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1972 Supreme(Del) 139
High Court Of Delhi
MADHO LAL - Appellant
Versus
RAM DAS - Respondent
SECOND APPEAL 58 of 1970
Decided On : 05/05/1972
M.L.KAPUR, S.N.MARVAH
The market price of the land comprised in the premises means the price which a willing seller would obtain for it if the land is put to sale in an open market. Such a market price cannot be ascertained if the land is inalienable by its owner either by the conditions on which it is held or by law.
Headnote:
RENT CONTROL ACT - STANDARD RENT - DETERMINATION - MARKET PRICE OF LEASEHOLD LAND.
Fact of the Case:
The landlord, Madho Lal, was granted a lease of plot No. 15/1 of Government land without premium on a ground rent of Rs. 125.00 per annum. In 1952-53, he built three shops on a part of this land and let them out to tenants. The Additional Controller fixed the standard rents of the shops after considering the cost of construction and the market price of the land. The landlord filed appeals challenging the standard rents fixed by the Additional Controller.
Finding of the Court:
The court held that the market price of the land comprised in the premises means the price which a willing seller would obtain for it if the land is put to sale in an open market. Such a market price cannot be ascertained if the land is inalienable by its owner either by the conditions on which it is held or by law. If the land is saleable, then its market price would mean the price of the land as a whole and not merely of the leasehold interest as distinguished from the reversion vested in the owner.
Issues: 1. Whether the market price of lease-held land comprised in the tenanted premises is to be determined in accordance with the principles laid down in Prem Kumar Bhatia vs Shiv Datt Sharma, 1969 Rent Control Journal 644, or any other. 2. Whether the market price of the land can be ascertained if the land is inalienable by its owner.
Ratio Decidendi: 1. The market price of the land comprised in the premises means the price which a willing seller would obtain for it if the land is put to sale in an open market. 2. Such a market price cannot be ascertained if the land is inalienable by its owner either by the conditions on which it is held or by law. 3. If the land is saleable, then its market price would mean the price of the land as a whole and not merely of the leasehold interest as distinguished from the reversion vested in the owner.
Final Decision: The court answered the question referred to the Division Bench as follows: The market price of the land comprised in the premises means the price which a willing seller would obtain for it if the land is put to sale in an open market. Such a market price cannot be ascertained if the land is inalienable by its owner either by the conditions on which it is held or by law. If the land is saleable, then its market price would mean the price of the land as a whole and not merely of the leasehold interest as distinguished from the reversion vested in the owner.
( 1 ) UNDER section 6 (1) (A) (b) as well as under section 6 (1) (B) (2) (b) of the Delhi Rent Control Act, 1958 (hereinafter called the Act) the annual standard rent in relation to any premises is to be a percentage of the aggregate amount of (1) the reasonable cost of construction and (2) the market price of the land comprised in the premises on the date of the commencement of the construction". The first factor was considered in Diwan Chand vs. Tirath Ram 1972 R C. R. 88. The second factor was briefly considered in Prem Kumar Bhatia Vs Shiv Dutt Sharma, 1969 R. C. R. 575. It was contended for the appellant that a later decision in Chuni Lal vs. Ram Parkash, 1990 RCR. 67, has impliedly taken a view different from the view expressed in Prem Kumar Bhatia vs Shiv Dutt Sharma. B. C, Misra, J. , therefore, referred the following question to Division Bench, namely :- Whether the market price of lease-held land comprised in the tenanted premises as, on the date of the commencement of construction, is, for the purpose of determining the standard rent under section 6 of the Delhi Rent Control Act of 1958, to be determined in accordance with the principles laid down in Prem Kumar Bhatia vs Shiv Datt Sharma, 1969 Rent Control Jounal 644, or any other.
( 2 ) THE landlord in all these three appeals (namely, S. A. Os. 57, 58 and 59 of 1970) is Madho Lal. As a displaced person, he was given lease of plot No. 15/1 of Government land without premium on a ground rent of Rs. 125. 00 per annum. In 1952-53. he built on a part of this land three shops each on an area of 10 square yards. These shops were let out to three tenants who are the respondents in the three appeals at Rs. 40. 00, Rs. 50. 00 and Rs 50. 00 per month respectively. Within two years of the commencement of the Act, the Additional Controller Shri B. K. Agnihotri fixed the standard rents of the shops of the tenants Ram Dass, Rawel Singh and Roop Chand at Rs. 11. 00, Rs. 10/50 and Rs 8. 62 respectively, after finding that the cost of construction of the shops let out to them was Rs. 1,489. 00, Ks 1,373. 00 and Rs, 1,179. 00 and the market price of the land comprised in each shop on the date of the construction was Rs. 265. 00, Rs. 260. 00 and Rs. 210. 00 respectively calculated at the rate of Rs. 21. 00 per square yard. In the appeals filed by the landlord, the Rent Control Tribunal Shri P. S. Patter remanded the case for fresh disposal. In further appeals by the landlord to the High Court the cases were remanded back to the Tribunal for disposal in the light of the observations of the judgement of the High Court which is reported in Madho Lal vs. Roop Chaad, 1970 R. C. R. 26.
( 3 ) SHRI Gian Chand Jain, Rent. Control Tribunal proceeded to determine the standard rent of the shops under section 6 (1) (B) (2) (b) of the Act which was less than the standard rent fixed by the Additional Controller in the first instance. The appeals of the landlord were, therefore, dismissed. Hence these second appeals by the landlord.
( 4 ) FIRSTLY, let us consider the evidence regarding the cost of construction of the shops The shops were constructed by the present landlord himself. The amount spent on the construction was therefore, within his personal knowledge. As pointed out in Diwan Chand vs Tirath Ram, it was the duty of of landlord, therefore, to adduce evidence of actual expenses incurred by him on construction. He has totally failed to do so. He made a general statement that he spent about Rs. 20,000. 00 on the construction of the shops. The learned Rent Control Tribunal characterised this statement as- "absurd on face of it. The area under the shops is hardly 312 square feet. In other words he spent Rs. 92. 00 per square ft. which appears to be fantastically high and cannot be accepted. It appears that the appellant has no regard for truth".
( 5 ) WE are in agreement with the above remarks of the Tribunal. We have, therefore, to turn to the evidence of Shri Cbanan Singh, an ar
