Judgment

SARKARIA, J.:- Whether the principle of apportionment is applicable to the fixation of standard rent of a premises under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, the Act); if so, whether on the facts of the case, the principle has been rightly invoked - is the two-fold question that falls for decision in these three appeals by special leave directed against the judgment of the High Court, of Judicature at Bombay.

2. The material facts are as under :

A big compound measuring 11,150 sq. yards at 156, Tardeo Road, Bombay, belonged to Raja Bahadur Moti Lal Mills Ltd., Bombay, appellant No. 1. The Mills were shifted from these premises in the year 1930. In 1932, the whole of this estate including the structures standing on a part of it, was let out to Sound Studios Ltd. Between the years 1932 and 1940, some part of it was sub-let by Sound Studios to Sheraj Ali, who was the proprietor of M/s. Famous Cine Laboratory and another part of Neon Signs (India) Ltd., and the rest of the estate continued to be with Sound Studios. Thereafter, Sound Studios went out of the picture and the whole estate was let out to National Studios Ltd. on October 23, 1940 at a monthly rent of Rs. 1700/- for a period of two years.

3. In July, 1941, National Studios surrendered their lease and Sheraj Ali became a direct tenant under appellant 1 in respect of the premises in his possession, called for the sake of identification, 983/1 (whole) and 983/2 (Ground floor). On December 1, 1941 and again in November, 1942, Sheraj Ali took on rent additional portions of this estate so that his original rent, which was Rs. 400/-, was first increased to Rs. 600/- and then to Rupees 700/- and thereafter in November, 1942 to Rs. 875/-. By November, 1947, Sheraj Ali was paying Rs. 1200/- per month as rent for the premises demised to him including some new structures which had been built.

4. Sheraj Ali had taken a loan from M/s. Govind Ram Bros Ltd., Respondent 1 on the security of his Film Studio Equipments. He failed to repay the loan. Thereupon Respondent 1 instituted a suit for recovery of the amount and obtained a decree from the High Court on February 27, 1948. As a result of the High Court s decree, the right, title and interest of Sheraj Ali in the mortgaged property were assigned to Respondent 1. Respondent 1, in consequence, took a fresh lease on March 19, 1948 from appellant No. 1 of the properties (called for identification) 983/1 to 983/12, which were in the tenancy of Sheraj Ali, at a contractual rent of Rs. 1228/- p. m. On the same date, Respondent 1 executed another lease in respect of three rooms in the same premises (marked for identification as) 984, in favour of appellant 1, on a monthly, rent of Rs. 750/-. Respondent 1 failed to pay the contractual rent, regularly, which fel into arrears which were not cleared despite the pressing demands made by the Receiver. On March 13, 1954, the Receiver wrote to Respondent 1 threatening to take legal proceedings for the recovery of the rent.This Receiver who is now appellant No. 2, had been appointed by the High Court in Suit No. 454 of 1949 instituted by appellant 1 against the Insurance Company.

5. On April 4, 1954, two applications were failed in the Court of FGSmall Causes by Respondent 1 for fixation of standard rent in respect of the premises comprised in the said two leases : one application, R. A. N. 983/54 relates to properties 983/1 to 983/12, and the other (R.A.N.984) to premises 984. It was alleged in the applications that since on September 1, 1940, the entire estate, including the properties in question, had been let out on a monthly rent of Rs. 1700/-, standard rent of the premises in question should be fixed on the basis of apportionment. In particular, it was pleaded that fair rent of 983/1 to 983/12 should be 1/8th of Rs. 1200/- which was later corrected as Rs. 1700/-. On the same basis it was alleged in the second application that fair rent of premises 984 s