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1997 Supreme(Cal) 73
High Court Of Calcutta
S. B. SINHA
SANTOSH KUMAR ROY - Appellant
Versus
STATE OF WEST BENGAL - Respondent
C. O. 17832 (W) Of 1996
Decided On : 02/17/1997
AJIT PANJA, Amitava Nayak, ANAMI SIKDAR, ANOVAR MONDAL, ASOKE DEY, Bandana Das, DEBASIS KAR GUPTA, PULAK RANJAN MONDAL, RAMESWAR BHATTACHARYA, SIPRA MAJUMDAR, SUBRATA GHOSH, TARUN ROY
The State has the power to revise rent under an agreement with tenants, which must be exercised reasonably, and the tenants can challenge an increase on the ground that it is arbitrary.
Headnote:
WEST BENGAL PREMISES (REGULATION OF OCCUPANCY) ACT, 1976 - RENT REVISION - AD-HOC REVISION - LEGALITY - PRINCIPLES OF NATURAL JUSTICE - LEGITIMATE EXPECTATION - APPLICABILITY.
Fact of the Case:
Petitioners, tenants in flats owned by the State of West Bengal, challenged an ad-hoc increase in monthly rent directed by the State Government. The tenancies were governed by agreements entered into between the Government and the tenants, some dating back to the early 1960s. The petitioners contended that no rent could be revised as there was no provision for it under the West Bengal Premises (Regulation of Occupancy) Act, 1976, and that any revision must be made by agreement between the parties.
Finding of the Court:
The Court held that: 1. The tenancies were governed by both a statute and an agreement. The Act imposed restrictions on the rights of the tenant and created certain rights in favor of the State, but the terms and conditions of the tenancy were governed by the agreement. 2. The Act did not contain any provision for enhancement of rent, but that did not mean that the State had no power to do so. The agreement itself conferred the power to revise rent, which was not repugnant to the Act. 3. The State had the power to revise rent reasonably, and the tenants could challenge an increase on the ground that it was arbitrary. 4. The State had appointed a High Power Committee to consider the issue of rent revision, which had recommended a stiff rise in rent. However, the State did not accept the report in its entirety and instead directed an ad-hoc increase in rent pending the submission of a report by another committee. 5. The State's action in increasing rent on an ad-hoc basis was not wholly arbitrary and did not violate the principles of natural justice, as the matter was still under consideration by the committee and the tenants would have an opportunity to be heard. 6. The doctrine of legitimate expectation did not apply in this case, as the revision of rent was covered by the contractual obligations of the parties and did not involve any public law element.
Issues: 1. Whether the State had the power to revise rent under the West Bengal Premises (Regulation of Occupancy) Act, 1976 and the agreement between the parties. 2. Whether the ad-hoc increase in rent was arbitrary and violative of the principles of natural justice. 3. Whether the doctrine of legitimate expectation applied in this case.
Ratio Decidendi: 1. The State had the power to revise rent under the agreement between the parties, which expressly reserved the right to do so. Such power had to be exercised reasonably, and the tenants could challenge an increase on the ground that it was arbitrary. 2. The ad-hoc increase in rent was not wholly arbitrary and did not violate the principles of natural justice, as the matter was still under consideration by a committee and the tenants would have an opportunity to be heard. 3. The doctrine of legitimate expectation did not apply in this case, as the revision of rent was covered by the contractual obligations of the parties and did not involve any public law element.
Final Decision: The Court dismissed the petitions, holding that the State had the power to revise rent under the agreement between the parties and that the ad-hoc increase in rent was not wholly arbitrary and did not violate the principles of natural justice. The Court also held that the doctrine of legitimate expectation did not apply in this case.
( 1 ) ALL these applications involving common questions of facts and law are being taken up for hearing together and are being disposed of by its common judgement.
( 2 ) THE petitioners are tenants in the flats owned by the State of West Bengal. For the purpose of such tenancy agreements had been entered into by and between the Government of West Bengal and the tenants. Some of the tenancies relate back to early 60's.
( 3 ) THE petitioners in these applications are aggrieved by an order whereby adhoc increase in the monthly rent was directed in terms of a letter dated 14-10-1996 as contained Annexure 'g' in the writ application filed by the Belgachia Villa Tenauts' Association and others, being C. O. No. 20322 (W) of 1996.
( 4 ) THE basic fact of the matter would be considered from the averments made in the said applications.
( 5 ) THE petitioner No. 1 is a Registered Society and other petitioners are its members and tenants of respective flats at Belgachia Villa being Premises No. 64 Belgachia Road, Calcutta. By a letter dated 28-6-96 the petitioners allegedly pointed out various difficulties to the Minister Housing Department and asked for an appointment with him. On 16-886 the petitioners addressed a letter to the Executive Engineer, Housing Construction Division wherein they pointed out the bad state of maintenance of the building, boundary walls and inter roads as also alleged failure on the part of the Calcutta Municipal Corporation to supply filter water. It is stated that there had been no maintenance of the tenanted premises for the last 10 years and even the campus was not being cleaned. On 22-8-96 the petitioners wrote another letter to the Hon'ble Minister pointing out that despite a memorandum submitted to the Chief Engineer on 23-2-86 no step had been taken for repair and water supply or maintenance of the flats or the boundary wall and roads and/ or the sewerage system. Again a letter dated 18-9-96 was issued by the petitioner No. 1 the Hon'ble Minister allegedly pointing out about' re-structuring of the rent, maintenance and repair of the flats and the roads. A High Power Committee admittedly came into being for the purpose considering the malli relating to increase in the rate of rent. On or about 23-9-96 the concerned respondents purported to be relying on or on the basis of the said report directed increase in rent. The grievances of the petitioners appear to be that neither any report of the said High Power Committee had been supplied to them nor the petitioners were called by the said Committee for a hearing. Such increase in rent was to take effect from 1-10-96. However 0 on 3-10-96 an advisory committee was constituted by the Governor of the State of West Bengal on the representation of the petitioners to examine thoroughly the provisional revision of rent made by the government on the basis of the recommendations and to reach a final decision as also to consider the scope of proper work of maintenance. The said resolution was published in the Calcutta Gazette. By reason of the said resolution the members of the committee were directed to submit a report within six months. On or about 4-10-96 the petitioners pointed out various difficulties as regard payment of the increased rent to the Secretary of the Housing Department. The petitioners also filed a representation before the Government of West Bengal on 8-10-96. However by reason of a memorandum issued on 14-10-1996 as contained in Annexure 'g' to the writ petition the rate of rent was directed to be doubled on an adhoc basis. By reason of the said memorandum, the earlier memorandum dated 23-896 being Annexure 'c' to the said writ petition was superceded. On 7-11-96 the advisory committee was to make on the spot study, wherefore a notice was issued. The said notice envisaged interaction with the Tenants' Association a copy whereof was also sent to the petitioners.
( 6 ) MR. Ajit Panja the learned senior counsel appearing on behalf
