Case: Roshan Lal Mehra Vs. Ishwar Das

the necessary finding that the rent charged by the landlord was excessive. The final order of the Rent Controller shows without doubt that he was satisfied that the rent charged by the landlord was exho bitant and excessive. We are unable to hold that in these circumstances there has been any contravention of para. 2 of Sch. IV of the Control Act, 1947.13. Another objection taken by the landlord to the proceedings before the Rent Controller arises out of the circumstance that the Rent Controller in fixing the standard rent for the entire building had fixed the rent even for vacant shops i.e. shops which were not in occupation of any tenant at the time. In the final order which the Rent Controller passed, he fixed the standard rent for all the shops at Rs. 335/- per month and in the calculation sheet, which was part of the final order made by the Rent Controller on January 11, 1949, three shops have been shown to be vacant. It has been contended before its that the Rent Controller had no jurisdiction to fix the standard rent for vacant shops and the argument is that the way be proceeded to fix the rent for the entire building vitiated the proceedings before him. It has further been argued that only 9 tenants, six of whom are appellants before us, applied for the fixation of standard rent on July 30, 1948. Therefore the Rent Controller had no jurisdiction to fix the standard rent in respect of persons who had not applied for such fixation. It has been contended before us that in six of the appeals before us (viz. Civil Appeals Nos. 176, 178, 181, 182, 183 and 184 of 1958) the appellants had made no application for fixation of standard rent.14. We take up first the question of vacant shops. It is clear from S. 7A and the provisions of Sch. IV that the Rent Controller has to fix the standard rent of newly constructed "premises" if the condition stated in para. 2 of Sch. IV is satisfied. The word "premises" as defined in S. 2 of the Act means "any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose etc." Each shop let out or intended to be let out separately is therefore "premises within the meaning of the Control Act, 1947. It may, therefore, be correct to say that it was not necessary for the Rent Controller to fix the standard rent for vacant shops. It is obvious, however, that for shops which had been let out to tenants the Rent Controller had to take into consideration the cost of the entire building, value of the land, the fittings etc. In other words he had to take the entire building into consideration for the purpose of fixing the standard rent of the shops in the building let out to various tenants. That being the position, we do not consider that the proceedings before the Rent Controller were rendered abortive merely because the Rent Controller also fixed the standard rent for some of the vacant shops. For the purpose of these appeals, the standard rent fixed for the vacant shops may well be ignored : that will not affect the rent fixed for the shops which had been let out to tenants.15. As to the point that some of the appellants had made no application for fixation of standard rent, we are unable to accept the contention as correct. It is indeed true that 9 tenants had made an application for fixation of standard rent on July 30, 1948, but it appears that there were other applications also from other tenants. This is clear from the office note, to which we have already referred earlier, appended to the application of 9 tenants. Moreover the application which the landlord himself had made on September 1, 1948 showed that 14 tenants had made applications for the fixation of standard rent of their shops in Chemists Market in Bhagirath Colony. Unfortunately, all the applications have not been printed in the paper book. The order of the Rent Controller shows that he treated all the applications as though they gave rise to a single proceeding, because they related to the same building. This point which has now been taken before us does not appear to have been taken before the District Judge who said that there were 19 appeals before him arising out of a single order of the Rent Controller fixing rent for 18 different shops of a building belonging to the landlord. In the calculation sheets which the Rent Controller and the learned District Judge had prepared and which give the names of all the tenants the standard rent for whose shops was fixed, are shown the names of all the appellants. It is, we think, too late in the day for the landlord to contend that some of the appellants had not applied for the fixation of standard rent. In any view of the matter, the landlord has not placed sufficient materials before us in support of that contention. We may point out here that M/s. Narang Medicine Co., appellant in Civil Appeal No. 182 of 1958, did not join in the application made on July 30, 1948. Yet we find from the record that a copy of the letter which the Rent Controller wrote to the landlord on November 9, 1948, was sent to M/s. Narang Medicine Co. As we have earlier pointer out the very petition of the landlord dated September 1,1948, shows that many were than 9 tenants had applied for fixation of standard rent for their shops in Chemists Market, Bhagirath Colony. Therefore, we are unable to uphold the contention of the landlord that the Rent Controller had fixed the standard rent of some of the shops tenants whereof had not applied for the fixation of the standard rent.

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

Explanation:
1[ds]We agree with these observations of the Full Bench, and we further accept the view expressed by it that the criteria for the fixation of standard rent for both new and old buildings under the Control Act, 1947 are not substantially different. The minor differences that exist in the matter, which have been adverted to in the judgment of the High Court, can be justified on the grounds of (a) difference in the cost of construction of old and new buildings, (b) difference in the rate of return on investments made in building houses before and after 1947, (c) the need to encourage the building of houses to meet the acute shortage of accommodation in Delhi after 1947, and (d) the opportunity presented of charging excessive rent after 1947. Perhaps, it is also necessary to emphasise again that the provisions in Schedule IV of the Control Act, 1947 do not give an arbitrary power to the Rent Controller, paragraph 8 of the Schedule requires the Rent Controller to state in writing his reasons for fixing the standard rent. Paragraph 4 states that in fixing the standard rent, the Rent Controller shall take into consideration all the circumstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition to rent. Paragraph 7 gives the Rent Controller power to require the landlord to produce any book of account, document or other information relating to the newly constructed premises, to enter and inspect such premises after due notice, and to authorise any officer subordinate to him to enter and inspect any such premises after due notice. Paragraph it provides, for an appeal to the District Judge any person aggrieved by an order of the Rent Controller. These provisions clearly indicate that the power given to the Rent Controller is not an arbitrary power. The power has to be exercised by the Rent Controller on a judicial consideration of all the circumstances of the case. We think that the High Court was in error in the view it expressed that no reasonable procedure is prescribed by the provisions of Sch. IV and the Rent Controller is at liberty to do whatever heanybody is to blame for the ex parte order of the Rent Controller, it is the landlord himself. It appears from the order of the Rent Controller that the attorney or advocate of the landlord did appear on several dates and even made a statement as to the letting out of the building in question, but too no other part in the proceedings except asking repeatedly for adjournment. The Rent Controller was not far wrong when he said that the landlord was bent upon avoiding a trial of the issue before the Rent Controller on the ground that he had made applications under S. 7 to the Subordinate Judge, Delhi, for fixation of standard rent. In view of the recalcitrant attitude which the landlord adopted the Rent Controller did his best in the circumstances. He took into consideration such relevant circumstances as the cost of the land, cost of construction, cost of fittings, the open area in front of the shops, cost of repairs etc. The learned District Judge also took into consideration the return which the landlord could reasonably expect on his outlay and also the rent of other premises in the area. Taking these additional circumstances into consideration, the District judge doubled the standard rent which the Rent Controller had fixed. It does not appear from the order of the learned District Judge that any objection was pressed before him on the ground that in the actual proceedings before the Rent Controller there was a violation of the principles of natural, justice, though in paragraph 7 of the grounds of appeal it was stated that the procedure adopted by the Rent Controller was contrary to the provisions of law etc. Such a ground appears to have been seriously pressed for the first time in the revision applications to the High Court.11. Some grievance has been made before us of the circumstance that in his letter dated December 3, 1948 the Rent Controller said that he would inspect the building on December 5, 1948. He, however, actually inspected the building on December 12, 1948 as his order shows. Our attention has been drawn to paragraph 7(b) of Sch. IV and it has been contended that the inspection was made without notice to the landlord. This, it is stated, has vitiated the entire proceedings. This argument might have had some force; but for the attitude adopted throughout the proceedings by the landlord. On the very date on which the Rent Controller intimated to the landlord that he would visit the building on December 5, 1948, the landlord sent a telegram purporting to be on his behalf stating that he was out of station. The Rent Controller then noted an order on that very date stating that the advocate for the landlord gave an application for staying the proceedings. This application was rightly refused by the Rent Controller. In these circumstances we do not think that the landlord can make any complaint that the inspection was without notice or that he had no opportunity of being present at the time of the inspection. It is obvious that from the very, beginning the landlord had taken up an attitude of non-cooperation in the proceedings before the Rentthe cases before us the tenants had stated the reasons, which were common to all, why they had to submit to excessive and exhorbitant rate of rent charged by the landlord. It was, we think, open to the Rent Controller to accept those reasons as prima facie good reasons for proceeding to make an enquiry to fix the standard rent and in that enquiry it was open to the Rent Controller to give the necessary finding that the rent charged by the landlord was excessive. The final order of the Rent Controller shows without doubt that he was satisfied that the rent charged by the landlord was exho bitant and excessive. We are unable to hold that in these circumstances there has been any contravention of para. 2 of Sch. IV of the Control Act,is clear from S. 7A and the provisions of Sch. IV that the Rent Controller has to fix the standard rent of newly constructed "premises" if the condition stated in para. 2 of Sch. IV is satisfied. The word "premises" as defined in S. 2 of the Act means "any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose etc." Each shop let out or intended to be let out separately is therefore "premises within the meaning of the Control Act, 1947. It may, therefore, be correct to say that it was not necessary for the Rent Controller to fix the standard rent for vacant shops. It is obvious, however, that for shops which had been let out to tenants the Rent Controller had to take into consideration the cost of the entire building, value of the land, the fittings etc. In other words he had to take the entire building into consideration for the purpose of fixing the standard rent of the shops in the building let out to various tenants. That being the position, we do not consider that the proceedings before the Rent Controller were rendered abortive merely because the Rent Controller also fixed the standard rent for some of the vacant shops. For the purpose of these appeals, the standard rent fixed for the vacant shops may well be ignored : that will not affect the rent fixed for the shops which had been let out tois, we think, too late in the day for the landlord to contend that some of the appellants had not applied for the fixation of standard rent. In any view of the matter, the landlord has not placed sufficient materials before us in support of that contention. We may point out here that M/s. Narang Medicine Co., appellant in Civil Appeal No. 182 of 1958, did not join in the application made on July 30, 1948. Yet we find from the record that a copy of the letter which the Rent Controller wrote to the landlord on November 9, 1948, was sent to M/s. Narang Medicine Co. As we have earlier pointer out the very petition of the landlord dated September 1,1948, shows that many were than 9 tenants had applied for fixation of standard rent for their shops in Chemists Market, Bhagirath Colony. Therefore, we are unable to uphold the contention of the landlord that the Rent Controller had fixed the standard rent of some of the shops tenants whereof had not applied for the fixation of the standardthe Rent Controller had wrongly decided the fact and assumed jurisdiction where he had none, the matter would be open to reconsideration in revision. The High Court did not, however, go into the evidence, nor did it say that the finding was not justified by the evidence on record. The High Court referred merely to certain submissions made on behalf of the landlord and then expressed the opinion that what was done to the second floor was mere improvement and not a new construction. We think that the High Court was in error in interfering with the finding of fact by the Rent Controller and the District Judge, in support of which finding there was clear and abundant evidence which had been carefully considered and accepted by both the Rent Controller and the Districtconsider it unnecessary to determine the effect of the aforesaid saving clause in the present appeal. Neither the Rent Controller, nor the District judge, nor the High Court considered the effect of the saving clause. The application of the appellant was dismissed on the simple ground that S. 7A read with Sch. IV of the Control Act, 1947 was unconstitutional. We consider that that ground is not correct and the application of the tenant-appellant for fixation of standard rent trust now be determined in accordance with law. It would be for the competent authorities to consider now the effect of S. 46 ofthe Delhi and Ajmer Rent Control Act, 1952 or of any other law bearing on the question which may have come into existence since then.