The court reaffirmed that a landlord's contractual rent rate is valid unless proven excessive, emphasizing the ineffectiveness of arbitrary rent reductions in commercial leases under the Bombay Rent Act.

JUDGMENT :

SANDEEP V. MARNE, J.

1. Petitioner-landlord has filed this petition challenging the judgment and order dated 18 March 1998 passed by the Appellate Bench of the Small Causes Court allowing the Revision Application No.33/1997 filed by the Respondent-tenant and setting aside the order dated 24 December 1996 passed by the Small Causes Court by which R.A.N. Application No. 691/SR of 1979 filed by the Respondent-tenant for fixation of standard rent in respect of the suit premises was rejected. The Revisional Court has fixed the standard rent of the suit premises at Rs.1000/- per month by reducing the same from contractual rent of Rs.2,000/- per month.

2. The Petitioner is an owner in respect of land bearing Plot No.4, admeasuring 3017 sq. yards, Revised Suburban Scheme No. III (Group-A) at Chembur, Mumbai (suit premises). By Deed of Lease dated 9 June 1962, Petitioner leased out in Respondent’s favour the suit premises by accepting Rs.12,000/- as deposit and rent of Rs.2,000/- per month. The tenure of the lease is for 99 years. As per the conditions of the lease, Respondent has constructed a cinema hall on the suit premises.

3. By advocate’s letter dated 4 December 1978, Respondent requested the landlord to furnish all particulars relating to standard rent of premises including the value thereof and demanded reduction of rent to a fair and reasonable figure. Since Petitioner-landlord failed to respond to the said letter, the Respondent-tenant filed R.A.N. Application No. 691/SR of 1979 for fixation of standard rent in respect of the suit premises at Rs. 5/- per month. The application was resisted by the Petitioner- landlord by filing his reply. Based on the pleadings, the Small Causes Court framed the issue as to whether the rent charged by the Petitioner-landlord was excessive or exorbitant. Both the sides led evidence in support of their respective claims. After considering the pleadings, documentary and oral evidence, the Small Causes Court proceeded to reject the application for fixation of standard rent by its order dated 24 December 1996 by holding that the rent charged by the landlord was neither excessive nor exorbitant. The Respondent-tenant filed Revision Application No. 33/1997 challenging the Small Causes Court’s order dated 24 December 1996 before the Appellate Bench of the Small Causes Court. The Revision Application filed by the Respondent-tenant has been allowed by the Appellate Bench by reducing the standard rent in respect of the suit premises to Rs.1,000/- per month. Aggrieved by the order dated 18 March 1998 passed by the Appellate Bench of the Small Causes Court, the Petitioner- landlord has filed the present petition. By order dated 19 February 1999, the petition was admitted and prayer for interim relief was rejected. The petition is called out for final hearing.

4. Mr. Kanetkar, the learned counsel appearing for the Petitioner-landlord would submit that the tenant agreed to pay rent at the rate of Rs.2,000/- per month by Indenture of Lease dated 9 June 1962 and he continued paying the same without any demur and raised the issue about the quantum of rent for the first time by notice dated 4 December 1978. That no event had occurred which would enable the Respondent-tenant to file an application for reduction of contractual rent. That from contractual rent of Rs. 2,000/- per month, Respondent-tenant prayed for fixation of standard rent at Rs. 5/- per month. He would submit that the Rev