M/S. AMBAKUZHY TRADE CENTRE, KOTTAYAM v. STATE BANK OF TRAVANCORE

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** ## **&** **THE HONOURABLE MR.JUSTICE T.V.ANILKUMAR** **THURSDAY, THE 29TH DAY OF AUGUST 2019 / 7TH BHADRA, 1941** ## **RCRev..No.67 OF 2018** **AGAINST THE JUDGMENT IN RCA 50/2013 DATED 19-12-2017 OF ADDITIONAL RENT CONTROL APPELLATE AUTHORITY,KOTTAYAM** **AGAINST THE ORDER IN RCOP 38/2012 DATED 31-07-2013 OF ADDITIONAL RENT CONTROLLER, KOTTAYAM** ## **REVISION PETITIONER/PETITIONER/PETITIONER:** **M/S. AMBAKUZHY TRADE CENTRE KOTTAYAM REPRESENTED BY MANAGING PARTNER, BOBBY ABRAHAM, AGED 38, S/O. KURIAN ABRAHAM, AMBAKUZHIYIL HOUSE, CHENGALAM SOUTH.P.O. KOTTAYAM.** **BY ADVS. SRI.C.S.MANILAL SRI.S.NIDHEESH** ## **RESPONDENT/RESPONDENT/COUNTER PETITIONER:** **STATE BANK OF TRAVANCORE, THIRUVANANTHAPURAM THIRUVANANTHAPURAM, (NOW RENAMED AS STATE BANK OF INDIA),REPRESENTED BY ITS BRANCH MANAGER,THIRUVARPPU BRANCH, THRIUVARPPU.P.O., KOTTAYAM.** **BY ADV. SRI.T.SETHUMADHAVAN (SR.) BY SRI. JAYESH MOHAN KUMAR, SC, STATE BANK OF TRAVANCORE BY ADV. SMT.N.DEEPA BY ADV. SMT.PREETHI. P.V. BY ADV. SRI.M.V.BALAGOPAL** **THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 29.08.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **R.C.R.No.67 of 2018** ## **:-2-:** ## **A.HARIPRASAD & T.V.ANILKUMAR, JJ. --------------------------------R.C.R.No.67 of 2018 ---------------------------------Dated this the 29[th] day of August, 2019** ## **O R D E R** ## **A.HARIPRASAD, J.** Heard Sri.C.S.Manilal, the learned counsel for the petitioner and Sri.T.Sethu Madhavan, the learned Senior Counsel appearing for the respondent Bank. 2. The orders impugned in this case are the concurrent findings of the Rent Control Court and the appellate authority that the revision petitioner, who is the landlord of the building in which the Bank runs its Branch, is not entitled to fixation of fair rent under Section 5 of the Kerala Buildings (Lease and Rent Control) Act, 1965 (in short, 'the Act'). According to the authorities below, since Ext.A2 agreement dated 31.7.2007 ## **R.C.R.No.67 of 2018** ## **:-3-:** contains a provision for enhancement of rent at the rate of 20% every 5 years, the landlord is legally not entitled to claim enhancement by invoking Section 5 of the Act. 3. Shown off unnecessary details, the bare minimum facts necessary for disposal of the case are as follows; The petitioner is the owner of the petition schedule building wherein the respondent Bank is running its Branch at Thiruvarppu. Ext.A2 is the agreement evidencing the jural relationship between the parties. Admittedly, the building is situated in an area to which the Act was made applicable. Even though Ext.A2 is styled as a 'leave and licence agreement', on a perusal of the terms and conditions in Ext.A2, we are of the view that it is an agreement of lease creating a landlord-tenant relationship between the parties. The rent fixed at ## **R.C.R.No.67 of 2018** ## **:-4-:** the time of letting out on 31.7.2007 was Rs.7.2 per sq.ft. and the building let out is having an area of 2,850 sq.ft. So, according to the terms in Ext.A2, the rent payable at the time of creation of tenancy was Rs.18,468/- per month. In Ext.A2, a term of 10 years was fixed. Although the revision petitioner raised a contention that it requires registration as the lease arrangement is for more than one year, that contention is not sustainable for the tenancy created under the Act is only a statutory tenancy from month to month and even without registration of the lease agreement, the jural relationship between the parties could be well established. 4. The landlord/revision petitioner approached the Rent Control Court in the year 2012 with a petition under Section 5 of the Act seeking enhancement of the rent at the rate of Rs.30 per ## **R.C.R.No.67 of 2018** ## **:-5-:** sq.ft. In order to show that Rs.30/- was the reasonable market rent prevailing in the area in the year 2012, he produced Ext.A8. That document is another rental agreement between the same parties in respect of a small space in the ground floor of the very same building. It is seen from evidence that Ext.A8 pertains to an area wherein the Bank runs an ATM counter and the area is very small when compared to the petition schedule area. 5. The learned Senior Counsel for the respondent contended that Ext.A8 did not reflect the real market rent prevailing in the area when we consider the small area of building included in Ext.A8 and also the fact that it is in the ground floor. Admittedly, the petition schedule building is in the first floor. Therefore, we are of the view that Ext.A8 cannot be taken as a determinative evidence to fix the market rent of the building. ## **R.C.R.No.67 of 2018** ## **:-6-:** 6. It is seen from the judgment of the trial court as well as the appellate court that the authorities below are carried away by the fact that the parties have agreed as per Ext.A2 for enhancement of rent at the rate of 20% every 5 years. It is therefore reasoned out by the authorities that the landlord cannot invoke Section 5 of the Act for seeking fixation of fair rent as the parties are bound by the terms and conditions in Ext.A2 agreement. On this reasoning, the trial court dismissed the claim of the landlord under Section 5 of the Act. The appellate authority without stating any convincing reason, dismissed the appeal stating that the landlord has no case that Ext.A2 was vitiated by elements like coercion, undue influence, mistake of fact etc. and therefore the landlord is not entitled to get fixation of fair rent. ## **R.C.R.No.67 of 2018** ## **:-7-:** 7. We are of the considered opinion that the approach by the Rent Control Court as well as the appellate authority are legally incorrect. To support our view, we may place reliance on a Division Bench decision of this Court in **State Bank** **of India v. Prasanna Kumari & ors. (2019(2) KLJ** **624)** . An identical question was considered by this Court and held that the statutory right under Section 5 cannot be contracted out. Coincidentially, it can be seen that the petitioner in that case was the same Bank which now raises the contention in this case. In paragraph 9 of the judgment in **Prasanna Kumari's case (** _**supra**_ **)** , this Court held thus; “9. On a survey of various provisions under the Act, we find that there is no provision prohibiting institution of a rent control petition, where there is an agreement between the landlord and tenant for periodical enhancement of rent during the period of the ## **R.C.R.No.67 of 2018** ## **:-8-:** lease deed. On the other hand, we find that according to Section 11(9) of the Act, where the tenancy is for a specified period agreed upon between the landlord and the tenant, the landlord shall not be entitled to apply to the Rent Control Court for eviction of the tenant before the expiry of such period. In the above view, we are of the opinion that, the legislature was so conscious to omit such a bar against institution of rent control petition seeking fixation of fair rent even if there is an agreement between the landlord and the tenant fixing the rent with provision for periodical enhancement. The absence of such a statutory bar gives rise to an inference that the legislature has consciously permitted the landlord to approach the Rent Control Court to get the fair rent determined, notwithstanding the stipulation regarding periodical enhancement in the lease agreement. Therefore, it can be concluded that an agreement fixing the rent with periodical enhancement, at a specified rate, between the landlord and tenant, will not preclude the landlord from instituting a rent control petition invoking Section 5(1) of the Act, for fixation of fair rent.” ## **R.C.R.No.67 of 2018** ## **:-9-:** 8. Having regard to the facts and circumstances and the legal position laid down in **Prasanna Kumari's case (** _**supra**_ **)** , we are of the view that the authorities below egregiously went wrong in deciding the case against the landlord. It is made clear that we are not expressing any opinion regarding the market rent payable in respect of the building during the year 2012 in the absence of any reliable material. The fact that R.C.P.No.30 of 2018 was filed by the landlord against the respondents before the Rent Control Court, Kottayam, subsequent to this petition, will not stand in the way of the landlord claiming a fair rent in respect of the building as it prevailed in the year 2012. Therefore, we find that the impugned orders are legally unsustainable and hence we set them aside. In the result, the revision petition is allowed ## **R.C.R.No.67 of 2018** ## **:-10-:** and the impugned orders passed by the Additional Rent Control Court, Kottayam, in R.C.O.P.No.38 of 2012 and by the Additional Rent Control Appellate Authority-1, Kottayam, in R.C.A.No.50 of 2013, are hereby set aside. The matter is remitted back to the Rent Control Court for a fresh disposal in accordance with law. The parties shall appear before the Rent Control Court on **30.09.2019** . The Rent Control Court shall dispose of the case within a period of two months from the date of appearance. All pending interlocutory applications are closed. Sd/- **A.HARIPRASAD JUDGE** Sd/- **T.V.ANILKUMAR JUDGE** **==> picture [270 x 11] intentionally omitted <==** ami/