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1987 Supreme(P&H) 712

PUNJAB & HARYANA HIGH COURT
R.N.Mittal and D.V.Sehgal JJ.
Bhagwan Singh And Company
Versus
Central Bank Of India, Kaithal
Civil Revision No. 1001 of 1985,
Decided On : NOVEMBER 2, 1987

The terms of the tenancy agreed between the landlord and tenant govern them even after the expiry of the period of tenancy. Therefore, in case there was agreed rent between the parties, the fair rent would be determined on the basis of that rent.

Headnote:

RENT CONTROL - FAIR RENT - AGREED RENT - INTERPRETATION - SECTION 4(2)(B) OF THE HARYANA URBAN (CONTROL OF RENT AND EVICTION) ACT, 1973 - WHETHER RENT FIXED BY PARTIES AFTER EXPIRY OF LEASE PERIOD CAN BE CONSIDERED AS AGREED RENT WITHIN THE MEANING OF SECTION 4(2)(B) - HELD, YES.

Fact of the Case:

Landlord filed a petition for determining fair rent of the property. The respondent contested the petition and pleaded that the landlord had been accepting the rent at the rate of Rs. 400.00 per mensem even after the expiry of the period of lease for many years and, therefore, the fair rent should be fixed on the basis of the said rent, which is the agreed rent.

Finding of the Court:

The Court held that the rent fixed by the parties after the expiry of the lease period can be considered as agreed rent within the meaning of Section 4(2)(b) of the Act. The terms of the tenancy agreed between the landlord and tenant govern them even after the expiry of the period of tenancy.

Issues: Whether the rent fixed by the parties after the expiry of the lease period can be considered as agreed rent within the meaning of Section 4(2)(b) of the Act.

Ratio Decidendi: The Court relied on the definition of 'tenant' in the Act, which includes a tenant continuing in possession after the termination of his tenancy. The Court also relied on the decision in Kai Khushroo Bezonjee Capadia V/s. Bai Jerbai Hirjibhoy Warden, AIR 1949 FC 124, which held that the terms of a Rent Note would be applicable to the tenant holding over after the expiry of the period of lease.

Final Decision: The Court dismissed the Revision Petition and affirmed the finding of the Authorities below that the fair rent of the property is Rs. 526/- per mensem.

Judgment

R.N.MITTAL, J.

1. This Revision Petition has been filed by the landlord against the judgment of the Appellate Authority, Kurukshetra, dt. Nov. 30, 1984.

2. Briefly, the facts are that the landlord-petitioner gave the property in dispute to the Central Bank of India respondent on rent at the rate of Rs. 350.00 per mensem for five years vide Rent Note, dt. Sept. 6, 1965. Later, the rent was enhanced by the Bank to Rs. 400.00 per mensem with effect from May, 1968, but no formal Rent Deed was executed at that time. It is alleged by the petitioner that in view of Sec.4(2)(b) of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (hereinafter referred to as the Act), it is entitled to get the fair rent fixed on the basis of prevailing rent of similar buildings in the locality. Consequently, a petition for determining fair rent of the property was filed by it. The respondent contested the petition and inter alia pleaded that the landlord had been accepting the rent at the rate of Rs. 400.00 per mensem even after the expiry of the period of lease for many years and, therefore, the fair rent should be fixed on the basis of the said rent, which is the agreed rent.

3. The Rent Controller held that Rs. 400.00 per mensem was the agreed rent and determined the fair rent on its basis. Accordingly, it enhanced the rent of the building to Rs. 526/- per mensem. In appeal by the petitioner, the learned Appellate Authority affirmed the judgment of the Rent Controller. It has come up in Revision to this Court.

4. The case was listed before S.P. Goyal, J. The learned Counsel for the petitioner in view of the ratio in Kailash Chander Jain V/s. Mool Raj Sondhi, (1982) 2 Rent LR 274 : (AIR 1983 NOC 67) (Punj and Har) contended before the learned Judge that after the expiry of the term of the lease, the rent originally settled between the parties could not be said to be the agreed rent within the meaning of Sec.4(2)(b) of the Act. The learned Judge doubting the correctness of the view expressed in that case, referred the matter to a Division Bench. That is how, it has been listed before us.

5. The only question that arises for determination is that if a building situated at a place where the provisions of the Act are applicable, had been let out for a specific period, whether the rent fixed by the parties can after the expiry of the period of tenancy, be considered as agreed rent within the meaning of Sec.4(2)(b). It is contended by Mr. R.S. Mittal, learned Senior Advocate, that after expiry of the period of lease, the respondent became a statutory tenant and it ceased to be governed by the terms and conditions contained in the Rent Deed. Therefore, the rent paid by it could not be said to be agreed rent. In support of his contention, he has placed reliance on Kailash Chander Jain s case (supra).

6. We have duly considered the argument, but do not find any substance therein. The word statutory tenant has not been defined anywhere in the Act. However, the word tenant has been defined and it means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of his tenancy. From the definition, it is clear that a tenant after expiry of period of tenancy is entitled to continue in possession of the rented premises. The Act provides protection to such a person. Therefore, in common parlance, he is called a statutory tenant. The Act is silent as to whether the terms of tenancy embodied in an agreement executed by him in favour of his landlord would be applicable to him or not. However, we are of the view, that by implication the terms and conditions of the tenancy agreed between them; which are not against the provisions of the Act, would continue to govern them ever after the expiry of the period of the lease.

7. In this view, we get support from Kai Khushroo Bezonjee Capadia V/s. Bai Jerbai Hirjibhoy Warden. AIR 1949 FC 124, wherein it was held that










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