T.J. Abraham, T.J. Mani and T.J. Thomas v. Sankara Pillai

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.HARILAL** **& THE HONOURABLE MR. JUSTICE K.P.JYOTHINDRANATH** **MONDAY, THE 10TH DAY OF JULY 2017/19TH ASHADHA, 1939** **RCRev..No. 35 of 2017 () -------------------------** **AGAINST THE JUDGMENT IN RCA 27/2014 OF RENT CONTROL APPELLATE AUTHORITY - V, KOTTAYAM R.C.P.NO.38/2011 BEFORE THE ADDITIONAL RENT CONTROL COURT, KOTTAYAM** ## **REVISION PETITIONERS/APPELLANTS/PETITIONERS:** **------------------------------------------------------------------** **1. T.J. ABRAHAM, AGED 58, S/O.MANI JOSHUA, THANNIKKAL HOUSE, COLLEGE ROAD, MUTTAMBALAM VILLAGE, KOTTAYAM** **2. T.J.MANI, AGED 69, S/O.MANI JOSHUA, THANNIKKAL HOUSE, COLLEGE ROAD, MUTTAMBALAM VILLAGE, KOTTAYAM** **3. T.J.THOMAS, AGED 64, S/O.S/O.MANI JOSHUA, THANNIKKAL HOUSE, COLLEGE ROAD, MUTTAMBALAM VILLAGE, KOTTAYAM** **BY ADVS.SRI.C.S.MANILAL SRI.S.NIDHEESH** ## **RESPONDENT/RESPONDENT/RESPONDENT:** **-----------------------------------------------** **SANKARA PILLAI, S/O.KRISHNA PILLAI, FRUITS & FRESH JUICE, DOOR NO.835/IX/KMC, PALA BUS STAND, MUTTAMBALAM VILLAGE, KOTTAYAM 686 575** **THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 10-07-2017 ALONG WITH R.C.R.NOS.36/17, 37/17, 38/17, 40/17, 42/17, 56/17, 60/17, 69/17, 71/17, 73/17, 78/17 AND 223/17, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **K.HARILAL & K.P.JYOTHINDRANATH, JJ.** - - - - - - - - - - - - - - - - - - - - - **R.C.R.Nos.35, 36, 37, 38, 40, 42, 56, 60, 69, 71, 73, 78 & 223 OF 2017** - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 10[th] day of July, 2017 ## **ORDER** ## Harilal, J. All these revision petitions are directed against the common judgment passed in R.C.A.No.26/2014 to R.C.A.Nos.32/2014 on the file of the Additional Rent Control Appellate Authority, Kottayam. Landlords and tenants are common. The above appeals were filed against the common judgment passed in R.C.P.No.18/2011 and six other connected Rent Control Petitions, filed against different tenants under the same Landlord. All the rent control petitions were filed under Section 5(1) of the Kerala Buildings ( Lease and Rent Control) Act, 1965 seeking fixation of fair rent, for the respective shop rooms, let out by the landlord, to different tenants, seven in number. In the aforesaid rent control petitions, the landlords prayed for fixing fair rent @ Rs.45/- per sq.ft.. After considering the objections filed by the R.C.R.Nos.35/2017 & connected cases 2 tenants, the rent control court fixed the fair rent @ Rs.8/- per sq.ft. for the buildings in R.C.P.Nos. 18, 39, 40 and 42 of 2011 and @ Rs.6/- for the buildings in R.C.P.Nos.38, 41 and 44 of 2011. Aggrieved by the inadequacy of the quantum of fair rent fixed by the rent control court, the landlords filed the aforesaid appeals. But the tenants have not preferred appeals and they accepted the verdict of the rent control court. In the appeal, the rent control appellate authority enhanced the quantum of rent fixed by the rent control court to Rs.20/- per sq.ft. and Rs.18/- per sq.ft. respectively. These revision petitions are filed by both landlords and tenants challenging the legality and propriety of the manner in which the Appellate Authority determined the fair rent, on different grounds, under different perspective. 2. According to the landlords, the court below has not considered Exts.A3, A7, X1 and X2 in its correct perspective. But according to the tenants, the rent refixed by the appellate authority is exorbitant and the appellate authority has not considered Exts.B1, B2, B3, B6 and B13 in its correct perspective. R.C.R.Nos.35/2017 & connected cases 3 3. Heard the learned counsel for the landlords and the learned counsel for the tenants. 4. The learned counsel for the landlords advanced arguments contending that the rent fixed by the appellate authority is not sufficient and the same is not in consonance with the prevailing rent in the locality and the locational and commercial importance of the locality, whereas the learned counsel for the tenants contended that the court below went wrong in discarding Ext.B1, B2, B6 and B13 which would show the prevailing rent in the locality. Further, it is contended that though, locality is not so important as contended by the landlords, the petition schedule buildings are very old and dilapidated and having no amenities and parking area, the Appellate Authority has not considered the above aspects in their correct perspective. 5. First of all, we must remind ourselves the scope and extent of the revisional jurisdiction under Section 20 of the Kerala Buildings ( Lease and Rent Control) Act. Revision is not an appeal in disguise. The scope and extent of jurisdiction is confined to legality, propriety R.C.R.Nos.35/2017 & connected cases 4 and regularity of the findings of the court below. This court is not inclined to reappreciate the entire evidence on record under revisional jurisdiction and arrive at a view other than the views of the courts below even if this court has a different view, unless the views of the courts below are perverse or based on wrong proposition of law. That apart, this court has limited jurisdiction to interfere with factual findings, where the courts below have not considered relevant evidence or placed reliance on irrelevant evidence or appreciation of the evidence is based on wrong proposition of law. Keeping the above view in our mind, we have considered the contentions raised by the landlords and tenants in these revision petitions. 6. The locational and commercial importance of the locality are not disputed. The petition schedule buildings are situated in the heart of Kottayam town. The landlords have pressed Exts.A1 to A7 and the tenants have pressed Exts.B1 to B13 into service. That apart, PW1 to PW5 and CPW1 to CPW 3 were examined and Exts.X1 and X2 were marked as third party exhibits. The documentary evidence R.C.R.Nos.35/2017 & connected cases 5 produced by both parties relates to different buildings situated within 100 – 150 metres from the petition schedule buildings. Indisputably, it has come out in evidence that rate of rent varies from Rs.8/- to Rs.72/per sq.ft. for different buildings situated within a radius of 100 – 150 metres. The rent control court fixed the fair rent at minimum as Rs.8/and Rs.6/- respectively and the Appellate Authority refixed the fair rent to Rs.20/- and Rs.18/- respectively. 7. The learned counsel for the landlords drew our attention to Ext.A1 to contend that it has come out in evidence that the building referred to in Ext.A1 is situated within the vicinity of 100 metres and the fair rent of that building is Rs.36.70 per sq.ft. It is further contended that the appellate court has fixed fair rent, about ½ of the fair rent of that building without any justification. Further it is contended that the appellate authority went wrong by discarding Exts.X1 and X2. The fair rent of the building covered under Exts.X1 and X2 is Rs.32.50 per sq.ft. and Rs.41/- per sq. ft. respectively and the said rent was fixed in the year 1990. In view of the quantum of rent fixed for the said R.C.R.Nos.35/2017 & connected cases 6 buildings in the year 1990, the appellate authority cannot be justified in fixing the fair rent @ Rs. 20/- and Rs.18/- per sq. ft. in the year 2011. 8. On the other hand, the learned counsel for the tenants submits that the appellate authority has failed to consider Exts.B1 and B13 rent deeds which would show fair rent @ Rs.8/- and Rs.5/- per sq. ft. for the buildings which are situated within 100 metres radius. Further, it is contended that fair rent @ Rs.8/- per sq.ft. was fixed in the year 2011 and the building is a terraced new building; whereas the petition schedule building is a very old one, which lacks amenities and parking area. It is further contended that fair rent of another building covered under Ext.B13 is Rs.5/- per sq. ft. only. But the same also was not considered while determining the fair rent of the petition schedule building. 9. Prima facie, we agree with the findings of the appellate authority that where the rent varies from Rs.8/- to Rs.72/- per sq.ft. the rent control court is not justified in fixing fair rent at Rs.8/-, the lowest rent only. Therefore, the appellate authority is justified in enhancing R.C.R.Nos.35/2017 & connected cases 7 the fair rent. It is pertinent to note that going by the impugned judgment passed by the appellate authority, the appellate authority observed that the tenants have fairly conceded that they are ready to pay the enhanced rent fixed by the rent control court. In the revision petitions filed by the landlords, their contention is that the appellate authority can never be justified in ignoring the evidenciary value of Exts.A1, X1 and X2. 10. The main point to be considered, at first, is whether there is any illegality or impropriety in discarding Exts.A1, X1 and X2 as such for the determination of fair rent of the petition schedule building. It has come out in evidence that the building referred to in Ext.A1 is having road frontage, on three sides of the building. From the schedule description of the shop room in Ext.A1, it is found that the property situates adjacent to east of M.C. Road, adjacent north of K.K.road and further adjacent to YMCA road at its east. But in the case of petition schedule building it is situated adjacent to M.C. Road and a private road. In view of the difference in road access, the R.C.R.Nos.35/2017 & connected cases 8 appellate authority found that though shop room in Ext.A1 situates in the very same locality, as that of the petition schedule building, the said shop room of PW5 situates in an area, which is more important than the area in which petition schedule building situates. In the above view, the appellate authority further found that the building covered under Ext.A1 has more commercial importance than the petition schedule building. Though, the distance between both the buildings is only less than 100 metres, for the aforesaid reason, Rs.36/- per sq. ft. fixed for the building in Ext.A1, cannot be fixed for the petition schedule building. We agree with the aforesaid reasoning of the appellate authority, based on difference in locational importance caused by more road access. But, we are unable to agree with the quantum of proportionate reduction made by the appellate authority, in comparison with Ext.A1. It appears that about ½ of the rent of the building referred to in Ext.A1 is fixed as fair rent of the petition schedule building and we do not agree with such an exorbitant extent of reduction in the quantum of rent. 9 R.C.R.Nos.35/2017 & connected cases 11. Coming to Exts.X1 and X2, fair rent of those buildings was fixed in the year 1990 @ Rs.32.50/- per sq. ft. and Rs.41/- per sq.ft. respectively. The fair rent of the petition schedule building has been fixed 21 years after the fixation of fair rent of the building referred to in Exts.X1 and X2. As regards Exts.X1 and X2, the appellate authority has discarded the said documents on finding that the building referred to in the above two documents are not so old as petition schedule building. We are of the opinion that merely on the reason that the petition schedule building is older than the building referred to in Exts.X1 and X2, the appellate authority cannot be justified in reducing the rent to Rs.18/- and Rs.20/- respectively. No way such huge amount could not have been deducted, considering the oldness of the building. Even though the building is an old one, the tenants have no case that the oldness of the building have adversely affected the prospects and development of their business. When the tenants were examined in evidence, they admitted that the petition schedule building is a tiled one with wooden ceiling. After appreciating the evidence of tenants with R.C.R.Nos.35/2017 & connected cases 10 respect to the conditions of the building, the courts below concurrently found that even though the building is an old one, the same has not adversely affected their business prospects. It appears the petition schedule building is an old fashioned building. But for the said reason only, the rent cannot be reduced considerably. In the above view also, the appellate authority is not justified in deducting Rs.12.50 and Rs.23/- per sq.ft. respectively from the rent of the building referred to in Exts.X1 and X2. 12. In the revision petitions filed by the tenants it is the case of the tenants, that the appellate authority went wrong in discarding Ext.B1, which would show fair rent @ Rs.8/- per sq. ft., for a modern terraced building which is situated very near to the petition schedule building. Going by the order passed by the rent control court and the judgment passed by the appellate authority, it could be seen that the court below have discarded the said document on the reason that the rent under Ext.B1 was fixed under an unholy alliance between the municipality and the concerned tenants and the parties in Ext.B1 are 11 R.C.R.Nos.35/2017 & connected cases facing vigilance enquiry. As rightly submitted by the learned counsel for the tenants, it is true that no documentary evidence has been adduced to prove the alleged unholy alliance or collusion between the Municipality and tenants. But, we find that the courts below is justified in discarding Ext.B1 in a different perspective also. It has come out in evidence that fair rent of different buildings within a radius of 100 – 150 metres varies from Rs.8/- per sq. ft. to Rs.72/- per sq. ft. It has come out in evidence by Exts.X1 and X2 that in the year 1990 rent was fixed @ Rs.32.50 and Rs.41/- per sq. ft.. Similarly, the rent of the building referred to in Ext.A1 is Rs.36.50 per sq. ft. If the prevailing rent of a building situated very near to the building referred to in Ext.A1 is Rs.36.50 in the year 1990, it can be reasonably presumed that rent @ Rs.8/- per sq. ft. in the year 2011 is not just and reasonable and the fixation of that rent at a very low rate, for the said building by the Municipality has to be doubted. However, this Court is also not inclined to accept the rent shown in Ext.B1, in view of the rate of prevailing rent brought on record in evidence, by other R.C.R.Nos.35/2017 & connected cases 12 documents such as Ext.A1, X1 and X2 etc. 13. As regards Ext.B13, it has come out in evidence that the building referred to in Ext.B13 is one having no road access at all. Therefore as rightly held by the appellate authority the building referred to in Ext.B13 cannot be compared with the petition schedule building. As far as Ext.B13 is concerned, it has come out in evidence that the building referred to in Ext.B13 has no independent existence and the same is a kitchen attached to a hotel. So it cannot be compared with the petition schedule building. Hence, the Appellate Authority is justified in discarding Ext.B13. We have already held that in view of Exts.A1, Exts.X1 and X2, the appellate court could not have fixed fair rent @ Rs.20 and Rs.18/- per sq. ft., about ½ of the rent referred to in those documents particularly, when those buildings are similarly situated, as that of the petition schedule building. The findings, whereby the Appellate Authority has discarded Exts.A1, X1 and X2 are vitiated by procedural irregularity, warranting interference of this Court under revisional jurisdiction and we do so. R.C.R.Nos.35/2017 & connected cases 13 14. Further, we find that in **Edger Ferus v. Abraham Ittycheria ( 2004 ( 1) KLT 767)** , this Court has formulated certain guidelines as parameters for fixing the fair rent. In the aforesaid decision, this court specifically stated that rent control court, while fixing fair rent must take note of the inflation and resultant reduction, in the purchasing power of money, variations in the cost of living index in the area after commencement of the lease, demand for accommodation and availability of the buildings in the locality etc. 15. In the above view, we further find that in the instant case, while determining the fair rent applicable to the petition schedule building, the courts below have failed to consider the aforesaid aspects. We are of the opinion that the variation in the cost of living index and reduction in the purchasing power of money, caused by inflation, is a universal phenomena which requires no special proof at all. In the instant case the last revision of rent was in the year 1999 and thereafter there was no enhancement in the rent so as to make the rent proportionate with the increase in the cost of living index and R.C.R.Nos.35/2017 & connected cases 14 reduction in purchasing power of money, caused by inflation. Therefore, we further find that the courts below ought to have considered the increase in the cost of living index after 1999 and reduction in money value, during the last 17 years. Having regard to the omission from the part of the appellate authority also, in defiance of the parameters laid down in **Edger Ferus v. Abraham Ittycheria ( 2004 (1) KLT 767)** , we are inclined to enhance the rent fixed by the Appellate Authority, in exercise of power, under the Revisional Jurisdiction. In R.C.P.Nos.18/2011, 39/2011, 40/2011 and 42/2011 the fair rent of the shop rooms would stand refixed @ Rs.23/- per sq. ft. and in R.C.P.Nos.38/2011, 41/2011 and 44/2011, the fair rent of the shop rooms would stand refixed at Rs. 20/- per sq. ft. 16. The learned counsel for the tenants advanced argument challenging the annual increase @ Rs.5/- per annum made by the courts below. According to the learned counsel, the annual increase made by the court below is illegal and unsustainable in view of the decision of this court in **Kadar Pillai K.S. v. M/s. Goven Travels, Ernakulam.** R.C.R.Nos.35/2017 & connected cases 15 **2014 (4) KHC 535)** . In the aforesaid decision, this court held as follows : “ 6. We are also of the view that those factors can be taken note of for periodical enhancement. But those general factors are to be shown to exist while granting periodical enhancement. The Rent Control Courts cannot routinely allow reasonable modification to rates so fixed. It has to be remembered that the right of the landlord is not foreclosed by fixing a fair rent by the Rent Control Court to approach the Court again for fair rent fixation. The cause of action to fix fair rent is a recurring cause of action depending upon factors that warrant fixation of the fair rent. In extreme case, there may warrant reduction of the fair rent so fixed on account of the decrease in market transactions, change of main avenue, shift of commercial activities, diversion of man road etc., therefore, in such situation it is not safe to award periodical increase. We do not find any reason has been assigned by the Rent Control R.C.R.Nos.35/2017 & connected cases 16 Court in granting periodical enhancement. Therefore, we affirm the decision of the Appellate Authority in setting aside the periodical enhancement.” 17. In view of the legal position laid down by this Court, the periodical enhancement for every year would stand set aside. But, the landlord is at liberty to move the Rent Control Court, claiming periodical enhancement in accordance with law and this order will not stand in that way. All the revision petitions filed by the landlords would stand allowed in part to the above extent of refixing the fair rent at the rate of Rs.23 per sq. ft. Similarly all the revision petitions filed by the tenants would stand allowed in part to the extent of setting aside the periodical enhancement of rent, for every year only. ## **K.HARILAL, JUDGE** ## **K.P.JYOTHINDRANATH, JUDGE** sv.