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2006 Supreme(All) 3370
IN THE HIGH COURT OF ALLAHABAD, LUCKNOW BENCH
RAKESH SHARMA, J.
Zafar Ibrahim - Appellant
Versus
Additional District Judge And Others - Respondents
Decided On : 05-09-2006
The determination of appropriate rent for a property should consider the property's location and unchallenged valuation reports, and the court should properly consider relevant factors in reaching a decision.
Headnote:
Rent Appeal - Rent Enhancement - U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (Act XIII of 1972) - Section 21(8)
Fact of the Case:
The landlord sought enhancement of rent for a commercial property in a prime location. The trial court enhanced the rent, but the appellate court reduced it, leading to a legal challenge.
Finding of the Court:
The court found that the landlord's valuation report and affidavit were unchallenged, and the appellate court did not properly consider them. It held that the rent fixed by the trial court was appropriate based on the statutory provisions and the property's location.
Issues: The main issue was the appropriate rent for the commercial property, considering the landlord's valuation report and the property's location.
Ratio Decidendi: The court emphasized the importance of the property's location and the unchallenged valuation report in determining the appropriate rent. It also highlighted the trial court's proper consideration of relevant factors.
Final Decision: The court allowed the landlord's petition, quashed the appellate court's judgment, upheld the trial court's order, and directed the tenant to pay the enhanced rent from the specified date.
Rakesh Sharma, J.
Both the above-noted writ petitions arise out of a common judgment and order dated 22.12.2003, passed by the Additional District Judge, Court No. 1, Lucknow and involve a common controversy, hence the same are being disposed of by a common judgment.
2. Sri Anil Kumar, advocate appears for the petitioner landlord, Zafar Ibrahim, owner of the building No. 31/37, also known as 14, Mahatma Gandhi Marg, Hazratganj, Lucknow, who has sought enhancement of rent of his aforesaid property, hereinafter referred to as the premises.
3. Sri Sudeep Seth, advocate has put in appearance on behalf of the respondent tenant, i.e., U.P. Cooperative Bank Limited (hereinafter referred to as the Bank), who is having its branch office at the above-mentioned premises in Hazratganj area of the city of Lucknow.
4. The landlord has assailed the judgment and order dated 22.12.2003 passed by the Additional District Judge, Court No. 1, Lucknow in Rent Appeal No. 26/2003, the U.P. Cooperative Bank Ltd. v. Zafar Ibrahim, thereby allowing the appeal of the tenant and modifying the judgment and order dated 27.5.2003 passed by the District Magistrate/Additional City Magistrate I, Rent Control, Lucknow, which had been passed on the application submitted by the landlord u/s 21(8) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (Act XIII of 1972), hereinafter referred to as the Act, seeking enhancement of rent of the premises, having a covered area of 1,280 sq. ft. The District Magistrate/Additional City Magistrate I (Rent Control) had enhanced the rent from a meagre amount of Rs. 147.62 p. per month to Rs. 28,784 per month with effect from 1.8.2000 (i.e., from the date of submission of application for enhancement of rent).
5. As per learned Counsel for the landlord, an application u/s 21(8) of the Act regarding the above premises was submitted by the landlord on 13.7.2000. The premises in question is a two-storeyed building situate in main Hazratganj market, a posh central area of the city of Lucknow. From the very beginning, the building is being used for commercial purposes, to run a bank, which can be defined as a 'public sector corporation' as per definition given in Clause (p) of Section 3 of the Act. The Sub-section (8) of Section 21 of the Act is quoted below:
(8) Nothing in Clause (a) of Sub-section (1) shall apply to a building let out to the State Government or to a local authority or to a public sector corporation or to a recognized educational institution unless the prescribed authority is satisfied that the landlord is a person to whom Clause (ii) or Clause (iv) of the Explanation to Sub-section (1) is applicable:
Provided that in the case of such a building the District Magistrate may, on the application of the landlord, enhance the monthly rent payable therefore to a sum equivalent to one-twelfth of ten per cent of the market value of the building under tenancy, and the rent so enhanced shall be payable from the commencement of the month of tenancy following the date of the application:
Provided further that a similar application for further enhancement may be made after the expiration of a period of five years from the date of the last order of enhancement.
6. The tenant Bank was paying a meagre rent of Rs. 147.62 p. only and it was 'no rent" in the eye of law, hence the enhancement of rent was urgently required. The landlord, in support of his submissions, filed a report dated 18.10.2002 prepared by Sri J.G. Shinde, Engineer, Registered Approved Valuer. The landlord, on the basis of the value of the property (including costs of land and costs of construction) requested the Court to enhance the monthly rent of the premises from 147.62 p. to Rs. 32,000. This calculation was made on the basis of District Magistrate's circle rate as it stood on 1.11.1999. Calculating it on the District Magistrate
