Back
2018 Supreme(Del) 2814
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J. MEHTA, J.
M/s Atma Ram Properties Pvt. Ltd. – Appellant
Versus
M/s Allied Motors Ltd. and Others – Respondents
RFA No. 700 of 2018
Decided On : 27-08-2018
For the Appellant : Mr. Amit Sethi.
The main legal point established in the judgment is that under the Delhi Rent Control Act, rent cannot be increased retrospectively, and property tax payable by a tenant does not become part of the rent.
Headnote:
Rent Control Act - Jurisdiction of Civil Court - Section 6A, Section 8 - The court discussed the provisions of Section 6A and Section 8 of the Delhi Rent Control Act, 1958, and highlighted that the rent could not have been increased retrospectively for dozens of years. It also emphasized that property tax payable by a tenant does not become part of the rent, as per the judgment of the Supreme Court in Atma Ram Properties Pvt. Ltd. vs. The Oriental Insurance Co. Ltd. (2018) 2 SCC 27.
Fact of the Case:
The appellant filed a suit for possession of the premises and mesne profits, claiming that the premises fell outside the protection of the Delhi Rent Control Act due to increased rent and property tax payable by the tenant.
Finding of the Court:
The court found that the appeal had no merit and dismissed it. It held that the rent could not have been increased retrospectively and that property tax payable by a tenant does not become part of the rent.
Issues: The issues revolved around the jurisdiction of the civil court in a suit for possession and mesne profits under the Delhi Rent Control Act, based on increased rent and property tax payable by the tenant.
Ratio Decidendi: The court's decision was based on the interpretation of Section 6A and Section 8 of the Delhi Rent Control Act, emphasizing that rent could not be increased retrospectively and that property tax payable by a tenant does not become part of the rent.
Final Decision: The appeal was dismissed, affirming that the civil court did not have jurisdiction in the case, as the rent could not have been increased retrospectively and property tax payable by the tenant did not become part of the rent.
VALMIKI J. MEHTA, J.
CM No. 34266/2018 (Exemption)
Exemption allowed subject to just exceptions.
CM stands disposed of.
RFA No. 700/2018 & CM No. 34265/2018 (stay)
1. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the plaintiff/landlord in the suit impugning the Judgment of the Trial Court dated 2.8.2018 by which the trial court has rejected the plaint under Order VII Rule 11 CPC and held that the civil court has no jurisdiction to entertain the suit for possession and mesne profits filed by the appellant/plaintiff. In essence the trial court has held two aspects against the appellant/plaintiff/landlord. Firstly it is held that the amount of house tax payable by a tenant will not become part of the rent, and once that is not part of the rent, the rent payable by the respondent/defendant/tenant cannot be said to have increased beyond Rs. 3,500/- per month for the suit/subject premises ceased to have protection under the Delhi Rent Control Act, 1958. Secondly, it was held by the trial court that when a legal notice is given under Section 6A of the Delhi Rent Control Act for increasing of the rent, the rent will be increased prospectively by 10% and that it cannot be that by giving one legal notice rent can be retrospectively increased for dozens of years.
2. The facts of the case are that the appellant/plaintiff filed the subject suit for possession with respect to the suit premises being a Showroom No. 4 (sometimes referred as Showroom No. 5), alongwith the Quarter No. 11 and 45, Atma Ram Mansion (Scindia House), Connaught Circus, New Delhi (admeasuring approximately 8849.33 sq. ft on the ground floor and mezzanine floor of the property) and for mesne profits. The cause of action which was pleaded in the suit was that the appellant/plaintiff/landlord purchased the suit premises by a registered Sale Deed dated 31.5.1980 and the respondent no. 1/ defendant no. 1 was an old tenant in the suit premises. Appellant/plaintiff has pleaded that it sent a Legal Notice dated 13.6.2007 for increasing the rent under Section 6A of the Delhi Rent Control Act whereby the rent was to be increased from the existing rent of Rs.1802.37 per month to Rs.3193/-. It was then pleaded in para 9 of the plaint that the respondent no. 1/defendant no. 1/tenant had let out the part of the tenanted premises to respondent no. 3/defendant no. 3/partnership firm of which defendant nos. 4 and 5 are partners, and this illegal sub tenant defendant no. 3 was paying a sum of Rs.345/- per month to respondent no. 1/defendant no. 1 through cheques, and thus the total rent for the suit premises became Rs. 3193 plus Rs. 345 i.e. Rs. 3538/- and hence the rent of the suit premises was going beyond Rs. 3500/- per month, therefore by virtue of Section 3(c) of the Delhi Rent Control Act the suit premises fell outside the protection of the Delhi Rent Control Act. It was additionally pleaded by the appellant/plaintiff that the respondent no. 1/defendant no. 1 is liable to pay the house tax in terms of the Lease Agreement entered into by the respondent no. 1/defendant no. 1 with the erstwhile landlord on 31.7.1946, and therefore when the house tax would be added to the rent of Rs. 1802.37 per month or to Rs. 3193/- per month then the suit premises would fall outside the protection of the Delhi Rent Control Act. Though no figure of house tax was pleaded in the plaint, but in the replication filed by the plaintiff to the written statement of the respondent/defendant, it was pleaded that the property tax per year came to Rs. 16,46,034/- per annum i.e. Rs. 1,37,170/- per month, and therefore on this basis it was contended that the rent being more than Rs. 3500/- per month, the suit premises will no longer have protection of Delhi Rent Control Act and hence the civil suit for possession and mesne profits was liable to be decreed in favour of the appellant/plaintiff/ landlord and against the respondent no. 1/defendant no. 1/tenant.
