The fair rent under the Buildings (Lease and Rent Control) Act should be determined by considering all relevant facts, including the rent on the basis of which the property tax or the house tax for the building was fixed at the time of letting, and should not exceed by more than 15% of the monthly rent on the basis of which the property tax or house tax was fixed two years before the application.

1. This revision petition has been referred to us by our learned brother Balagangadharan Nair J. The reference order sets out the facts and the question that arises for decision and, therefore, we will extract the same in full.

"This revision by the tenant arises out of a proceedings brought by the respondent-landlord under the Buildings (Lease and Rent Control) Act for fixation of fair rent.

2. Petitioner is holding a room and an adjacent veranda under the rent deed Ext. Al, at a monthly rent of Rs. 26/-. He has admittedly sub-let them to two parties on Rs. 45/- and Rs. 30/- a month, aggregating to a rent of Rs. 75/-. While so, the Corporation of Calicut, within whose area the premises are situate, revised the property tax assessment with effect from 1965 (Ext. A2 being the relevant extract) and assessed the premises to tax, on the basis of annual rental value of Rs. 427/- and Rs. 300/-, totalling Rs. 727/- which works to a monthly rent of Rs. 60.58. The respondent brought the petition in 1968 asking for fixation of fair rent at Rs. 60.58 and an addition of the maximum permissible increase of 50% a month. To this the petitioner took various defences and contended that there was no ground to revise the contractual rent of Rs. 26/-.

3. The Rent Control Court dismissed the petition holding that fair rent' cannot be fixed on the basis of Ext. A2 or on the basis of the sub-rent which the petitioner was collecting from his tenants.

4. On appeal by the respondent, the learned Sub Judge (the appellate authority) took a different view, holding that Ext. A2 can be taken as a basis for fixing fair rent. He accordingly fixed the fair rent at Rs. 60.60, rounding off Rs. 60.58.

5. From this judgment, two revisions were taken to the District Court Revision 85 of 1970 by the respondent claiming an enhancement of 15% of the rent fixed by the Sub Judge and Revision 104 of 1970 by the petitioner claiming that the contractual rent should not have been enhanced at all. The learned District Judge held that the appellate authority was justified in fixing fair rent on the basis of Ext. A2 but found that there was no case for allowing the 15% increase. The learned judge however noticed that under S.102 of the Calicut City Municipal Act, the annual value of the building is the gross annual rent less a deduction of 10% thereof for repairs etc. It was held that this deduction should be excluded for fixing fair rent and that so computed the annual rent came to Rs. 808.88 which worked out to Rs. 67.40 a month. The learned District Judge fixed this as the fair rent and on that finding allowed the respondent's revision in part and dismissed the petitioner's revision.

6. Mr. Velayudhan Nair for the petitioner raised a short point in support of the revision. Now sub-s. (1) of S.5 empowers the Rent Control Court to fix fair rent after holding such enquiry as it thinks fit. Sub-s. (2) provides that in fixing fair rent the court shall take into consideration the property tax or house tax (really the monthly rent on the basis of which such tax is fixed) at the time of letting, in the property tax or house tax register of the local authority within whose area the building is situated. The proviso which follows, enacts in substance and so far as material, that the fair rent may in proper cases be lower than, but shall in no case exceed by more than 15% the monthly rent on the basis of which the property tax or house tax for the building prevailing two years immediately before the date of the application, was fixed. Mr. Velayudhan Nair pointed out that while sub-s. (1) permits such enquiry as the court thinks fits, sub-s. (2) obliges the court to take into consideration the monthly rent on the basis of which the house tax was fixed at the time of letting in. Sub-section (2), it was contended, indicates the primary or basic factor that the court should take into consideration, in fixing the fair rent. According to counsel, the proviso which refers to the monthl