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2022 Supreme(Online)(KER) 29354
HIGH COURT OF KERALA
A. Muhamed Mustaque, Shoba Annamma Eapen, JJ
SANDEEP
– Appellant
Versus
NSS KARAYOGAM NO.3222 – Respondent
RCRev. 91 2022
REJI MATHEW.M, M.K.MEHRUNISHA BASIMA, MATHEW VARGHESE, N.M.MADHU, P.P.HARRIS
The court established that competency to petition under the Rent Control Act is based on status rather than legal personality, and rent obligations begin at the date the rent is determined.
Headnote:
Rent - Rent Control - Kerala Buildings (Lease and Rent Control) Act, 1965 - Sections 5, 24 - The court affirms the appellate authority's order regarding fair rent determination, emphasizing the necessity of considering prevailing market conditions while providing guidelines for periodic increases and the commencement date for rent fixation.
Fact of the Case:
The landlord and tenants challenged the Rent Controller's orders on fair rent fixation, leading to appeals that modified the original rents based on various economic factors and past rent agreements.
Issues: Whether the landlord was competent to file a petition without adhering to procedural rules and the appropriate date from which fair rent should apply.
Ratio Decidendi: The definition of landlord under the Act permits non-legal persons to file petitions, and the court emphasized that rent obligation begins only once fair rent is fixed, allowing for flexibility in determining effective dates.
Final Decision: The court affirmed the Appellate Authority's order but modified the periodic increase to 10% every three years and the effective date for rent collection to the date of the Controller's order.
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 arre
