Market value of land is to be applied for fixation of fair rent.

Prayer: Revision against the judgment dated 30.07.1996 made in R.C.A.No.136 of 1994 on the file of Rent Control Appellate Authority-cumPrincipal Subordinate Judge, Madurai, as against the order dated 30.09.1994 made in R.C.O.P.No.131 of 1993 on the file of Rent Controller-cumDistrict Munsif, Madurai.

M. Karpagavinayagam, J.

Which is the criterion that has to be taken into account by the Rent Controller for fixing the fair rent i.e., whether the guideline value, as contained in the revenue records, or, the market value, as per the sale deeds executed at the relevant point of time ?

The above is the question, posed before this Full Bench.

2. Facts :

“(i) The landlord, respondent herein, filed a petition, namely, R. C.O.P.No.131 of 1993 before the Rent Controller under Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, for fixing the fair rent at the rate of Rs.5,850/- per month, on the ground that the contractual rent of Rs.425/- per month is not sufficient.

(ii) The tenant, petitioner herein, resisted the said petition, contending that the contractual rent of Rs.425/- per month itself is sufficient and the claim of the landlord for fixing the fair rent at Rs.5,850/- per month is on the higher side.

(iii) The Rent Controller, during the course of trial, called for the guideline value from the Sub-Registrar's Office and the valuation register from the Municipality, and, on the basis of the reports of the Advocate Commissioner and the Chartered Engineer and also taking the guideline value at Rs.250/- per square feet, fixed the fair rent at the rate of Rs.2,642/- per month.

(iv) The tenant/petitioner, challenging the said fixation of fair rent, filed R.C.A.No.136 of 1994 before the Rent Control Appellate Authority.

(v) After hearing the counsel for the parties, the Rent Control Appellate Authority, by the judgment dated 30.07.1996, dismissed the appeal, confirming the findings of the Rent Controller and fixing the fair rent at Rs.2,642/- per month.

(vi) Assailing the orders of both the Rent Controller and the Rent Control Appellate Authority, this Civil Revision Petition has been filed by the petitioner/tenant before this Court.â€

3. The main point, that has been urged before Justice K.P. Sivasubramaniam, a learned single Judge of this Court (as he then was), by the learned counsel for the petitioner/tenant, is, that the authorities below should not have accepted the guideline value, maintained by the Sub-Registrar's Office, or, the valuation register, maintained by the Municipality, as the basis for fixation of fair rent, and they should have fixed the fair rent only on the basis of the market value of the land, considering the sale deeds executed by the parties, with reference to the land situated in the area, at the relevant point of time.

4. On the other hand, learned counsel for the respondent/landlord, in justification of the orders impugned, brought to the notice of the learned single Judge a decision reported in 1995 T.L.N.J.226 (N. Sulaiman v. R. Ravichandran), rendered by Justice M. Srinivasan (as he then was), wherein it was held that the guideline value could be taken as the basis for fixation of land value.

5. On the side of tenant, a decision reported in 1997 (3) LAW WEEKLY 193 (Srinivasa Gounder v. K.Venkatesan), rendered by Justice S.S. Subramani (as he then was), giving a contrary view, was brought to the notice of the learned single Judge, to the effect that the guideline value, as maintained by the Sub-Registrar's Office, cannot be accepted for fixing the fair rent and the market value of the property and the value, as per the sale deeds executed at the relevant point of time, alone would have to be taken into consideration.

6. In view of the above conflicting decisions, Justice K.P. Sivasubramaniam directed the Registry to post the matter before a Larger Bench, after getting orders of the Hon'ble Chief Justice, as the issue is to be decided by a Larger Bench. The relevant portions of