PATNA HIGH COURT
V.Ramaswami and Raj Kishore Prasad JJ.
Ram Krishna Shukla
Versus
Thakur Sri Ramjanki Through Sri Rambalak Das
Civil Revision No. 972 of 1954 ;
Decided On : SEPTEMBER 13, 1956
BIHAR BUILDINGS (LEASE, RENT AND EVICTION) CONTROL ACT, 1947 - SECTION 6(2) - INTERPRETATION - LANDLORD'S RIGHT TO RECOVER RENT AT CONTRACT RATE FOR PERIOD PRIOR TO DETERMINATION OF FAIR RENT.
Fact of the Case:
The question before the court was whether a landlord could recover rent from his tenant at the contract rate for the period prior to the determination of fair rent under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (Bihar Act III of 1947).
Finding of the Court:
The court held that the landlord was not entitled to recover rent from his tenant at the contract rate for the period prior to the determination of fair rent under Section 5(2) or Section 6(1) of the Act, and prior to the date appointed under Section 8(3) of the Act for commencement of the fair rent so determined by the Controller.
Issues: 1. Whether Section 6(2) of the Act prohibits a landlord from letting out a building without first getting the fair rent determined by the Controller? 2. Whether a contract entered into between a landlord and a tenant to pay rent, which is not the fair rent, previously determined either under Section 5(2) or Section 6(1) of the Act, is void? 3. Whether a landlord can recover rent from his tenant at the contract rate for the period prior to the determination of fair rent?
Ratio Decidendi: 1. The court interpreted Section 6(2) of the Act as an absolute prohibition against a landlord letting out a building without first getting the fair rent determined by the Controller. 2. The court held that a contract entered into between a landlord and a tenant to pay rent, which is not the fair rent, previously determined either under Section 5(2) or Section 6(1) of the Act, is void as it is contrary to the provisions of Section 6(2) of the Act. 3. The court held that a landlord cannot recover rent from his tenant at the contract rate for the period prior to the determination of fair rent, as such a contract is void and unenforceable.
Final Decision: The court allowed Civil Revision Nos. 149 and 151 of 1955, and 972 of 1954, and dismissed Civil Revision No. 217 of 1955.
Raj Kishore Prasad, J.
1. These four applications in revision, under Sec.25 of the Provincial Small Cause Courts Act, by the defendants, have been referred to a Division Bench, as a common point of law, which involves the interpretation of Sec. 6 (2) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, (Bihar Act III of 1947), hereinafter referred to as "the Act", arises for decision.
2. The question for consideration is, can a landlord, who has let out his house on rent, in contravention of Sec. 6 (2) of the Act, recover the rent, from his tenant, at the contract rate?
3. It is necessary for a proper understanding, and determination, of the question at issue, to rend Sections 5, 6 and 8 of the Act. These sections are in these terms:
"5. (1) When, on application by the tenant in" possession of a building or otherwise, the Controller has reason to believe that the rent of that building is excessive, he shall hold a summary inquiry and record a finding,
(2) If, on a consideration of all the circumstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition to the rent, the Controller is satisfied that the rent of the building is excessive he shall determine the fair rent for such building.
6. (1) The Controller may, on his own motion, and shall, on the application of the landlord or a prospective tenant and after making such inquiry as he thinks fit, determine the fair rent for any building riot in the occupation of a tenant and such fair rent shall be determined as for a tenancy from month to month.
(2) It shall not be lawful for a landlord to let any building the fair rent of which has not been previously determined under the provisions of Sub-section (2) of Sec. 5 or Sub-section (1) of this section.
8. (1) .....
(2) When the fair rent of a building has been determined or re-determined, any sum in excess of such fair rent paid, whether before or after the notified date in respect of occupation for any period after such notified date, shall be refunded to the person by whom it was paid or at the option of such person, otherwise adjusted.
(3) In every, case in which the Controller determines or redetermines the fair rent of a building, he shall appoint a date with effect from which the fair rent so determined or redetermined shall take effect. Provided, ...... ......... ..."
4. From the above provisions of the Act, its intendment is quite clear. . The Act was enacted to regulate the letting of buildings, to control rent of such buildings and to prevent unreasonable eviction of tenants therefrom in the State of Bihar. The Act provides that if a tenant is already in possession of a building, obviously at the notified date", which means, under Sec.2(f), of the Act, the date of the commencement of the Act, or the date on which the Act is applied to any local area, other than the local areas specified in the schedule to the Act, and, if he thinks that the rent of the building in his occupation is excessive, he can make an application, to the Controller under Section 5(1), for determination of fair rent of the building in his possession. Under Sec. 5(1) the Controller can even suo motu take action under it, if he is satisfied that the rent is excessive.
Under Sec. 5 (2) the Controller thereafter, if he is satisfied that the rent of the building is excessive, shall determine the fair rent for such build-ing, on a consideration of all the circumstances of the case mentioned in Sec. 5 (2). If, however, the building is not in occupation of any tenant, here also, obviously at the "notified date", and if the landlord desires to let out his building on rent, he shall get, first of all, the fair rent of such a building determined by the Controller under Sec. 6(1) before he actually lets out the building. Sec. 6(1), therefore, gives a right to the landlord as also to the prospective tenant to make an application to the Controller for determination of fair
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