RCRev. Nos. 303 & 350 of 2016: Bindu Kuyyyalil v. C.M. Kumaran & C. Siju

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.HARILAL & THE HONOURABLE MRS. JUSTICE ANNIE JOHN TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 ## RCRev..No. 303 of 2016 AGAINST THE JUDGMENT IN RCA 63/2013 of RENT CONTROL APPELLATE AUTHORITY, VADAKARA DATED 15-01-2016 AGAINST THE ORDER IN RCP 76/2012 of RENT CONTROL MUNSIFF COURT, VADAKARA DATED 26-03-2013 ## REVISION PETITIONER/SECOND APPELLANT/SECOND PETITIONER: BINDU KUYYALIL, D/O. VISWANADHAN, AGED 43 YEARS, ADVOCATE, KUYYALIL HOUSE, VATAKARA AMSOM AND DESOM VATAKARA TALUK, KOZHIKODE DISTRICT. BY ADVS. SRI.U.K.DEVIDAS SRI.K.K.ANILRAJ ## RESPONDENT/RESPONDENT/RESPONDENT: C.M.KUMARAN S/O. ONAKKAN, AGED 52 YEARS, BUSINESS, EDACHERITHAZHAKUNI HOUSE, MANDARATHUR AMSOM DESOM, VATAKARA TALUK, KOZHIKODE DISTRICT-673 001. BY ADV. SRI.ZUBAIR PULIKKOOL THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH R.C. Rev..350/2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: R.C.R. Nos. 303 & 350 of 2016 -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR.JUSTICE K.HARILAL & THE HONOURABLE MRS. JUSTICE ANNIE JOHN TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 ## RCRev..No. 350 of 2016 AGAINST THE JUDGMENT DATED 15.01.2016 IN RCA 65/2013 of RENT CONTROL APPELLATE AUTHORITY, VADAKARA AGAINST THE ORDER DATED 26.03.2013 IN RCP 78/2012 of RENT CONTROL MUNSIFF COURT, VADAKARA ## REVISION PETITIONER/SECOND APPELLANT/SECOND PETITIONER: BINDU KUYYALIL D/O.VISWANATHAN, AGED 43 YEARS, ADVOCATE, KUYYALIL HOUSE, VATAKARA AMSOM AND DESOM, VATAKARA TALUK, KOZHIKODE DISTRICT BY ADVS. SRI.U.K.DEVIDAS SRI.K.K.ANILRAJ ## RESPONDENT/RESPONDENT/RESPONDENT: C. SIJU S/O.KUNHAN GURUKKAL, AGED 37 YEARS, ADVOCATE CLERK, CHEROKKARA HOUSE, CHORODE AMSOM, ERAPURAM DESOM, VATAKARA TALUK, KOZHIKODE DISITRCT 673 001 BY ADV. SRI.ZUBAIR PULIKKOOL THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH RCRev..303/2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: R.C.R. Nos. 303 & 350 of 2016 -3- ## K. Harilal,J. Since these Rent Control Revision Petitions are directed against a common judgment passed by the Rent Control Appellate Authority, both these Revision Petitions are heard together and disposed of accordingly. 2. The revision petitioners in both the Rent Control Revisions are one and the same. He is the landlord, who filed R.C.P. Nos. 76 and 78 of 2012 before the Rent Control Court, Vatakara seeking an order enhancing and fixing the fair rent of the petition schedule shop rooms in the aforesaid Rent Control Petitions. The respondent in R.C.R No. 303 of 2016 is the tenant in R.C.P. No. 76 of 2012 and the respondent in R.C.R. No. 350 of 2016 is the tenant in R.C.P. No. 78 of 2012. The parties are referred to as in the Rent Control Petitions. 3. According to the averments in the Rent Control Petitions, the petition schedule shop room in R.C.P. No. 76 of 2012 was rented out to the respondent therein as per the registered lease deed dated 18.04.2007 and as per the said lease deed, the rent was fixed at Rs.1000/-. Similarly, in R.C.P No. 78 of 2012, the petition schedule shop room was let out to the respondent therein as per lease deed No. 19.11.2002 and as per the said lease deed, the rent was fixed at R.C.R. Nos. 303 & 350 of 2016 -4- Rs.1000/-. The shop room was entrusted to the respondent in the year 2007. Thereafter, five years have been elapsed. During the course of five years, the cost of living, value of essential commodities, construction costs etc. are increased more than 300%. The petitioner has invested huge amounts to construct the shop rooms. The shop room is lying in a most important locality. Within the span of two years, there is a tremendous development in the locality where the shop room is situated. Three new tar roads connecting the roads abutting the shop rooms have come into existence. Likewise, new hotels, Passport Seva Office, new furniture showrooms, a branch of ICICI Bank, Honda showroom and other commercial establishments have come into existence within the locality, within a span of two years. But the prevailing rent of the petition schedule shop rooms are very low when comparing with the rent of the other similarly situated building in the same locality. Though, he has caused to issue lawyer notice demanding the enhanced rent at the rate of 6000/- per month, the respondents did not heed to the said demand. Therefore, the respondents are liable to pay rent at the enhanced rate of Rs.6000/per month from 01.08.2012 onwards. 4. The respondents resisted the claim for enhancement contending that the rent deed contains a specific provision for R.C.R. Nos. 303 & 350 of 2016 -5- enhancement of rent by 10% every three years and since the provision has been implemented, the petitioner is not entitled to make any claim for enhancement of the rent contrary to the said provision. The petition, therefore, is not maintainable. Though five years have elapsed after the entrustment, only 5 months have elapsed after the last enhancement. The building in question is more than 25 years old and the petitioner has not carried out any maintenance work, since the inception of the lease. The building does not have sufficient parking facility or other amenities including toilet etc and there is no water connection in the building. The averment that the prevailing rent of the similarly situated other buildings in the locality is very high, is not true and correct. The claim for enhancement of rent to Rs.6000/- per month is exorbitant and not commensurate with the prevailing market rate of the rent of the building situated in similar situation, location, convenience and amenities. With the aforesaid averments, the respondents prayed for the dismissal of the Rent Control Petitions. 5. On the rival pleadings, both parties adduced evidence and after considering the evidence on record, the Rent Control Court enhanced the rent to Rs.1925/- in R.C.P. No. 76 of 2012 and Rs.2500/- in R.C.P. No. 78 of 2012. Aggrieved by the inadequacy in R.C.R. Nos. 303 & 350 of 2016 -6- the quantum of rent, the petitioner preferred R.C.A. Nos. 63 and 65 of 2013 respectively before the Rent Control Appellate Authority. In R.C.A. No. 65 of 2013, the respondent filed a cross objection. However, after considering the rival pleas, the appellate authority concurred with the findings of the Rent Control Court in both the Rent Control Appeals and dismissed the appeals and the cross objection, by the impugned common judgment. The legality and propriety of the concurrent findings, whereby the courts below fixed the fair rent of the petition schedule building are assailed in these revision petitions. 6. Heard the learned counsel for the revision petitioner and the learned counsel for the respondents. 7. The learned counsel for the revision petitioner contended that the courts below have went wrong by omitting to consider the prevailing rent of the similarly situated building in the same locality for the determination of the fair rent of the petition schedule shop rooms. 8. The learned counsel drew our attention to Exts.X1 and X2 and submitted that Exts. X1 and X2 would prove that the prevailing rent of the similarly situated building in the locality is Rs.27 per sq. feet and Rs.16 per sq. feet respectively. But the courts below concurrently fixed the fair rent of the petition schedule shop room in R.C.P. No. 76 of 2012 at the rate of Rs.10.63% and in R.C.P. No. 78 of R.C.R. Nos. 303 & 350 of 2016 -7- 2012 at the rate of Rs.13.81. It is further contended that in the impugned judgment, the courts below found that the petition schedule shop rooms are situated in a commercially important locality having proximity with public office, shops, show rooms etc. So also, the court below accepted the development in the locality within two years. But those aspects were not considered while determining the fair rent of the petition schedule shop room. 9. On the other hand, the learned counsel for the respondents submits that the Rent Control Petitions itself are not maintainable when there is a specific clause in the Rent Deed for the enhancement of the rent periodically and the parties are agreed to the periodical enhancement of rent. In the lease deed itself, there cannot be a further enhancement, in supersession of the said clause, invoking Section 5 of the Kerala Buildings Lease and Rent Control Act ('the Act' for short). 10. The learned counsel invited our attention to the clause in the rent deed whereby a periodical enhancement of 10% by every three years is permitted. Thus, the specific clause providing enhancement of rent periodically would preclude the petitioner from filing the Rent Control Petitions under Section 5 of the Act. It is further contended that the averments in both the Rent Control R.C.R. Nos. 303 & 350 of 2016 -8- Petitions lack requirement for fair rent. As per the clause in the rent deed for periodical enhancement, the respondent in R.C.P. No. 76 of 2012 has paid enhanced rent at the rate of Rs.1210/- with effect from 2009 onwards, i.e., during the pendency of the Rent Control Petition. So, the petitioners in R.C.P No. 76 of 2012 is further precluded from seeking fixation of fair rent by the Rent Control Court, after the acceptance of the enhanced rent from 2009 onwards. In order to substantiate the said contention, the learned counsel has placed reliance on _**Rajesh R. Kartha v. K.A. Ismail**_[1] and _**Mohammad Ahmad v. Atma Ram Chauhan**_[2] . It is also contended that in _Mohammad Ahmad_ , the court has evolved a specific formula for enhancing the rate of rent invariably in all cases, notwithstanding the other evidence establishing the prevailing rent in the locality and the court cannot go beyond the formula propounded by the Supreme Court in the aforesaid decision. According to the learned counsel, there cannot be any enhancement of more than 10% after every three years invariably in all cases. 11. In view of the arguments at the Bar, the first question to be considered in these revision petitions is whether the Rent Control Petitions are maintainable when there is a clause in the Rent Deed for 1 2015(4) KHC 408 (DB) > 2 2011(2) KLT SN 98 (C. No. 120)SC R.C.R. Nos. 303 & 350 of 2016 -9- ## periodical enhancement of the rent by every three years. 12. We have meticulously gone through Exts.A1, A12 and A13 rent deeds and Ext.A1 is the rent deed in R.C.P. No. 65 of 2012 and Exts.A12 and A13 are the rent deeds in R.C.P No. 78 of 2012. Exts. A1 and A12 are registered rent deeds. Ext.A1 was executed with respect to the tenanted premises in R.C.A. No. 65 of 2012 on 19.11.2002. On a perusal of the aforesaid Rent Deeds, we find that though the rent deed is a registered Rent Deed, the term of the said rent deed is three months only. Further, in the aforesaid rent deed, it is stated that if the respondent continues to hold the petition schedule shop rooms after the expiry of the said three months, he is liable to pay the enhanced rent at the rate of Rs.10% by every three years and for that purpose a new lease deed would be executed and registered. The respondent has no case that as per the aforesaid clause, after the expiry of three months, he has executed a new registered lease deed in favour of the petitioners. Thus, we find that the legal validity of the said lease deed had expired on 18.07.2007. This Court has also held in _**Chandroth Vennalakath Irbahim and others v. M/s.Twinkle**_[1] that whether a lease deed is for a term not exceeding one year, there cannot be a further extension of the term of 1 2018(5) KHC 687 R.C.R. Nos. 303 & 350 of 2016 -10- lease for a period exceeding more than one year without the execution and registration of a fresh lease deed to that effect, in view of Section 107 of the Transfer of Property Act, Sections 17 and 49 of the Registration Act. To sum up, a self working clause enhancing the term of lease for a period exceeding one year in a lease deed is inoperative and unenforceable. 13. In the above view, we are of the opinion that the extension clause providing the periodical enhanced rent has become redundant in the absence of a new registered lease deed. Therefore, it cannot be said that there is a clause providing periodical enhancement of rent by every three years in the rent deeds of both the cases and thereby, the Rent Control Petitions are not maintainable. Further, we are of the opinion that even if there is an extension clause providing periodical enhancement of rent in rent deed, such a clause will not preclude the landlord from seeking enhancement of fixation of fair rent invoking Section 5 of the Act. In the absence of a specific bar, against institution of a Rent Control Petition, where there is a specific clause for enhancement of the rent in the lease deed, it cannot be held that the Rent Control Petitions are not maintainable or barred by the extension clause providing periodical enhancement in rent. In the above view, we find that the Rent Control Petitions were maintainable. R.C.R. Nos. 303 & 350 of 2016 -11- 14. Further, the points to be considered are what are the effect and impact of the decision laid down by the Supreme Court in the decision in _Mohammad Ahmad_ and whether the court below is justified in discarding the evidence disclosing the prevailing fair rent of the similarly situated building in the same locality, in view of the formula laid down by the Supreme Court in the said decision. 15. We have meticulously gone through the aforesaid decision and we find that what is propounded in the aforesaid decision is a general guidelines only and the guidelines do not preclude the landlord to adduce evidence to prove that the prevailing rent of the similarly situated building of the same locality is more than the existing rent. It is true that in the aforesaid decision, the Supreme Court held that the tenant must enhance the rent according to the terms of the agreement for at least 10%, after every three years and the enhanced rent should then be made payable to the landlord. We are of the opinion that in view of the aforesaid proposition, it cannot be held that no way the rent could be enhanced more than 10% after every three years. It is pertinent to note that the Supreme Court employed the term “at least 10%” in the aforesaid proposition. It goes to say that in the absence of any evidence to prove a higher enhanced rent, invariably in all cases, the tenant is entitled to get at least 10% after every three R.C.R. Nos. 303 & 350 of 2016 -12- years. In other words, it is the minimum rate of enhancement. If the evidence is available on record with respect to the prevailing rent of the similarly situated building, the Court can rely on such evidence and grant more enhancement than 10%. 16. The next question is whether there is any illegality or impropriety in the methodology adopted by the courts below in fixing the enhanced fair rent. As rightly contended by the learned counsel for the petitioner, going by the impugned judgment, it could be seen that the petitioner has produced Exts.X1 and X2 to prove that the rent of the similarly situated building in the same locality is more than the existing rent of the petition schedule building. Ext.X1 would show that it is a building where ICICI Bank is functioning. It is not disputed that the said building is situated very near to the petition schedule building. Ext.X1 is the copy of the rent agreement executed by the ICICI Bank to the landlord. As per Ext.X1, the building having an extent of 1583 sq. ft. was let out in the year 2011 to the said Bank for a monthly rent of Rs.42,741/-. In other words, the rent of the said building per sq. ft. is Rs.27. PW2 is the Manager of the said Bank and he was examined to prove Ext.X1. Nothing has been brought out to discredit the evidence and the courts below have relied on the evidence of PW2. The courts below have not disbelieved the evidence of PW2, though R.C.R. Nos. 303 & 350 of 2016 -13- the same was not discarded without any reasoning. Ext.X2 is the rent kachit executed by one Kaneesh Lalu to Renjith. The tenanted premises in Ext.X2 is another shop room in the building to which the petition schedule rooms form part. Therefore, we are of the opinion that Ext.X2 is a relevant document which can be taken as a basic document for fixing the fair rent of the petition schedule building also. The landlord of the tenanted premises in Ext.X2 was examined as PW3 and the courts below have not disbelieved the evidence of PW3 also, though his evidence was also discarded while determining the fair rent. According to Ext.X2, the building having an extent of 181 sq. ft. was let out for a monthly rent of Rs.3000/- to the tenant. It shows that the monthly rent of the said building per sq. ft is Rs.16.57. We do not find any reason to take a different view in the case of the petition schedule building when both the petition schedule shop rooms and the tenanted premises in Ext.X2 form part of the same building. In the above view, we are of the opinion that the respondents are also liable to pay Rs.3000/- per month to the tenant. The fair rent in Ext.X2 was fixed in the year 2011 and the Rent Control Petitions were filed in the year 2012, i.e, after one year. Therefore, the passage of one year also would be considered for fixation of the fair rent. 17. In the above view, the fair rent of the petition schedule R.C.R. Nos. 303 & 350 of 2016 -14- building in both the rent control petitions would stand fixed at the rate of Rs.17/- per sq. ft. It is not disputed that the area of both the buildings are 181 sq. ft. as per the Commission Report also. It is also made clear that it is the fair rent of the petition schedule building in the year 2012. These Rent Control Revisions are disposed of as above. sd/- **K. HARILAL, JUDGE.** **s** d/- **ANNIE JOHN, JUDGE.** _Rv_ R.C.R. Nos. 303 & 350 of 2016 -15-