Fair rent fixed by Appellate Authority modified.

Common Order:

Aggrieved by fixation of fair rent at Rs.59,590/-, Tenant has preferred these revisions. The demised premises is situated at No.13, II Line Beach Road, Madras.

2. For convenience, parties are referred in their original rank in RCOP.

3. Revision Petitioner, a registered Company, has become Tenant in respect of the entire premises consisting of ground floor and first and second floors with a total plinth area of about 11,287 sq.ft. on a monthly rent of Rs.20,000/-. The premises was being used for non-residential purpose. Stating that the premises is situated in prime commercial locality, landlords filed Petition under Section 4 of the Tamil Nadu Buildings [Lease and Rent Control] Act, 1960, [in short, the Act], for fixation of fair rent at Rs.65,400/- [Rs.5.79 per sq.ft.].

4. The Respondent/Tenant resisted that application contending that the premises is over 100 years old and the Respondent had to spend considerable amount year after year for maintenance and repairing, to keep the building in a habitual condition. Stating that the building is situated in a narrow street of secondary commercial locality, the Respondent denied that the Petition premises is a Class Type I building. According to the Respondents, the rent of Rs.20,000/-paid, is fair rent and the same has to be fixed as fair rent.

5. Finding that the building is aged 70 years and calculating 1% depreciation, Rent Controller fixed the cost of construction, including amenities at Rs.11,12,334/-. On the basis of Ex.R-3, Rent Controller fixed the ground value at Rs.11,00,000/- and fixed the market value of the site at Rs.26,13,417/- and fixed the fair rent at Rs.37,258/- [Rs.3.30 per sq.ft.].

6. Aggrieved by the rent fixed by the Rent Controller, both landlords and Tenant have preferred appeal. Before the Rent Control Appellate Authority, additional document Ex.P-6 was produced and on that basis, Appellate Authority fixed the market value of

the site at Rs.20,00,000/- per ground and calculated the market value of the site at Rs.47,51,666/-. Calculating the cost of construction, and value of the building at Rs.12,07,335/- Appellate Authority fixed the fair rent at Rs.59,590/-.

7. Assailing the impugned Order, the learned Counsel for the Tenant has inter alia raised the following contentions:-

"Appellate Authority grossly erred in arriving at cost land depending solely on the guideline value and the Sale Deed Ex.P-6 adduced by the landlords in the appellate stage;

"The Appellate Authority erred in accepting the document as evidence in the appellate stage and Respondent/Tenant were not afforded any opportunity to refute the recitals in Ex.P-6 - Sale Deed;

"Ex.R-2 filed by Tenant related to a property which was very proximate to the Petition property and therefore, it had a direct bearing on the value of the Petition property and Appellate Authority erred in rejecting Ex.R-2.

8. Making elaborate submissions, the learned Counsel for the Petitioner has submitted that the market value of the site is not only the value of the land, but other amenities like prime locality, access road and other aspects are to be taken note of and premium is also to be added. It was further submitted that the document Ex.P-6 produced by the landlords is in respect of exact opposite to the demised premises, whereas Ex.R-2 produced by the Tenant is in remote area. It was further submitted that even in the absence of examination of the parties, the Court can very well adopt the valuation in the document produced and the fair rent fixed by the Appellate Authority is reasonable and in accordance with the rules. In support of his contention, the learned Counsel has placed reliance upon the following decisions: -

1994 (2) LW 228 - Rahmath Nish Begum Vs. Vijayakumar; 1988(2) LW 49 - Collector of Madras Vs. Gajendran; 75 LW 111 – Venkataswami Vs. Abdul Rahim & Sons; 70 LW 345 – Rayala Corporation Vs. Syed Bawker and Co.; 69 LW 453 – Basavamma and another Vs. Lakshmikantha Rathn