Case: Raja Bahadur Motilal Bombay Mills Ltd.And Another Vs. M/S. Govind Ram Brothers (P) Ltd., Andanother

or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. It takes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of the case?40. Mr. Cooper contends that the first trial court (Samson, J.) had rightly found that the premises in question on account of extensive alterations and constructions had undergone a complete change after the basic date, and therefore, standard rent could not be determined by apportioning the rent of the whole among the parts. It is maintained that this finding of Samson J. was wrongly set aside by the High Court and must be deemed to be still holding the field. Objection is also taken to the amendments allowed by the trial court on remand. In the alternative, it is argued that even the courts below found that properties 986/10, 983/11, 983/12 and 984/54 were admittedly new structures and extensive repairs and replacements had been made in the remaining premises which had been destroyed or severely damaged by fire in 1948-49. On account of these substantial alterations and reconstructions, the premises in question had lost their identity and consequently, the principle of apportionment was not applicable.41. The first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings still survive.42. The question whether a certain property has changed its identity after the basic date is largely one of fact. The courts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/- being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs. 1,700/-. The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.43. Lastly, it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs. 30/- per sq. yd. on the basis of an instance (Ex. R. 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948. It is added that some photostat copies of saledeeds pertaining to the relevant year were produced by Mr. Deweja, architect examinsional Court wrongly rejected them as unproved. It is maintained that in 1948, the market value of the site underneath the structures was Rs. 120/- per sq. yd. In support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account. Counsel has cited - Rukmanibai Khunji Cooverji v. Shivnarayan Ram Ashre, (1965) 67 Bom LR 692.44. We are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/- per se. yd. which, according to their estimate, after adding Rs. 30/- per sq. yd. for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs. 120/- per sq. yd. We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re-investigate factul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]29. True, that unlike the English Rent Control Act of 1920 or the later English Acts, the (Bombay) Act does not expressly speak of apportionment. But the language of its relevant provisions construed consistently with the scheme and inbuilt policy of the Act, is elastic enough to permit the fixation of standard rent on apportionment basis. As noticed already, Section 11(1) gives a discretion to the Court to fix such amount as standard rent as it "deems just". However, in exercising this discretion the Court has to pay due regard to (i) the provisions of the Act and (ii) the circumstances of the case.30. Apportionment - or equal distribution of the burden of rent on every portion - is a rule of justice and good sense. If the standard rent of a whole was a specific amount, it stands to reason that the standard rent of a part or sub-division of that whole should not ordinarily exceed that amount. Therefore, if in the circumstances of a given case the Court feels that for securing the end of justice and giving effect to the provisions and policy of the Act, it is reasonably necessary and feasible to work out the standard rent by apportionment, it can legitimately do so. This principle, however, is applicable where on the basic date, that portion of which the standard rent is to be determined, had not been let separately as one unit, but the whole of which it is a part, had been let on that date. Apportionment postulates that on account of its having been let on the basic date, the whole had acquired a standard rent which has to be allocated to smaller units subsequently carved out of it.31. It is thus clear that the principle of apportionment is not alien to the spirit of the Act, and has indeed been often invoked by the courts in fixing standard rent under this Act.In Narayanlal Bansilals case (1965) 67 Bom LR 352 (supra), a Division Bench of the Bombay High Court determined standard rent of another part of this very estate of the Mills in accordance with that principle.We see force in the argument as also textual and pragmatic support. But these considerations do not preclude the Court from importing the flexible factors of fairness suggested by the circumstances of the case. Indeed Section 11, as explained earlier, obliges the Court to do it. Moreover, the interpretation of "premises" adopted by the learned Judge was a little too literal, narrow and divorced from the purpose and content of the provisions relating to fixation of standard rent. Nor was it in accord with the scheme and object of the 1918 Act. The Courts jurisdiction to consider, as a strong circumstances, proper apportionment of rent is not taken away, in our view., it is contended that the courts below have seriously erred in evaluating the land under the suit properties at Rs.30/- per sq. yd.on the basis of an instance (Ex. R. 6) of the year 1942, while they should have taken into account the value of the land as in the year 1948. It is added that some photostat copies of saledeeds pertaining to the relevant year were produced by Mr. Deweja, architect examinsional Court wrongly rejected them as unproved. It is maintained that in 1948, the market value of the site underneath the structures was Rs.120/- per sq. yd.In support of his contention that the value of the land at the date of the letting is the appropriate value to be taken into account.We are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/- per se. yd. which, according to their estimate, after adding Rs.30/- per sq. yd.for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs.120/- per sq. yd.We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath to re-investigate factul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.If on the basic date, the suit premises were not let out separately but were a part of theof a larger demiseas in the instant casedifficulty arises in giving effect to the statute. Clause (c) of Section 11(1) then comes into operation. To resolve the difficulty this clause and the related provisions are not to be construed in a narrow technical sense, which would stultify or defeat their object. It is to be interpreted liberally in a manner which would advance the remedy, suppress the mischief and foil subtle inventions and evasions of the Act. Construed in accordance with this socially relevant rule in Heydens case, the meaning of the premises having been let at one time as a whole, spoken of in this clause, can legitimately be deemed to cover the larger premises which, on the basic date, had been let as a whole and of which the suit premises was a part let out subsequently. In any event, the amplitude of the phrase " or any other reasons" in the latter part of the clause, is wide enough to embrace cases of this kind and confers a plenary curative power on the Court.However, while conceding that apportionment is not foreign to the scheme purpose and policy of the Act, we will like to emphasis the need for caution and circumspection in invoking it. It is not to be rigidly and indiscriminately applied as arule of law regardless of time and circumstances or the equities of the case. A doctrinnaire approach, not consistent with a just and fair determination, stultifies the whole salutary purpose of justice to both the landlord and the tenant. If necessary, it can be adjusted, adapted and attuned in the light of the particular circumstances of the case, to satisfy the statutory requirement of fixing the standard rent at a "just" amount. Thus, if after the material date, the landlord has made investments and improvements in the premises, it will be just and reasonable to take that factor also into account and to give him a fair return on such investments. Further, in apportioning the rent, the Court must consider other relevant circumstances, such as "size, accessibility, aspect and other physical advantages" enjoyed by the tenant of the premises of which the standard rent is in question, as compared with those of the rest of the property in which it is comprised (seeBainbridge v. Congdon (1925) 2 KB261). Where after the basic date, the premises completely change their identity, apportionment as a method of determining just standard rent, loses its efficacy and may be abandoned altogether. We have only illustrated, not exhaustively enumerated the relevant circumstances and their implications.We reject the narrow interpretation of the relevant provisions of Sections 2 and 11, canvassed for by the appellants, for two reasons : Firstly, it will leave the door wide open for evasion of this statute by – what Abbot C. J. in Foxv. Bishop of Chester, (1824) 2 B and C 635at p. 655called "shift or contrivance". All that a greedy landlord need do to squeeze out more rent would be to divide his premises into several parts and let them out separately on exorbitant rents. Such an evasion may amount to a fraud upon the statute. Secondly, such a construction, so manifestly subversive of one of the primary objects of the Act, would be wholly beyond the intendment of the Legislature.39. For reasons aforesaid we would negative the first contention of Mr. Cooper, as an inflexible proposition and answer the first part of the question posed in the affirmative to the extent indicated. Ittakes us tot he second part of that question, namely, whether the principle of apportionment was correctly applied to the facts of theThe first part of the contention based on the judgment of Samson J. is groundless. The judgment of the first trial court was set aside in toto by the Revisional Court, and further by the High Court and the case was remanded for de novo trial to the trial court which therefore, decided the case afresh after allowing the applicant to amend his R.A.Ns. It is too late in the day any way to argue on the assumption that the findings stillcourts below have found that excepting properties 983/10, 983/11, 983/12 and 984/54 which were admittedly new structures construed near about 1948, the rest of the properties, namley 983/1 to 983/9 had not lost their identity. The courts therefore, worked out the economic rent of these new structures by capitalisign their value and gave the landlord a fair return on his investments and fixed their standard rent mainly on that basis.It was with regard to the unchanged old properties 983/1 to 983/9 that the High Court and the Revisional Court mainly adopted the method of apportionment. Even so, it allowed the landlord fair return over Rs. 14,448/being the cost of flooring, ceiling and other fixtures fixed to property 983/6. Now it is disputed that on the basic date (September 1, 1940), these properties in question were parts of a larger entity comprised in a single lease or tenancy in favour of Sound Studios at a monthly rent of Rs.The courts below have therefore taken into account this basic circumstance along with the other relevant facts of the case. We do not find anything so wrong or unfair or untenable in the method adopted by them which would warrant an interference by this Court in exercise of its special jurisdiction under Art. 136 of the Constitution. Not that apportionment must be applied in all cases as a rule of law but that, if applied along with other consideration dictated by a sense of justice and fairplay cannot be condemned by this court as illegal. We therefore, overrule this contention, also.e are unable to accept this contention also. The courts below in capitalising the structures, 983/10 to 983/12 and 984/54, did take into account the value of the land married to those properties at the rate of Rs. 50/per se. yd. which, according to their estimate, after adding Rs.per sq. yd.for escalation, would be the market value of that land in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9 was fixed mainly on apportionment basis, the courts did not think it necessary to take the value of their sites separately into computation in fixing the standard rent. Moreover, there was no evidence on the record to show that the value of the land in question, in the year 1948 was Rs.per sq. yd.We therefore, do not think it necessary to examine Cooverjis case, (1965) Bom LR 692 cited by the Counsel. We however, do not rule out the propriety of paying regard to escalations in land value as put forward by Mr. Cooper, but do hold that this Court will be loath tofactul conclusions not shown to be perverse or manifestly unjust. Such is not the case here.