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2022 Supreme(Online)(KER) 14701
HIGH COURT OF KERALA
A. Muhamed Mustaque, Shoba Annamma Eapen, JJ
DR.PRASANTH – Appellant
Versus
NSS KARAYOGAM NO.3222 – Respondent
RCRev. 62 2021
REJI MATHEW, M. SMT. M.K.MEHRUNISHA BASIMA, SHRI.MATHEW VARGHESE, SRI.N.M.MADHU, SRI.P.P.HARRIS
Competency to sue for rent relief is determined by statutory status, not by legal personality; courts can set rent effective from the date of order rather than the petition date.
Headnote:
Rent Control - Fair Rent Determination - Kerala Buildings (Lease and Rent Control) Act, 1965 - Sections 5, 24 - The Act provides the framework for fair rent determination considering various economic factors while allowing discretion to the courts on the effective date of rent adjustments.
Fact of the Case:
The case involves a dispute over the fair rent fixations for a commercial complex, with both the landlord and tenants appealing decisions made by the Rent Controller and the Appellate Authority to modify the fair rent rates.
Finding of the Court:
The court found that the Appellate Authority's adjustments were reasonable, noting the factors considered in rent determination. However, the court modified the annual enhancement rate and the effective date for rent collection, ruling it should start from the date of the Rent Controller's order.
Issues: Whether NSS Karayogam, a non-legal entity, could file a petition, and the legality of retrospective rent collection from the date of petition versus the date of the Rent Controller's order.
Ratio Decidendi: The competency to sue is based on status defined by law rather than legal personality, and courts have discretion on when to enforce rent adjustments, addressing the economic conditions without imposing retrospective financial burdens on tenants.
Final Decision: The court affirmed the fair rent determination while modifying conditions around annual rent enhancements and the effective date for rent collection.
JUDGMENT
A.Muhamed Mustaque, J
These rent control revisions have arisen from a common order of the Rent Controller and the Appellate Authority fixing fair rent. Commercial complex owned by NSS Karayogam, Alagappa Nagar is in occupation of different tenants. The Rent Controller fixed Rs.6 per square feet as rent for rooms at ground floor, Rs.4 per square feet for rooms on first floor and Rs.3 for rooms on second floor. On a challenge made before the Appellate Authority by the landlord NSS Karayogam, and also by the tenants, the appellate Court modified the order of the Rent Controller by enhancing rate of fair rent at Rs.12, Rs.8 and Rs.5 respectively. Accordingly, the appeal filed by NSS Karayogam was allowed and the appeals filed by the tenants were dismissed. It is to be noted that both the authorities allowed 7.5% annual periodical enhancement on the fair rent fixed.
2. The learned Senior Counsel Sri. Renjith Thampan appearing for the tenants argued that NSS Karayogam is not a legal person and is not competent to institute a petition without recourse to the provisions contained in Order I Rule 8 of the Code of Civil Procedure, 1908. This argument has been raised at the first time in this revision. The Kerala Buildings (Lease and Rent Control) Act, 1965 (for short “Act”) defines the status of landlord as a person who is receiving or to receive the rent of a building, whether on his own account or on behalf of another or on behalf of himself and others or as an agent, trustee, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant. The person referred to herein is not necessarily a legal person recognised under law. The reference to status itself makes a person competent to sue. It is not the personality that defines the competency but the status. The law clearly defines the said status. The competency to sue would be relevant contextually based on statutory provisions. Under the Rent Control Act, status being the criteria, nothing else demands the fulfillment of competency than the status. We, therefore, overrule this belated objection.
3. The learned Senior counsel would further contend that in one of the rent control petitions (RCP No.50/2012), the tenant was inducted only on 9.03.2011 on a monthly rent of Rs.700/-. Since the rent control petitions were filed only in the year 2012, the market rate ought to have been fixed with reference to the rent fixed as above. According to him, the square feet rate in that case is only less than Rs.3/-.
4. We note that this argument is not factually correct. In fact, the tenanted premises was let out in the year 1997 and the enhancement to Rs.700/- in the year 2011 was on existing rate of rent. That cannot prejudice the landlord fixing a fair rent in accordance with law.
5. The Rent control Appellate Authority, while enhancing the fair rent fixed by the Rent Controller, have adverted to the consumer price index, decrease in money value, escalation of price of articles and also the importance of the locality. It also noted the rate of rent of similar buildings in the locality. We need not upset the factual findings made on evidence invoking revisional power. We, therefore, affirm the order of the Appellate Authority.
6. However, we find that both the authorities awarded 7.5% annual periodical enhancement. It is not always safe to order annual increase. The Apex Court inMohammad Ahmad and Another v. Atma Ram Chauhan and Others [2011 (7) SCC 755] had given guildlines for fixing the fair rent. One of the guidelines is the enhancement at the rate of 10% on every three years. In the light of the above judgment, we modify the impugned order and allow only 10% increase in every three years.
7. The Rent Control petition was filed in the year 2012. However, it was decided only on 31.10.2018. Both the authorities allowed fair rent from the date of petition. This will cast huge burden on the tenants to pay the arrears
