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1928 Supreme(SC) 49
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT SUMNER, LORD ATKIN, AND SIR JOHN WALLIS.
KARNANI INDUSTRIAL BANK - Appellant
Versus
SATYA NIRANJAN SHAW - Respondents
On Appeal from the High Court at Calcutta.
Decided On : June 14, 1928.
Solicitors for appellants :Clarke, Rawlins & Co. Solicitors for respondents: Downer & Johnson.
The term 'tenant' in rent control legislation, regarding the determination of standard rent, includes 'ex-tenants' to ensure that protections against excessive rent and the right to recover overpayments are not defeated by the termination of the tenancy.
Headnote:(A) Rent Act, 1920 - Sections 4, 14, and 15 - Jurisdiction of the Controller of Rents - Definition of 'tenant' - Whether the Controller has jurisdiction to fix standard rent upon application by a person whose tenancy has been determined - The Act aims to restrict the increase of rents and allow the recovery of excessive rent paid - If the right to apply for a standard rent certificate were limited to current tenants, a landlord could avoid liability for excessive rent by simply determining the tenancy - Therefore, the term 'tenant' in the context of the Act must be construed to include 'ex-tenants' to give working effect to the legislation. (Paras 15-21)
(B) Rent Act, 1920 - Section 15(3)(a) - Power to fix standard rent - The Controller has the jurisdiction to determine whether a difficulty arises in giving effect to the Act and to fix the standard rent accordingly - Such a determination is within the Controller's jurisdiction, and any error in the conclusion is a matter for appeal rather than a challenge to jurisdiction. (Para 24)
(C) Retrospective application of standard rent - The Controller is empowered to fix standard rent retrospectively to enable a tenant to ascertain whether rent paid was in excess of the standard rent. (Para 25)
Facts of the case:
A tenant leased premises for a fixed term but failed to perform repairing covenants and defaulted on rent payments. The landlords served a notice to determine the lease and initiated ejectment proceedings. After the tenancy was determined, the tenant applied to the Controller of Rents to fix the standard rent. The Controller fixed the rent, but the High Court set aside the order, holding that the applicant was no longer a tenant at the time of application and thus the Controller lacked jurisdiction.
Findings of Court:
The court found that the term 'tenant' must include 'ex-tenants' to prevent landlords from defeating the purpose of the Act by terminating tenancies to avoid refunding excessive rent. Additionally, the statutory definition of 'tenant' as a person by whom rent is payable covers those who owe arrears. The Controller's power to fix rent under Section 15(3)(a) is discretionary and can operate retrospectively.
Issues: Whether the Controller of Rents has jurisdiction to grant a certificate of standard rent to a person whose tenancy has already been determined by forfeiture or effluxion of time.
Ratio Decidendi: To ensure the effectiveness of provisions prohibiting excessive rent and allowing its recovery, the terms 'landlord' and 'tenant' must be interpreted to include 'ex-landlord' and 'ex-tenant'. A narrow construction would allow the protections of the Act to be easily bypassed by the termination of the tenancy.
Result: Appeals allowed; decree of the High Court on the rule for revision discharged.
Legal Category Hierarchy
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property law
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landlord and tenant
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rent control
- standard rent certification
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rent control
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landlord and tenant
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practice and procedure
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jurisdiction
- administrative tribunal jurisdiction
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jurisdiction
Judgement
Appeal (No. 13 of 1927) from an order of the High Court (June 19, 1925) reversing orders of the Controller of Rents ; and appeal (No. 87 of 1927) from a decree of the High Court in its appellate jurisdiction (April 27, 1926) varying a decree of the Court in its original jurisdiction.
The appeals, both by the above named appellants, related to the CALCUTTA RENT ACT , 1920, as amended in 1923 and 1924, and raised questions with regard to the jurisdiction of the Controller of Rents thereunder. There was a further question as to the jurisdiction of the President of the Improvement Tribunal in appeal, but that question was concluded in favour of the appellants by the decision of the Board in Keshoram Poddar v. Nundo Lal Mallick . (( 1927) L. R. 54 I.
A. 152.)
The facts and the effect of the decisions in the matters given in India appear from the judgment of the Judicial Committee.
1928. April 24; May 8, 10. W. A. Greene K.C. and Dube for the appellants.
De Gruyther K.C. and Parikh for the respondents.
June 14. The judgment of their Lordships was delivered by
LORD ATKIN. These two appeals from the High Court at Port William in Bengal raise a question as to the construction of the CALCUTTA RENT ACT , 1920.
On October 7, 1920, the appellants (hereinafter called " the bank ") took a lease from the respondents (hereinafter called " the landlords ") of premises, 3 and 4, Royal Exchange Place, Calcutta, for a term of three years from November 1, 1920, at a rent of Rs.5400 a quarter, payable in advance. The premises at the time appear to have been let in tenements at monthly rents. In the lease there were stringent repairing covenants, under which the bank were to put the premises in substantial repair, expending at least Rs. 10,000, and to keep them in good repair. They were to eject such of the occupiers as they desired at their own risk and expense. There was the usual forfeiture clause, and the bank had an option to renew for a further term of three years. The bank were not able to evict the occupiers, and apparently took no steps to perform the repairing covenants. They paid the rent up to August 1, 1922, and no further. On August 15, 1923, the landlords served the bank with notice to determine the lease for breach of the repairing covenant, and on September 10, 1923, they instituted proceedings in ejectment, claiming possession, arrears of rent up to August 15, 1923, mesne profits and damages for breaches of covenant. On December 1, 1923, the bank made application under s. 15 of the Rent Act of 1920 to the Controller appointed under the Act to fix the standard rent of the premises and to grant a certificate of the standard rent. On December 13, 1923, the landlords filed a counter statement. On March 11, 1924, the Controller fixed the standard rent at Rs.1420 per mensem and granted his certificate accordingly.
On March 22, 1924, the landlords appealed from the order of the Controller to the President of the Improvement Tribunal pursuant to s. 18 of the Rent Act, and on March 24 the bank also appealed to the President, seeking to have the standard rent fixed at a lower sum.
The Rent Act of 1920 was only to be in force for three years from May 5, 1920, but by the Calcutta Rent Amend ment Act of 1923 it was extended to the end of March, 1924. By the Calcutta Rent Amendment Act of 1924 it was further extended to the end of March, 1927, with a proviso that after March 31, 1924, it should cease to apply to any premises the rent of which exceeded Rs.250 a month or Rs.3000 a year on November 1, 1918.
The appeals before the President were adjourned for divers reasons from time to time until January 31, 1925, when he dismissed both appeals on the ground that the Act of 1920 had ceased to apply to the premises, and therefore he had no jurisdiction. It is admitted that this decision was wrong in law, the contrary having been decided by this Board in Keshoram Poddar v. Nundo Lal Maffick, (L. R. 54
I. A. 152.)
On February 23, 1925, the
