2024 Supreme(Bom) 689
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SANDEEP V. MARNE, J.
Britannia Industries Ltd. - Applicant
Versus
Maya Sunil Alagh - Respondent
Civil Revision Application No. 372 Of 2019 With Civil Revision Application No. 373 Of 2019
Decided On : 08-08-2024
Advocates Appeared:
For the Applicant :Mr. Navroz Seervai, senior advocate with Mr. Jay Zaveri and Ms. Tarleen Saini i/b Crawford Bayley & Co.
For the Respondent:Mr. Surel Shah, Senior advocate with Ms. Pooja Tukrel i/by. Mr. Raj Baid.
The Maharashtra Rent Control Act does not allow fixation of standard rent for premises let after October 1, 1987; hence disputes in these instances are adjudicated based on Section 8's provisions allowing court intervention.
Headnote:(A) Maharashtra Rent Control Act, 1999 - Section 7(14) and Section 8 - Rent fixation - The court examined the validity of standard rent fixation for premises let after 1 October 1987, determining that the Act does not confer authority to fix standard rent for such tenancies and concluded the standard rent at Rs. 805/- with a 4% annual increase must be upheld. (Paras 1, 2, 7, 116, 118)
(B) Jurisdiction - Standard rent cannot be fixed for tenancies initiated post-1 October 1987, per statutory provisions but the court maintains jurisdiction to resolve disputes regarding rent increases under Section 8. (Paras 64, 82, 116)
(C) Legislative Intent - The court noted the intention behind the MRC Act to exempt tenancies after the cutoff date from statutory rent regulation, as per legislative reports. (Paras 28, 60, 110)
(D)
Findings of Court:
The standard rent determined by the Appellate Bench was legally sound and reaffirmed the need for a fair approach in rent arbitration. (Paras 32, 96) (E)
Result: Revision Applications dismissed confirming that standard rent is Rs. 805/- per month with subsequent annual increases. (Paras 117, 118)
Legal Category Hierarchy
-
landlord and tenant law
-
rent control legislation
-
standard rent fixation
-
premises let after specified date
(Para 1, 2, 13, 14, 15, 64, 74, 76, 82, 90, 91, 116)
-
gap period tenancies
(Para 98, 99, 100, 101, 102, 107, 108, 112, 113, 116)
-
statutory interpretation
-
definition construction
(Para 65, 66, 67, 68, 69, 70, 71, 72, 73, 75)
-
drafting error correction
(Para 70, 71, 73)
-
court jurisdiction
-
small causes court
(Para 2, 3, 8, 9, 10, 11, 82, 83, 84)
-
revision jurisdiction under cpc
(Para 3, 10, 11, 118)
-
maharashtra rent control act 1999
-
section 7 standard rent definition
(Para 60, 61, 62, 63, 65, 66, 69, 70, 74, 75, 76, 77)
-
section 8 court power to fix rent
(Para 61, 82, 83, 84, 85, 86)
-
section 11 annual rent increase
(Para 114, 115, 118)
-
legislative history and intent
-
joint committee recommendations
(Para 54, 55, 56, 57, 58, 76, 77)
-
bombay rent act comparison
(Para 42, 43, 44, 45, 46, 47, 48, 49, 52, 53, 65)
-
economic package to landlords
(Para 92, 93, 94, 95, 96)
Table of Contents
1. Whether standard rent can be fixed under the Maharashtra Rent Control Act, 1999 for premises let after 1 October 1987?
Yes. The court can fix standard rent for post-1987 tenancies under Section 7(14)(c) and Section 8(1)(d) of the MRC Act, even though Section 7(14)(b) does not statutorily prescribe the standard rent for such tenancies. (Para
64
,
82
,
83
,
84
,
86
,
116
)
2. Whether the Small Causes Court has jurisdiction to entertain application for fixation of standard rent in respect of premises let after 1 October 1987?
Yes. The court has jurisdiction under Section 8(1)(d) of the MRC Act to fix standard rent where there is a dispute between landlord and tenant regarding the amount of standard rent, including for post-1987 tenancies. (Para
82
,
83
,
84
,
86
,
116
)
3. Whether the word 'or' in paragraph (ii) of Section 7(14)(b) of the MRC Act is a drafting error?
Yes. The word 'or' creates absurd reading and should be omitted; paragraph (ii) deals only with premises let before 1 October 1987, and the third eventuality of post-1987 tenancies was consciously excluded from the definition. (Para
70
,
71
,
73
)
4. Whether the contractual rent agreed during the gap period (2 October 1987 to 30 March 2000) becomes the standard rent for such tenancies?
Yes. For tenancies created during the gap period, the contractual rent agreed at the time of letting is the standard rent, governed by Section 5(10)(b)(iii) of the Bombay Rent Act, notwithstanding the deletion of post-1987 standard rent provisions in the MRC Act. (Para
107
,
108
,
112
,
113
,
116
)
5. Whether the legislature's omission of standard rent fixation for post-1987 tenancies in the MRC Act follows the Joint Committee's recommendation?
Yes. The Joint Committee recommended permanent exemption of post-1987 tenancies from standard rent provisions to unlock housing stock, and the legislature adopted this recommendation while enacting the MRC Act. (Para
54
,
56
,
57
,
58
,
76
,
77
)
JUDGMENT :
(SANDEEP V. MARNE, J.)
A. INTRODUCTION
1) India’s biscuit giant Britania(Britannia Industries Ltd., Revision Applicant in both Revision Petitions), is piqued by fixation of standard rent of a swanky apartment in IL Pallazo building located at upmarket area of Malabar Hill in Mumbai City at Rs. 805, when, according to Britania, the apartment can easily fetch monthly market rent of at least Rs. 6,00,000/-. Britania is engaged in a fierce battle over fixation of rent with its tenant Maya Alagh(Maya Sunil Alagh, Respondent in both Revision Applications), a television and film actress and wife of Britania’s former Managing Director. Britania propounds a case, which possibly has not been put forth by any landlord in State of Maharashtra yet, that standard rent cannot be fixed by a Court in respect of premises let after 1 October 1987 and that therefore Britania is justified in demanding market rent in respect of the flat let to its tenant.
2) Whether standard rent can be fixed under the provisions of Maharashtra Rent Control Act, 1999 in respect of premises let after 1st October 1987 is the issue that this Court is tasked upon to decide in these two Revision Applications. It is Revision Applicant’s contention that the Legislature has consciously omitted provision for fixation of standard rent in respect of premises let after 1st October 1987 considering the judgment of the Apex Court in Malpe Vishwanath Acharya : (Malpe Vishwanath Acharya and others Versus. State of Maharashtra and Anr (1998) 2 SCC 1) and that therefore Small Causes Court does not have jurisdiction to entertain application for fixation of standard rent in respect of such premises. If the main issue is to be answered in the affirmative, the next issue is about manner of fixation of standard rent in respect of premises let during gap period of 1 October 1987 and 30 March 2000 i.e. the date before coming inti force of Maharashtra Rent Control Act 1999.
B. THE CHALLENGE
3) These two Revision Applications are filed invoking revisionary jurisdiction of this Court under Section 115 of the Code of Civil Procedure, 1908 challenging the common judgment and order of the Appellate Bench of Small Causes Court dated 21 February 2019 dismissing Revision Application No. 312 of 2017 filed by the Applicant-Landlord and partly allowing the Revision Application No. 62 of 2018 filed by the Respondent-Tenant. The Appellate Bench has set aside the direction Nos. (2) and (3) of the judgment and order of the Small Causes Court, Mumbai in R.A.N. Application No. 75/SR of 2005 dated 3 October 2017. The Small Causes Court had allowed the R.A.N. Application No.75/SR of 2005 filed by Respondent by fixing standard rent of the premises at Rs. 10,880/- per month alongwith 4% annual increase and all the leviable charges including taxes and society charge on the application premises. The Appellate Bench has instead directed that standard rent in respect of application premises would be basic rent plus society maintenance charges and lease rent as agreed between the parties, while letting out the application premises to the Respondent. In short, the Appellate Bench has fixed Rs. 805/- as the standard rent in respect of the suit premises. Applicant is aggrieved by entertainment and decision of application for fixation of standard rent in respect of suit premises, which are let in the year 1995 on the ground that there is no provision in the Maharashtra Rent Control Act, 1999 (MRC Act) for fixation of standard rent in respect of premises let after 1st October 1987.
C. FACTUAL BACKGROUND
4) Revision Applicant is a well-established name in Indian households and is a leading food product company manufacturing and selling various food items including products relating to bakery, dairy, snacking, etc. Respondent is an advertising model and also a medical practitioner and wife of then then Managing Director of Applicant-Company Mr. Sunil Alagh.
5) Respondent’s husband Mr. Sunil Alagh was in service of the A
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