When Madras Act (XVIII of 1960) was passed, section 30 was enacted therein exempting from the operation of the Act any non-residential building, the rental value of which on the date of the commencement of that Act as entered in the tax assessment book of the municipal council or other local body exceeded Rs. 400 per mensem. This provision was amended by Madras Act (II of 1962) substituting in the place of the rental value entered in the tax assessment book, the monthly rent paid by the tenant. This exemption was removed later by Act (XI of 1964.) In between the dates of the passing of the two latter Acts, the landlords of certain premises, the respondents in this petition, filed an application before the House Rent Controller — H.R.C. No. 2942 of 1963 — for the fixation of fair rent. The tenant came to this Court contending that since the tenancy was under a contractual arrangement by means of a registered lease deed for a term of years, the House Rent Control Act could not apply to this tenancy. Apart from this general contention, it was also claimed that the monthly rental payable by the tenant was in excess of Rs. 400, so that by reason of section 30 of the Act as amended by Act (II of 1962), the Act could not apply to such a tenancy. On the first of these questions whether the Rent Control Act could govern contractual as well as statutory tenancies, the matter was referred to a Full Bench, and the Full Bench delivered its opinion that the Madras Act constituted a self-contained code, and notwithstanding the existence of a contractual tenancy for a term, the provisions of the Act would apply. [Vide Rival & Co. v. Ramachandran1]. Thus, only the second of the questions referred to above calls for examination in this writ petition.

The contention on behalf of the petitioner is that on the date of the application made by the respondent-landlords, tenancies in respect of which the tenant was paying a monthly rent in excess of Rs. 400 stood outside the scope of the Act, for section 30 laid down that nothing contained in the Act shall apply to such tenancies. It is claimed accordingly that on the undeniable facts presently to be set out the rent of the premises is in excess of that figure, and the petition which was filed during the period when this exemption was operative was not maintainable. It is upon this question whether the rent of the premises is in excess of the sum of Rs. 400 that the present controversy has arisen.

Certain facts require to be stated. Under a demise of lease of the year 1935, the then owner of the property leased out the premises described as No. 2, Poonamallee High Road, Madras, to the petitioner, the tenant, for a period ending with 30th April, 1969. Clause (3) fixed the rent at Rs. 225 per mensem. The lessees were permitted to erect structures, and to make additions or alterations after notice to the lessor. The lessees could on the termination of the lease remove the new erections put up by them, unless by agreement between the parties the lessor elected to pay compensation for such additions and alterations: clause (10) provided that the lessor shall execute all repairs necessary to the buildings standing on the premises when the lease comes into force, and towards the cost of such repairs, the lessees were to contribute an annual sum of Rs. 225. Under clause (11) the lessor undertook to pay all the charges and taxes of a public nature and the lessees were to contribute an annual sum of Rs. 220 towards such charges and taxes. There was a clause enabling the continuance of the lease for a further terms of fifteen years. According to the petitioner, the tenant, during the currency of this lease, it has spent considerable amounts and made extensive additions, improvements and alterations to the property. In 1946, the then owner claimed a 50 per cent, increase in the rental on the ground that the Rent Control Act applied to the lease. After some correspondence, in which the tenant disputed it