Jose v. K.W. Joseph and Eliyakutty Trust (RCRev. Nos. 274 & 292 of 2014)

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE K.HARILAL** **&** **THE HONOURABLE MRS. JUSTICE ANNIE JOHN** **MONDAY, THE 6TH DAY OF AUGUST 2018 / 15TH SRAVANA, 1940** **RCRev..No. 274 of 2014** **AGAINST THE JUDGMENT DATED 05.06.2014 IN RCA NO.96/2010 of RENT CONTROL APPELLATE AUTHORITY,THRISSUR AGAINST THE ORDER DATED 27.11.2010 IN RCP 99/2005 of RENT CONTROL COURT,THRISSUR** ## **PETITIONER/APPELLANT/RESPONDENT:-** **---------------------------------** **JOSE,** **S/O. DEVASSY, ELUVATHINGAL HOUSE, MISSION QUARTERS, CHEMBUKAVU VILLAGE, THRISSUR DISTRICT.** **BY ADVS.SRI.MATHEW JOHN (K) SRI.DOMSON J.VATTAKUZHY** ## **RESPONDENTS/RESPONDENTS/PETITIONERS:-** **--------------------------------------** **1. K.W. JOSEPH AND ELIYAKUTTY TRUST, REPRESENTED BY ITS EXECUTORS PAUL JOSEPH, ENCOURAGE AVENUE ROAD, MUNDUPALAM, THRISSUR.** **2. K.W.JOSEPHAND ELIYAKUTTY TRUST, REPRESENTED BY ITS EXECUTORS, K.J. KOCHUPAVU @ JOSEPH, KATTUKARAN HOUSE, CO-OPERATIVE ROAD, CHEMBUKAVU, THRISSUR.** **R1-R2 BY ADVS. SRI.P.VISWANATHAN** **THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 06-08-2018, ALONG WITH R.C.R. NO.292 OF 2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **DST** ## **K. HARILAL & ANNIE JOHN,JJ.** **= = = = = = = = = = = = = = = = =** **R.C.R.Nos.274 & 292 of 2014** **- - - - - - -- - - - - - - - - - - - - -** _Dated this the 6[th] day of August, 2018_ ## **O R D E R** ## **K. Harilal, J.** These revision petitions are filed by the tenant and landlord respectively. Since the revisions are directed against one and the same judgment, both revisions are heard together and disposed of accordingly. The parties are referred to as in the Rent Control Petition. 2. The Petitioners/landlords filed R.C.P. No.99 of 2005 before the Rent Control Court, Thrissur under Section 5(1) of the Kerala Buildings (Lease & Rent Control) Act, 1965 _(hereinafter referred to as 'the Act'),_ seeking an order fixing the fair rent of the petition schedule building. According to them, the tenancy has commenced in the ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 2 :-** year 1973 and the rate of rent at that time was `175/-. Subsequently, the rent was enhanced to `300/- and at the time of filing of the rent control petition, `300/- was the rent. The petition schedule building has a carpet area of 653 sq.ft. and it would fetch rent at the rate of `50/- per sq.ft. Hence, the petitioners sought for enhancing of rent to `15,000/- per month. 3. According to the petitioners, the petition schedule building is situated in the most commercially important area of Thrissur Corporation and the building is facing towards Swaraj road, very near to the famous temple by name Paramekkavu temple. The area is a business hub of gold and textile business. Therefore, the petitioners are entitled to get the rent enhanced in accordance with the prevailing rate of rent of similarly situated ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 3 :-** buildings in that locality. So also, the rent has to be enhanced, in view of the inflation and resultant reduction in the purchasing power of money and variation in the living index etc. 4. The respondent resisted the said claim for enhancement, contending that `300/- is the fair rent and it does not require enhancement. According to the tenant, the petition schedule building does not have advantages, benefits and convenience as that of the similarly situated buildings in the locality. The petition schedule building is a very old building, having tiled roof. The petition schedule building is not situated in a commercially important locality, as claimed by the petitioners. According to him, the petition schedule building is not having an area of 653 sd.ft. and actual area is less than 653 sq.ft. Thus, the present rate of rent does not **R.C.R. Nos.274 & 292 of 2014** ## **-: 4 :-** require any enhancement, warranting interference under Section 5(1) of the Act. 5. On the aforesaid rival pleas, both parties adduced evidence. After considering the evidence on record, the Rent Control Court enhanced and fixed the rent at the rate of `9,800/- to be paid with effect from 01.07.2005 and at the rate of `16,330/with effect from 01.07.2010. It was also ordered that the said monthly rent shall be automatically enhanced in every five years by 30% of the monthly rent payable during the preceding period and next date of enhancement was fixed as 01.07.2015. The rent was fixed for an area of 653 sq.ft. 6. Aggrieved by the fixation of rent, both petitioners and respondent preferred appeals before the Rent Control Appellate Authority as R.C.A. Nos. 96 of 2010 and 80 of 2011 respectively. After re- ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 5 :-** appreciating the evidence on record, the Appellate Authority enhanced the rent and re-fixed the fair rent at `9,000/- from 01.07.2005 till 01.07.2010 and `13,000/- per month from 01.07.2010 onwards. That apart, the rent has to be enhanced periodically at the rate of 30% of the monthly rent payable every five year period and next date of enhancement shall be on 01.07.2015. The aforesaid rent was re-fixed taking the area of petition schedule building as 436.5 sq.ft., including the pillar area. The legality and correctness of the fair rent fixed by the Appellate Authority, are challenged by both landlords and tenant in these revision petitions. 7. Heard the learned counsel for the revision petitioner in R.C.R. No.274 of 2014 and the revision petitioners in R.C.R. No.292 of 2014. 8. Going by the impugned judgment passed by **R.C.R. Nos.274 & 292 of 2014** ## **-: 6 :-** the Appellate Authority, it could be seen that there was a dispute with respect to the area of the petition schedule shop room. But, the Rent Control Court has not settled the said issue and in Appeal, the said dispute, centered around the area of petition schedule shop room, was settled by taking a commission at the instance of the respondent and the commissioner has reported that the area of the petition schedule shop room, including the pillars is only 436.5 sq.ft. and the Appellate Authority has accepted the commission report and fixed the area of petition schedule building as 436.5 sq.ft. The Rent Control Court has fixed the fair rent taking 653 sq.ft. as area of the petition schedule building and it appears that, the Rent Control Court fixed the fair rent at the rate of `24.96 and rounded to `25/per sq.ft. But, the Appellate Authority has taken ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 7 :-** 436.5 sq.ft. as the area of the building and rent was fixed at the rate of `30/- per sq.ft. Therefore, the question to be considered is, whether there is any illegality or impropriety in the findings, whereby the Appellate Authority enhanced the rent and fixed at `30/- per sq.ft. from `25/per sq.ft.? So also, whether there is any illegality in granting periodical enhancement to the rent at 30% for every five year. 9. In order to prove the claim for enhancement of rent, PWs.1 to 3 were examined and Exts.A1 to A5 were produced and marked in evidence. PW.1 is one of the trustees of the landlords and he has given evidence in tune with the averments in the Rent Control Petition. PW.2 is the Assistant Manager(Estate), Paramekkavu Devaswam and he was examined to prove the prevailing rate of rent ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 8 :-** existing in that area with respect to the building owned by Paramekkavu Devaswam. He has testified the rate of rent of various buildings owned and rented out by the said Devaswam to different tenants. It has come out in evidence that the first floor of one of the buildings was rented out to Dhanalakshmi Bank for rent at the rate of `25.96 per sq.ft. and that building is also an old and renovated building. It is not disputed that the petition schedule building is situated very near to the building owned by Paramekkavu Devaswam and occupied by Dhanalakshmi Bank. PW.3 is the Manager of one Dharmodhayam Kuri Company. He was examined to prove that several buildings owned by Dharmodhayam Kuri Company are situated very near to the petition schedule building and those buildings are rented out to various tenants for a rent ranging from `56/- to `76/- per ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 9 :-** sq.ft. 10. It has come out in evidence that the building owned by Dharmodhayam Kuri Company and occupied by State Bank of India was rented out with a rent at the rate of `76/- per sq.ft. The total area having an extent of 12000 sq.ft. was rented out to the State Bank of India for a rent of `2,09,889/-. Admittedly, the said building is also an old tiled building, which came into existence before 1940. PW.3 has produced a statement, evidencing the rate of rent fixed for various buildings owned by Dharmodhayam Kuri Company. Thus, the petitioners/landlords have succeeded to prove that the rate of rent prevailing in that area is ranging from `56/- to `76/- per sq.ft. It is not disputed that the petition schedule building is situated in the heart of Thrissur city very near to ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 10 :-** the famous temple known as Paramekkavu temple. By the examination of PWs.1 and 2, it has come out in evidence that so many jewelleries and textile shops are situated very near to the petition schedule building. The respondent has not seriously challenged the importance of the locality. That apart, the petitioners have produced Ext.A5, which would show the variation in the money value caused by inflation from 1952 onwards. 11. It is to be remembered that in _**Edger Ferus v. Abraham Ittiyera**_ [2004(1) KLT 767 DB], this Court held that the inflation and resultant reduction in the purchasing power of money and variation in the living index have to be taken into consideration, while fixing the fair rent. 12. On the other hand, the power of attorney holder of the respondent was examined as RW.1. On ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 11 :-** an overall evaluation of the oral evidence of RW.1, it could be seen that he was not aware of the rate of rent prevailing in the locality or the market price of the property situated in that locality. We are of the opinion that, no purpose was served by the examination of RW.1. In view of the evidence adduced by the petitioners, it can be safely concluded that the petitioners have succeeded to prove that the rate of rent prevailing in the locality is `56/- to `76/- per sq.ft. 13. In the instant case, the Appellate Authority re-fixed the fair rent at the rate of `13,000/- per month from 01.07.2010. In other words, the fair rent is re-fixed at `30/- per sq.ft.. When comparing with the prevailing rent proved by the petitioners, the rate of rent fixed by the Appellate Authority is just and fair, warranting ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 12 :-** no interference in revisional jurisdiction. We do not find any illegality or impropriety in the methodology adopted by the Appellate Authority, in fixing the fair rent. 14. R.C.R. No.292 of 2014 has been filed on the ground that the rent enhanced and re-fixed by the Appellate Authority is also inadequate, in view of the prevailing rate of rent in the locality. But, we find that there is no material evidence to show that the rate of rent is more than `56 to `76 in that locality. It has come out in evidence that the petition schedule building is not exactly similar to the building having rent at the rate of `56/- to `76/-. The petition schedule building is older than those buildings and having no similar amenities. Therefore, the Appellate Authority is justified in fixing the fair rent as `30/- per **R.C.R. Nos.274 & 292 of 2014** ## **-: 13 :-** sq.ft. after balancing the advantages and disadvantages of the petition schedule building and the aforesaid buildings. We do not find any reason to enhance the rent further. 15. Coming to the periodical enhancement, we find that the Appellate Authority has fixed periodical enhancement at 30% of the monthly rent for every five year period. But, in _**Mohammad Ahma v. Atma Ram Chauhan**_ [2011(2) KLT SN 98], the Supreme Court has laid down certain guidelines for the periodical enhancement of rent. Going by the guidelines, it is seen that the tenant must enhance the rent according to the terms of agreement at least by 10%, after every three years and enhanced rent should then be made payable to the landlord. In view of the guidelines issued by the Supreme Court, we find that the periodical enhancement at ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 14 :-** the rate of 30% for every five year period is unreasonable, warranting interference of this Court in revisional jurisdiction. Therefore, the rate of periodical enhancement will stand reduced and modified from 30% to 12% of the monthly rent payable, for every three year period. Thus, we do not find any reason to interfere with the other findings of the Appellate Authority. 16. Therefore, R.C.R. No.274 of 2014 will stand allowed in part and R.C.R. No.292 of 2014 will stand dismissed. The learned counsel for the revision petitioners in R.C.R. No.274 of 2014 seeks sometime to pay arrears of rent. The learned counsel for the respondent submits that reasonable time alone can be granted. 17. Having regard to the facts and circumstances of the case, the revision petitioner ## **R.C.R. Nos.274 & 292 of 2014** ## **-: 15 :-** in R.C.R. No.274 of 2014 is given six months time from today to pay the entire arrears of rent provided that half of the entire arrears shall be paid within three months from today and entire remaining balance shall be paid within the next three months. In the event of failure, the time granted as above will stand automatically cancelled and the landlords will be at liberty to proceed with the realisation of the arrears of rent. 17. Hence, R.C.R. No.274 of 2014 will stand allowed in part and R.C.R. No.292 of 2014 will stand dismissed and all pending Interlocutory Applications will stand closed. Sd/- ## **K. HARILAL, JUDGE** Sd/- ## **ANNIE JOHN, JUDGE** DST //True copy// P.A. To Judge