Fixation of fair rent to be done on the basis of market value.

ORDER: C.R.P.No.799 of 2002: The landlords, not satisfied by the fixation of fair rent by the Courts below, has filed this revision petition.

C.R.P.Nos.164 and 165 of 2002: The tenant, who failed in his attempt, to question the fair rent fixed by the Rent Controller, successfully in R.C.A.No.422 of 1995 and also failed to resist the R.C.A.No.1157 of 1996 filed by the landlords, is the revision petitioner in both the cases.This order shall dispose of the above three C.R.Ps. For the sake of convenience, the petitioner(s) and respondent(s) concerned in the above C.R.Ps. are described as landlords and tenant.

2. The landlords are the owner of a building bearing door No.37/38, situated in Irusappa Maistry Street, Rattan Bazaar Road, Madras, which measures an area of 1091 sq.ft. The tenant is in occupation of the said premises, agreeing to pay a monthly rent of Rs.350. The landlords, considering the location of the building and the advantages enjoyed by the building commercially, felt that the rent at present being paid by the tenant, is very much low and the same is not in conformity with the fair rent payable under the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, hereinafter called ‘the Act’. In this view, calculating the total cost of the building at Rs.4,19,053 the landlords have claimed fixation of fair rent at the rate of Rs.4,200 per month.

3. The tenant, accepting the tenancy, opposed the application contending, that the value adopted by the landlords and the total cost arrived for the building, are wrong. It is the further contention of the tenant, that the building will not fetch the monthly rent Rs.4,200, as claimed by the landlords and in this view, the tenant prayed for the dismissal of the application.

4. The Rent Controller, on the basis of the materials placed before him, had calculated the total cost of the building at Rs.4,11,764. Since the building is used for non residential purpose, he had fixed the rent at 12% of the annual gross return, which worked out at Rs.4,118. Thus, fixing the fair rent as above, the petition was allowed on 1.9.1993.

5. The tenant aggrieved by the fixation of the fair rent at Rs.4,118, questioned the same before the appellate authority in R.C.A.No.422 of 1995 praying reduction, since according to him, the site value and other values were not properly calculated or fixed.

6. The landlords not satisfied with the fixation of fair rent, preferred R.C.A.No.1157 of 1996, claiming enhancement of fair rent, by filing some additional evidence. The appellate authority, after considering both the appeals together and allowing the document to be marked as Ex.P-4, felt that the land value i.e., site value is not properly fixed by the Rent Controller. On the basis of Ex.P-4, the appellate authority fixed the ground value at Rs.42 lakhs, thereby fixing the site value, for the demised premises at Rs.19,09,250. As far as the depreciated value of the building is concerned, the appellate authority adopted the same value, as fixed by the Rent Controller at Rs.48,098. The appellate authority, calculating the total cost of the building at Rs.19,57,347 had worked out the fair rent at Rs.19,543. In this view, the R.C.A. filed by the landlords had been allowed, dismissing the other R.C.A. filed by the tenant.

7. Neither the tenant nor the landlords have satisfied themselves about the fixation of fair rent and the result is the revision petitions.

8. Heard the learned counsel appearing for the landlords, Mr.G.Sethuraman and the learned senior counsel appearing for the tenant, Mr.T.V.Ramanujam.

9. The only point raised, in these revisions, is the market value of the site adopted by the Courts below. The Rent Controller had fixed the depreciated value of the building at Rs.48,098, which was adopted and accepted by the appellate authority. This value is not challenged by either side. The Rent Controller fixed the ground value for the demised premises at Rs.8,00,000, which was enhanced by the appellate

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