Appeal filed by tenant to set aside order of fixation of fair rent allowed.

ORDER.-These two civil revision petitions arise out of the proceedings initiated by the landlord in R.C.O.P. No. 290 of 1968 in the Court of the learned Rent Controller-cum-First Additional District Munsif, Madurai Town for fixing the fair rent for the building bearing door No. 57 in Madurai Town, Ward No. 18, South Avani Moola Street, which is in the occupation of the respondent as a tenant on a monthly rent of Rs. 125. The learned Rent Controller allowed the application in part and fixed the fair rent at Rs. 205 per annum. Against that order of the learned Rent Controller the landlord filed C.M.A. No. 355 of 1970 for enhancement of the fair rent and the tenant filed C.M.A. No. 344 of 1970 for setting aside the order of the Rent Controller fixing the fair rent. The appeal filed by the tenant was allowed and the anneal filed by the landlord was dismissed and hence these two revision petitions have been filed.

2. The petition by the landlord for fixing the fair rent was filed under section 4 of the Madras Buildings (Lease and Rent Control) Act (XVIII of 1960), rules 12 and 14 were framed under that Act laying down guidelines for fixing the fair rent. In K. C. Nambiar v. IV Judge of the Court of Small Causes1the Supreme Court struck down rule 12 and in doing so observed as follows:

" The Legislature has used in sub-section (3) (b) (i) the expression ‘cost of construction’ and in sub-section (3) (b) (ii) ‘market value’. It is difficult to accept that the Legislature has used two different expressions for providing that the market value of the building and market value of the site shall form components of the total cost of buildings. In Black’s Law Dictionary, 4th Edn., at page 415 — ‘Cost’ it is stated ‘means the amount originally expended in performing a particular act or operation, or for production or construction, as of a building. ‘There is, not infrequently great difference between the cost of an article and the value of an article. Cost of an article in terms of money is what the owner has expended to obtain it; the value of the article is ordinarily its market value in a market actual or hypothetical. It may be conceded that the expression ‘cost’ is sometimes used as meaning the value of an article. But the expression ‘cost of construction’ in sub-section (3) (b) (i) for determining the first component when used in juxtaposition with the expression ‘market value’ in sub-section 3 (b) (ii) is, in our judgment, used to denote not the market value but the cost of the original construction. There are inherent indications in clauses (i) (ii) and (iii) of sub-section (3) (b) which go to prove that the expression ‘cost of construction’ was not intended to mean the market value. The expression ‘cost of building’ includes not only the expenses incurred for construction of the building but also the value of advantages which the site of the building offers, such as, accessibility to markets, nearness to a railway station, special amenities, and features, of architectural interest. If the expression ‘cost of construction’ is equated with the ‘market value’, it would necessarily include the special advantages of its situation, amenities and its architectural features. But the Legislature has provided for including in the cost of the building apart from the cost of construction, the value of allowances for favourable situation, amenities and architectural features..‘‘

3. Amenities such as air-conditioning, lifts, electric fans, tubelights, number of electric points, fans, ventilators, electric pump for water, flush-outs, fixed wash basins, stair cases, outhouses, cattle-sheds, garden or vacant ground appurtenant to the building enjoyed by the tenant and usufructs of trees, if any, enjoyed by the tenant will also be included in the cost of the building as allowances. But many of these amenities would be taken into account in determining the market value of the building. The learned Advocate-General appearing on behalf of the State of Madra

Click Here to Read the rest of this document