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1989 Supreme(Pat) 170

PATNA HIGH COURT
B.P.Singh, J.
Secretary, Balika Siksha Bhawan, Ranchi
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 1308 of 1987 ;
Decided On : APRIL 25, 1989

The proviso to Section 8(c) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982, prescribes the minimum fair rent to be determined by the Controller in cases where the landlord applies for rent fixation due to low rent. It does not restrict the Controller from fixing a higher fair rent based on the factors specified in Section 8 and Rule 3 of the Bihar Buildings (Lease, Rent and Eviction) Control Rules, 1983.

Headnote:

BIHAR BUILDINGS (LEASE, RENT AND EVICTION) CONTROL ACT, 1982 - SECTION 8(C) - FAIR RENT DETERMINATION - MAXIMUM INCREASE - INTERPRETATION - CONTROLLER'S DISCRETION - FACTORS TO BE CONSIDERED.

Fact of the Case:

Petitioners, a school and its secretary, challenged the orders fixing fair rent for the school premises under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982. The rent was increased from Rs. 200 to Rs. 5500 per month. Petitioners argued that the maximum permissible increase was 25% of the average monthly rent paid before December 1, 1980, as per the proviso to Section 8(c) of the Act.

Finding of the Court:

The Court held that the proviso to Section 8(c) only prescribed the minimum fair rent to be determined by the Controller in cases where the landlord applied for rent fixation due to low rent. It did not restrict the Controller from fixing a higher fair rent based on the factors specified in Section 8 and Rule 3 of the Bihar Buildings (Lease, Rent and Eviction) Control Rules, 1983.

Issues: 1. Whether the maximum increase in fair rent was limited to 25% of the average monthly rent paid before December 1, 1980, as per the proviso to Section 8(c) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982? 2. Whether the authorities erred in relying solely on the Executive Magistrate's report without considering the relevant factors for determining fair rent under the Act and Rules?

Ratio Decidendi: 1. The Court interpreted the proviso to Section 8(c) as prescribing the minimum fair rent to be determined by the Controller in cases where the landlord applied for rent fixation due to low rent. It did not restrict the Controller from fixing a higher fair rent based on the factors specified in Section 8 and Rule 3 of the Rules. 2. The Court held that the authorities erred in relying solely on the Executive Magistrate's report without considering the relevant factors for determining fair rent under the Act and Rules. The report did not consider the comparability of the premises, amenities provided, or other factors mentioned in Rule 3.

Final Decision: The Court quashed the orders fixing fair rent and remitted the matter to the Controller for a fresh determination in accordance with the provisions of Section 8 of the Act and Rule 3 of the Rules. The Controller was directed to consider all relevant factors and disclose the considerations in the report and order sheet.

Judgment

B.P.SINGH, J.

1. In the instant writ application, the petitioners have prayed for quashing of the orders Annexures-1 to 3 passed by the authorities under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982 fixing fair rent of the premises in question. Annexure-1 is the order passed by the Sub-divisional Officer, Sadar, Ranchi, dated 24-1-1985 whereby he accepted the report submitted by the Executive Magistrate and has fixed the monthly rental at Rs. 5500.00 . The order of the Sub-divisional Officer has been upheld by the Deputy Commissioner, Ranchi by his order Annexure-2 dated 5-11-1985. Annexure-3 is the order dated 14th July, 1987 passed by the Commissioner, South Chotanagpur Division, whereby she dfismissed the revision preferred by the petitioners.

2. A few facts not in dispute may be stated thus:-

Petitioner No. 2 is a school which is also a society registered under the Societies Registration Act. Petitioner No. 1 is its Secretary. Respondents Nos. 5 and 6 are the landlords of the premises in question. The premises is situate on the Circular Road in the city of Ranchi and the School runs in the premises in question. The building is an old building said to have been constructed in or about the year 1904. The petitioners have been the tenants in the aforesaid premises since the year 1934. At the time when the application for fixation of fair rent was filed by the respondents/landlords, a monthly rental of Rs. 200.00 was payable by way of rent for the aforesaid premises.

3. Learned counsel for the petitioners has submitted two main submissions for consideration in this writ application. He firstly submitted that under the proviso to sub-sec.(c) of S.8 of the Act, the maximum increase permissible in such a proceeding is 25% of the average monthly rent payable by the tenant over a period of 12 months preceding the first day of December, 1980. The submission is that on an application filed by the landlord for enhancement of rent, the authorities concerned may enhance the rent only to the extent of Rs. 25% over and above the rent paid in respect of the premises in question during the period of 12 months preceding the 1st day of December, 1980. In the instant case, the rent payable was Rs. 200.00 per month. It was, therefore, submitted that the increase could not be more than 25% of the aforesaid rent namely not more than Rs. 50.00 per month in terms of the aforesaid proviso. A grievance was made that the rent was enhanced from Rs. 200.00 to Rs. 5500.00 per month which was wholly unreasonable and contrary to the provisions of the Act.

The second submission urged before me was that the authorities under the act mechanically placed reliance upon the report of the Executive Magistrate who had enquired into the matter and without considering whether the aforesaid report had been submitted having regard to the factors to be taken into account under the Act and the Rules the authorities have based their orders solely on the aforesaid enquiry report. According to the petitioners, a mere perusal of the report of the Executive Magistrate concerned would show that he has not taken into account the relevant considerations in recommending the enhancement of rent for the premises in question. The aforesaid report of the Executive Magistrate is Annexure-B to the counter affidavit filed on behalf of respondent No. 6.

4. So far as first submission is concerned, it is necessary to notice the relevant provisions of the Act. S.5 of the Act provides as follows:-

"5. Determination of fair rent of buildings in occupation of tenants- (1) When, on application by the landlord or by the tenant in possession of a building or otherwise, the Controller has reason to believe that the rent of that building is low or excessive, he shall hold a summary enquiry and record a finding.

(2) If, on a consideration of all the circumstances of the case, including any amount paid by the tenant by way of premium or any other like sum in addition to t






























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