The main legal point established in the judgment is the importance of fixing fair rent based on prevailing rates of rent in the locality for similar accommodation in similar circumstances, as provided in S.5(2) and S.5(3) of the Rent Control Act, to protect both landlords and tenants.

S. Padmanabhan, J.

1. Petitioner in both the original petitions is the tenant and fourth respondent is the landlord. Fourth respondent filed R.C.P. No. 38 of 1983 for eviction on the ground of arrears of rent. Petitioner then filed R.C.P. No. 44 of 1983 for fixation of fair rent. Thereafter, fourth respondent again filed R.C.P. No. 61 of 1983 for eviction on the ground of bona fide need for own occupation also. All the petitions were tried together and disposed of by a common order. R.C.P. No. 44 of 1983 was allowed and fair rent was fixed at Rs. 23 per month, though contract rent was Rs. 300 per month. Other two petitions were dismissed.

2. Fourth respondent filed three appeals. Appeal against R.C.P. No. 61 of 1983 was dismissed, holding that bona fide need is not established. That decision was not challenged in revision and hence it became final. Other two appeals were allowed, holding that contract rent of Rs. 300 per month is the fair rent and allowing eviction on the ground of arrears of rent.

3. Petitioner challenged the orders by filing two revision petitions. Both were dismissed. Hence these two original petitions were filed under Art.227 of the Constitution, for setting aside the decisions of the appellate and revisional authorities and for restoring that of the rent control court.

4. First contention was that in fixing fair rent, appellate and revisional courts did not follow the mandate of S.5(2) of the Rent Control Act and the proviso thereof by ignoring the house tax assessment of the local body for the relevant period, evidenced by Exts. B1 to B4. Decisions in Auto Transport Union (P) Limited v. Cardamom Marketing Co. Limited (1966 K.L.T. 1063), Devassy v. Joseph (1969 K.L.T. 541), Imbichamu v. Imbichi Pathummabi (1975 KLT 138) and Narayana Pillai v. Thomas Kurian (1980 K.L.T. 846) were relied on in support. There cannot be any dispute regarding the propositions of law laid down in these decisions provided house tax was fixed for the relevant period in the concerned register on the basis of the rental value. S.5(3) says that if no property tax or house tax was fixed for the relevant period or if the fixation was not based on rental basis, fair rent shall be fixed after taking into consideration the prevailing rates of rent in the locality for similar accommodation in similar circumstances during twelve months preceding the letting. This was the provision found applicable by the appellate and revisional courts. S.5(2) along with the proviso accepted the monthly rent taken into account by the local body for the relevant period for fixing house tax as the basis and placed some restrictions on the discretion of court only because that could be taken as representing the actual rental. What the legislature wanted to be fixed as fair rent and given to the landlord is the prevailing rate of rent for similar accommodation in similar circumstances during twelve months preceding the letting. In an area where there is dearth of accommodation and high demand, a landlord may be in a commanding position and a needy tenant could be compelled to agree for unconscionable rent. Such a situation is what the legislature wanted to avoid.

5. For that purpose, basis of assessment made by the local body could normally be accepted as correct, because assessment is expected to be made on the basis of the prevailing rates of rent for similar accommodation in similar circumstances. That is why, though in proper cases the court is given discretion to fix fair rent lower than what is assessed by the local body, it is provided that in no case it should exceed 15%. Object of the provision is to protect both landlord and tenant. While landlord must get reasonable rent at local rates, tenant should not be compelled to over pay, in spite of the circumstances, which persuade him to agree for an unreasonable rent. If it is seen that house tax in the concerned register of the local body was not fixed on rental basis mentioned in S.5(2) and the prov