IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE THIRTIETH DAY OF SEPTEMBER TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR CIVIL REVISION PETITION No.1687, 1699 and 1840 of 2008 CRP.No.1687 of 2008 BETWEEN Kandula Sudarsana Rao. ... PETITIONER AND M/s. Sikha Jewellers. ...RESPONDENT CRP.No.1699 of 2008 BETWEEN Kandula Sudarsana Rao. ... PETITIONER AND Babu Pearls. ...RESPONDENT CRP.No.1840 of 2008 BETWEEN Kandula Sudarsana Rao. ... PETITIONER AND Sikha Venkateswara Rao. ...RESPONDENT Counsel for the Petitioner: MR. CH. PUSHYAM KIRAN Counsel for the Respondents: MR. P. NARASIMHA RAO MR. G. RADHA KRISHNA The Court made the following: COMMON ORDER: These three revisions arise out of R.C.A.Nos.17, 16 and 22 of 2005 being allowed by the lower appellate Court under separate judgments dated 27.12.2007 setting aside the common order of the learned Rent Controller cum Principal Junior Civil Judge, Rajahmundry in R.C.C.Nos.27 and 28 of 2000 and 36 of 1998 dated 28.02.2005 allowing the applications filed by the petitioner for fixation of fair rent under Section 4(1) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short ‘the Act’). 2. For the sake of convenience the petitioner herein is referred to as ‘landlord’ and the respondents herein are referred to as ‘tenants’. While the landlord is common in all the three revision petitions, the tenants are different. 3. In CRP.Nos.1687 and 1699 of 2008 the rent payable by the tenant was Rs.800/- per month and enhancement thereof was claimed at Rs.3,000/- per month. In CRP.No.1840 of 2008 the rent payable was Rs.400/- and enhancement was sought to Rs.1200/- per month. The learned Rent Controller enhanced the rent in the first two revisions to Rs.950/- with 20% enhancement every two years whereas in the third revision petition the rent was enhanced to Rs.850/- with 15% enhancement every two years. The lower appellate Court under the impugned judgments has reversed the said common order at the instance of the tenants. Hence, these revisions by the landlord. 4. As per the averments in the application under Section 4 of the Act in each of these cases, the building in question consists of 10 shops belonging to the landlord and the shops are in occupation of the tenants from 20 years approximately and the shops are situated on 40’ road facing K.V.R Swamy Street at Rajahmundry. The original dimensions of the shops are stated to be substantial i.e. 9’ x 13’ approximately, which got affected by road widening to the extent of 5’ and even now the approximate dimensions of the shop is 9’ x 7’ for some shops and for other shops it is 12’ x 6’. 5. It is the case of the tenants that the shops are located on the main road except the shop, which is subject matter of CRP.No.1840 of 2008 and all the tenants are doing business in Gold and Jewellery in the said shops. The landlord sought fixation of rent on the ground that the locality where the shops are situated is a highly commercial busy market in Rajahmundry town and the rental values of the premises in and around the place where the shops are located are quite high on per square feet basis with potential of substantial enhancement. The tenants opposed the applications for fixation of rent on the ground that the size of the respective shops got reduced after road widening and the tenant had to bear the expenses of renovation and placing new shutters and thereby no enhancement of rent is warranted. 6. Evidence was led on behalf of the landlord by examining the adjacent shop owners as well as by filing documents of third parties, Exs.X1 to X4, which contains the lease deed dated 17.04.2003 marked as Ex.X4 concerning another property on the same road, as the shops in question. The said document was sought to be supported by leading oral evidence of the scribe – P.W.3. 7. Learned counsel for the petitioner submits that even the after widening of the road to 40’, each of the tenanted shops are substantially big and that the enhancement sought for is quite reasonable and is less than the prevailing rental values in the locality. 8. Learned counsel for the respondents/tenants, on the other hand, contended that the basic evidence relied upon by the landlord is Ex.X4, which is sought to be proved by the scribe – P.W.3 without examining the lessor and the lessee and further submits that it relates to a new building. It is also contended that after the judgment of a Division Bench of this Court in SURESH GIR v. K. AHADEV[1] sub-sections (2) to (4) of Section 4 of the Act having been struck down, there is no mechanism available for working of Section 4(1) of the Act. It is contended that in the absence of criteria for determination of fair rent, the impugned fixation of fair rent is rendered arbitrary and unsupported by any statutory guidelines. Learned counsel also strongly criticized that the periodical enhancement granted by the learned Rent Controller was never pleaded by the landlord nor there is any evidence in support of the same. The periodical enhancement, which is unjustified, is said to be wholly unrealistic and excessive. Learned counsel for the respondents/tenants placed strong reliance on certain paragraphs of the decision in SURESH GIR’s case (1 supra) and also placed reliance upon the decision of the Supreme Court in MISS. LIZA ARULANANDAM v. A.S. SULOCHANA[2]. 9. I have considered the submissions aforesaid and at the outset, I must repel the contention of the tenants that after sub-sections (2) to (4) of Section 4 of the Act were declared unconstitutional, Section 4(1) is now rendered unworkable. The precise argument as that of the learned counsel for the tenants was repelled by a Division Bench of this Court in SURESH GIR’s case (1 supra) and it has been categorically held in paras 38 to 41 as under: “38. We have no difficulty in holding the view that sub-section (1) to Section 4 can remain on the Statute book without any legal objection and effectively operate without being subject to the clogs envisaged by subsections (2) to (4). If we hold that sub-section (1) docs not survive, there will be no provision at all to fix: the fair rent. That means that agreed rent will prevail. Neither the tenant nor landlord can apply to the Court for fixation of fair-rent. Such a situation would undoubtedly frustrate the objectives of the rent legislation, control of rent being one of the objectives. We are inclined to think that the Legislature would have still thought of enacting the provisions like sub-section (1) even without framing the criteria governing fair rent. It is true that the conferment of power to determine the fair rent sans the guidelines or criteria for such determination leads to the situation of the Court fixing the fair rent according to its own perceptions of what should be the fair rent. An uniformity in approach may not be possible. But, the uncertainties or grey areas that might surface in the course of adjudication by the Rent control Court does not make it a futile provision operating at a cross-purpose with the legislative intention. It may be that subsection (1), if it stood in the company of valid guidelines or norms, the legislative purpose could have been better achieved and its utility would have been far greater. But the total removal of sub-section (1) would do far more damage to the legislative intent and social purpose sought to be achieved than its extrication from the allied provisions prescribing guidelines. The Legislature would not have contemplated a vacuum in the arena of fixation of fair rent, when it is the avowed objective of the legislature to provide a remedy both to the extent and the landlord in the matter of fixation of fair rent. 39. It is to be noted that sub-section (1) of Section 4 confers a substantive power on the Controller to fix the fair rent of a building after holding an enquiry as may be considered necessary. The factors and norms that have to be kept in view by the Controller in the exercise of jurisdiction to fix the fair rent are set out in sub- section (2). It cannot be said that subsection (1) falls or survives along with subsection (2). Be it noted that sub-section (1) does not contain any restrictive words indicating that the exercise of power under sub-section (1) is made conditional upon the Court following the legislatively ordained criteria. The retention of sub-section (1) and the preservation of the power of the Rent Controller to fix the fair rent on ordinarily accepted notions will not in any way defeat the legislative intent. On the other hand, the absence of such a provision will stifle one of the objectives of legislation. We have, therefore, no hesitation in holding that sub-section (1) survives notwithstanding the declaration that sub-sections (2) to (4) are ultra vires the Constitution. That is not to say that the Legislature should get reconciled to this situation, As already observed, for the better fulfilment of the objectives of the rent legislation and the interests of certainty and uniformity of law, it is highly desirable that the Legislature steps in at the earliest and undertakes the exercise of evolving new criteria in keeping with the objectives of the Act and the change in living conditions. 40. It is not necessary for us to expound the concept of fair rent and to dwell at length on the modalities of arriving at the fair rent in the absence of definite criteria. Suffice it to say that the expression fair rent in synonymous with 'reasonable rent' - reasonable from the point of view of both tenant and landlord. It undoubtedly excludes from its fold exorbitant rent and the abnormal or extraordinary circumstances. 41. What remains now is the question whether on merits the order of the appellate authority fixing the fair rent at Rs.650/- per month merits interference.” In view of the above pronouncement, the learned Rent Controller has the jurisdiction to fix the reasonable rent as fair rent and it is not, as if, that the entire Section 4(1) of the Act is unguided or has become unworkable in view of the mandate that the learned Rent Controller shall fix the fair rent on the criteria of ‘just and reasonable’. 10. So far as the other aspects raised by the learned counsel for the tenants based upon the decision of the Supreme Court in MISS. LIZA ARULANANDAM’s case (2 supra) are concerned; it is clearly distinguishable as that was a case, which arose under the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 wherein Section 4 thereof had entirely different criteria provided based upon the cost of the building unlike Section 4 under our Act. The said criteria, therefore, cannot be imported and applied to the present case arising under our State Act. 11. It is, however, true, as contended by the learned counsel for the tenants, that Ex.X4 cannot be entirely relied upon as that relates to a new building and only the scribe of the said document was examined as P.W.3. Learned counsel for the tenants has, however, not explained the cross- examination of R.W.1 wherein he accepts that ‘It may be a fact that one cannot get any shop on lease at not less than Rs.5/- per square foot in KVR Swamy Road. The rental values in the locality has been enhancing from time to time…It might be a fact that a shop similar to that of schedule shop might fetch Rs.3000/- p.m. If it is leased out at present…’ 12. The above admission of the tenant, R.W.1, (which is common evidence on behalf of the all the tenants in these batch of cases) clearly shows that the enhancement of rent with the current values is warranted. P.W.1, in his evidence, states that the locality in which the schedule premises is situated is commercially flourishing area and the nearby tenants are paying huge rents and the locality is famous for gold ornaments, bankers and pawnbrokers. He also speaks of the practice of enhancing the rents once in two years at 20% and had examined P.W.2, the cousin of the landlord, who also is a landlord of another building, to substantiate the periodical enhancement prevailing in the locality. The evidence of a witness of the respondents/tenants – R.W.4 also throws light on the aspect as to the custom in the market to increase rents periodically every 2, 3 or 4 years, which is accepted by him. He also states that after the road widening the rents for the new tenants are higher than the earlier rents paid by old tenants. The aforesaid evidence, on record, coupled with the admissions of tenants, as extracted above, clearly justifies the enhancement. 13. The learned Rent Controller has adopted the criteria of enhancement of rent reasonably, as is evident from the ultimate rent fixed by him, in spite of the admission of the tenant, R.W.1, that similar accommodation would fetch rent of Rs.3000/- per month, the learned Rent Controller has fixed the rent at Rs.950/- per month. I am, therefore, unable to see any infirmity in the reasoning and the criteria adopted by the learned Rent Controller in the fixation of fair rent, as discussed above. 14. The lower appellate Court simply brushed aside the said evidence on record and proceeded to reject the landlord’s claim for fixation of fair rent by observing that the agreed rent cannot be enhanced except under Section 5 of the Act and has described the application of the landlord under Section 4 of the Act as a dubious means for fixation of rent over the agreed rent. There is absolutely no justification for such an approach on the part of the lower appellate Court when the statute provided for fixation of fair rent over and above the agreed rent as per the scheme of Section 4(1) of the Act and the said provision is available not only to the landlord but also to the tenant and it cannot be wished away by describing it as dubious. 15. So far as enhancement of the rent is concerned, the lower appellate Court disallowed the periodical enhancement on the ground that the learned Rent Controller has no authority to impose a new condition into agreement of lease as well as on the ground that there are no pleadings by the landlord. So far as the jurisdiction of the learned Rent Controller for granting periodical enhancement is concerned, I have upheld the same in JUPUDI PARTHASARATHY v. KONDAPALLI RAJESHWARI[3] and the reasons therefor given in the said decision need not be reiterated here once again. So far as the lack of pleading in support of periodical enhancement is concerned, that part of the contention of the learned counsel for the tenants appears justified, but it has to be remembered that P.W.1, in his evidence, has reiterated the plea relating to periodical enhancement and sufficient evidence in support thereof was laid by the landlord. The tenants also being conscious thereof have also led evidence and as stated above, R.W.4 examined by the tenants themselves supports the practice of enhancement of rent periodically. I am, therefore, unable to see any factual or legal infirmity in the periodical enhancement as ordered by the learned Rent Controller, as the same is shown to be in conformity with the prevailing practice in the locality. 16. I am, therefore, unable to see any reason to take a view different from that of the learned Rent Controller. The impugned judgments of the lower appellate Court are accordingly set aside and the orders of the learned Rent Controller shall stand restored. The civil revision petitions are accordingly allowed. However, there shall be no order as to costs. _____________________ VILAS V. AFZULPURKAR, J September 30, 2011 DSK [1] 1998 (1) ALD 25 [2] AIR 1990 SC 2289 [3] 2008 (6) ALD 398