The court affirmed that landlords can seek fixation of fair rent under statutory law even during the existence of a long-term lease agreement.

ORDER :

1. The revision petitioner Bank, aggrieved by the order fixing fair rent under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act (Act 18 of 1960) (in short 'Act') and confirmed by the Appellate Authority has filed the instant revision petitions.

2. I have heard Mr.V.Raghavachari, learned Senior Counsel, assisted by Mr.M.Arun Kumar for M/s.Sampath Kumar Associates, learned counsel for the petitioner/tenant and Mr.Roshan Balasubramanian, learned counsel for the respondent/landlord.

3. The brief case of the respondent as landlord before the Rent Controller is as follows:

The respondent owned land of an extent of 27,131 sq.ft, together with building constructed upon the said land. The petitioner Bank is a lessee who was supposed to enter into a 99-year lease agreement. According to the respondent, the petitioner Bank was liable to pay an annual rent of Rs.4,71,000/- to the respondent. It is also the case of the respondent that the Bank had paid Rs.46,50,000/-, which carries interest at 10% per annum. The premises is situated in a commercial location in the City and the premises itself is a premier commercial complex where the land value is approximately 2 crores per ground. Hence, the respondent sought for fair rent to be fixed for the said petition premises.

4. The case of the petitioner Bank before the Rent Controller is as follows:

The Bank had taken the premises based on the letter of offer dated 24.11.1980. The ground floor was taken at the rate of Rs.395 per sq.ft and the first floor was taken at the rate of Rs.295 per sq.ft., for a contractual period of 99 years. The petitioner has paid a sum of Rs.35,000,000 lakhs on 24.11.1980 as against Rs.39,03,486.40 and the balance was payable only at the time of registration of the lease deed.

5. The petitioner Bank has also deposited Rs.46,50,000/- to which deposit, they are entitled to 10% interest. The parties have specifically agreed upon payment of an annual lease rent of Rs.6,000/- alone, for 99 years and the interest accruing on the deposit made by the petitioner Bank would be adjusted as against rents payable. Therefore, the petitioner Bank contended that the respondent is not entitled to invoke Section 4 of the Act, during the contract period of 99 years. It was also contended by the petitioner Bank that the premises does not contain any facilities and there is heavy vehicular traffic in Mount Round and there are no locational advantages as claimed by the respondent/landlord.

6. On enquiry, the Rent Controller, finding that despite several opportunities granted to the petitioner Bank, no evidence was let in and even thereafter, despite adjourning the fair rent petition for arguments to be heard on the side of the petitioner Bank, no arguments were advanced and hence the Rent Controller proceeded to fix the fair rent at Rs.86,460/- per month on available materials.

7. Aggrieved by the fair rent fixed, both the petitioner as well as the respondent preferred Rent Control Appeals. The petitioner Bank filed RCA.No. 1301 of 2004 and the respondent/landlord filed RCA.No. 608 of 2005. The Appellate Authority, in and by a common judgment disposed off the Rent Control Appeals finding that the petition for fixation of fair rent was maintainable and as regards the quantum, the Appellate Authority fixed the fair rent at Rs.2,53,161.97 payable for the period beginning the filing of the RCOP up to March 2002 and at Rs.3,00,665/- from the period April 2002 to March 2003 and Rs.3,22,186/- from the period April 2003 to July 2007 and Rs.5,48,100/- for the period August 2007 onwards. The appeal filed by the petitioner Bank was dismissed and the appeal prefer