub- lessee. In the year 1992 rent was enhanced to Rs.800/- per mensem and with further enhancement the rent was RCR. Nos. 206 & 229 of 2011 -5- enhanced in the year 2002 to Rs.1500/- per mensem. As per the understanding, the rent is to be enhanced every year at the rate of 10% per annum. Rent was paid for the period upto December 2004. Thereafter, the landlords refused to receive the rent. Hence rent was sent by money order. Money orders were refused. The allegation that rent was enhanced to Rs.5500/- per annum with effect from 1-1- 2005 is incorrect. The need put forth on behalf of Nazar was disputed and described as mala fide. It was contended that the landlords have several buildings in Kasaragod Municipality. It was also contended that several rooms in hotel “Air Lines” belonging to the landlords are vacant and some shop rooms which were vacant have been subsequently let out by the landlord to other tenants. The alleged sub-lessee claimed the protection of the second proviso to sub-section (3) of Section 11. The Rent Control Court enquired into the contentions and the evidence consisted of oral testimonies of PW-1 and RWs. 1 and 2 and RCR. Nos. 206 & 229 of 2011 -6- documents Exts.A1 to A5 and B1 to B26. The Rent Control Court held that the landlord was entitled to an order of eviction on the ground of sublease. The claims on the grounds of arrears of rent and bona fide need for own occupation were declined. 4. The tenant preferred RCA. No. 18 of 2007 challenging the eviction order passed on the ground of sublease. The alleged sub-lessee preferred RCA. No. 13 of 2007 challenging the finding that he is a sub-lessee. The landlords challenged the order declining eviction on the grounds of arrears of rent and bona fide need for own occupation by filing RCA. No. 17 of 2007. The learned Appellate Authority under the impugned common judgment in the RCAs. has dismissed all the appeals. Thus the eviction order passed under Section 11(4)(i) stands confirmed. The specific finding entered by the learned Appellate Authority regarding sublease is that surrender of the building by the tenant was not proved and so also grant RCR. Nos. 206 & 229 of 2011 -7- of fresh lease by the landlord in favour of the alleged sub- lessee. Hence, according to the Appellate Authority, the only inference which can be drawn is that the alleged sub- lessee is unauthorised possession as a sub-lessee. 5. In these revisions various grounds are raised assailing the judgment of the Appellate Authority. It is urged in both the revisions that the statutory authoriies should have found that the alleged sub-lessee is the tenant who is paying the rent and that by conduct the landlord has accepted the alleged sub-lessee as the tenant and therefore there is no objectionable sublease. 6. We have heard the submissions of Sri. S.Sanalkumar, learned counsel for the revision petitioner in RCR No. 229 of 2011 and that of Sri. J. Omprakash, learned counsel for the revision petitioner in RCR No. 206 of 2011. We have heard the submissions of Sri. P.K.Muhammed, learned counsel for the landlord who had lodged a caveat on behalf of the landlords. Sri. Sanalkumar and Sri. RCR. Nos. 206 & 229 of 2011 -8- Omprakash would assail the order of the Rent Control Court and the judgment of the Appellate Authority, particularly the findings that objectionable sublease stands established. Sri. P.K. Muhammed per contra would support the impugned order and judgment on the various reasons stated therein. Even though the findings are divergent, as requested by both sides, we have made a survey of the evidence on record, particularly Ext. B3 series of documents and the oral evidence of PW-1 and RWs. 1 and 2. We are convinced that the appreciation of the above items of evidence by the two statutory authorities has not been proper. The above items of documentary and oral evidence shows that the landlords have recognised the alleged sub-lessee, the revision petitioner in RCR No. 206 of 2011 to be their own tenant. The landlords have been receiving rent from the revision petitioner in RCR No. 206 of 2011 knowing fully well that it is he who is conducting the business. The oral evidence of PW-1 is that he was told by the tenant that with effect from RCR. Nos. 206 & 229 of 2011 -9- 1-6-2011 the monthly rent will be enhanced to Rs.700/- per mensem and that the revision petitioner in RCR no. 206 of 2011 will continue to occupy the building as agent of S.D. Pharmacy. It is not in dispute that it is the agency business of S.D. Pharmacy which is being conducted in the building. The approach of the statutory authorities was too technical and pedantic when it came on appreciation of evidence. The statutory authorities are to be governed by the principles of justice, equity and good conscience in the matter of appreciation of evidence and taking of decision. It will be unjust and inequitable in our opinion to hold that there has been objectionable sublease. The arrangement of the revision petitioner in RCR. 206 of 2011 possessing and enjoying the building for the conduct of agency business of S.D. Pharmacy is an arrangement to which the landlords have agreed, an arrangement which continued over more than two decades from 1-6-1981 till early 2005. The present arrangement agreed to by the landlord is evident RCR. Nos. 206 & 229 of 2011 -10- from Ext.B3 series and also from PW-1's oral evidence. The eviction order passed on the ground of subletting is absolutely unsustainable. We have no hesitation to interfere with the same as the findings entered by the statutory authorities concurrent though they be in the context of ground of subletting are illegal, irregular and improper. 7. Sri. P.K. Muhammed, learned counsel for the landlords would support the judgment of the statutory authorities with all his might. According to him, this court is not justified in interfering with the findings of fact entered concurrently by the fact finding authorities. According to us, when the findings of fact are perse contrary to the evidence on record including evidence adduced by the landlords, this court will be justified in revision in interfering with those findings. Inter alia Mr. Muhammed also submitted that the monthly rent of Rs.1500/- per mensem which is being presently paid is ridiculously low. If the building situated in RCR. Nos. 206 & 229 of 2011 -11- a commercially important area of Kasaragod town is let out today, the same will fetch a monthly rent of minimum Rs.15000/-. 8. According to the learned counsel for the revision petitioners, the very provocation for the landlords to institute the rent control petition was that the disinclination of the tenant to the demand to pay rent at the rate of Rs.5500/- per mensem. Going by the local rates the monthly rent of this building can never exceed Rs.5,500/- per mensem. 9. The result of the above discussions is that the RCR No. 229 of 2011 will stand allowed. The judgment of the Rent Control Appellate Authority and the order of the Rent Control Court to the extent the eviction is ordered under Section 11(4)(i) is set aside. RCR No. 206 of 2011 is also allowed to the extent it pertains to the ground under Section 11(4)(i). The rent payable by the petitioner in RCR. No. 206 of 2011 is re-fixed with effect from 1-10-2011 at RCR. Nos. 206 & 229 of 2011 -12- Rs.7,500/- per mensem. We make it clear that this re- fixation is tentative and it will be open to either party to approach the Rent Control Court for regular fixation of fair rent. Till fair rent is fixed regularly in terms of Section 5 the petitioner in RCR. No. 206 of 2011 shall pay rent to the respondent/landlord at the rate of Rs.7500/- per mensem. (PIUS C.KURIAKOSE, JUDGE) (C.K.ABDUL REHIM, JUDGE) ksv/-