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CASE NO.:

Appeal (civil) 1565 of 2001

Special Leave Petition (crl.) 7960 of 2000

PETITIONER:

M/S.SHAW WALLACE & CO. LTD.

Vs.

RESPONDENT:

GOVINDAS PURUSHOTHAMDAS & ANR.

DATE OF JUDGMENT: 27/02/2001

BENCH:

S.V.Patil, D.P.Mohapatro

JUDGMENT:

D.P.Mohapatra,J.

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Leave granted. Whether the revisional order dated

24th December, 1999 passed by the High Court of Madras in

C.R.P.No.2317 of 1996 suffers from any serious illegality

which warrants interference by this Court is the question

for determination in this case. M/s.Shaw Wallace & Co.

Ltd., the tenant in occupation of the premises, has filed

this appeal assailing the aforementioned order of the High

Court. The proceeding was initiated on the application

filed by the landlords Shri Govindas Purushothamdas and

Shri Girdhari Govindas, respondents herein, for fixation of

fair rent of the premises under Section 4 of the Tamil Nadu

Buildings (Lease and Rent Control) Act, 1960 (hereinafter

referred to as the Act). The controversy in the present

proceeding relates to inclusion of the area of 1752 sq.ft.

(approximately) described as platform and henpen as a part

of the building. The Rent Controller and the Appellate

Authority excluded the said area and assessed the fair rent

on the basis of plinth area of 4850 Sq.ft. The fair rent

was calculated as Rs.22403/- per month. In the revision

petition filed by the landlord under Section 25 of the Act,

the High Court set aside the order of the trial Court as

confirmed by the Appellate Authority determined Rs.28,000/-

in place of Rs.22,403/- per month as fair rent. The said

order is under challenge in this appeal. The main thrust of

the submissions made by Dr.A.M.Singhvi, learned senior

counsel appearing for the appellant is that the High Court

erred in including the henpen and platform within the

plinth area of the building. According to the learned

counsel, those structures cannot be said to be a part of the

building and cannot be utilised as such. He further

contended that the High Court should not have interfered

with the concurrent findings of fact recorded by the trial

Court and the Appellate Authority that the area covered by

the henpen and platform is not a part of the building.

Per contra, Shri T.L.V.Iyer, learned senior counsel

appearing for the respondents, contended that in this case

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the High Court was justified in interfering with the order

of the trial Court which was confirmed by the Appellate

Court, since the courts below had overlooked the admission

of the landlord in the pleadings that the plinth area of the

structure in occupation of the tenant is 6602 Sq.ft. (not

4850 Sq.ft.). Before proceeding to consider the merits of

the contentions raised by learned counsel for the parties,

it will be convenient to notice some provisions of the Act

which are relevant for the case. Section 2(2) of the Act,

which defines building reads as follows:

2(2) building means any building or hut or part of

a building or hut, let or to be let separately for

residential or non-residential purposes and includes- (a)

the garden, grounds and out-houses, if any, appurtenant to

such building, hut or part of such building or hut and let

or to be let along with such building or hut, (b) any

furniture supplied by the landlord for use in such building

or part of a building or hut, but does not include a room in

a hotel or boarding house;.

Section 4, which deals with the fixation of fair rent

reads: 4. Fixation of fair rent.- (1) The Controller

shall on application made by the tenant or the landlord of a

building and after holding such enquiry as he thinks fit,

fix the fair rent for such building in accordance with the

principles set out in the following sub- sections. (2) The

fair rent for residential building shall be nine per cent

gross return per annum on the total cost of such building.

(3) The fair rent for any non-residential building shall be

twelve per cent gross return per annum on the total cost of

such building. (4) The total cost referred to in

sub-section (2) and sub-section (3) shall consist of the

market value of the site in which the building is

constructed, the cost of construction of the building and

the cost of provision of anyone or more of the amenities

specified in Schedule I as on the date of application for

fixation of fair rent.

Provided that while calculating the market value of

the site in which the building is constructed, the

Controller shall take into account only that portion of the

site on which the building is constructed and of a portion

upto fifty per cent, thereof of the vacant land, if any,

appurtenant to such building the excess portion of the

vacant land, being treated as amenity.

Provided further that the cost of provision of

amenities specified in Schedule I shall not exceed (i) in

the case of any residential building, fifteen per cent; and

(ii) in the case of any non-residential building,

twenty-five per cent of the cost of site in which the

building is constructed, and the cost of construction of the

building as determined under this section.

(5)(a) the cost of construction of the building

including cost of internal water-supply, sanitary and

electrical installations shall be determined with due regard

to the rates adopted for the purpose of estimation by the

Public Works Department of the Government for the area

concerned. The Controller may, in appropriate cases, allow

or disallow an amount not exceeding thirty per cent, of

construction having regard to the nature of construction of

the building.

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(b) The Controller shall deduct from the cost of

construction determined in the manner specified in clause

(a), depreciation, calculated at the rates specified in

Schedule II. [Emphasis supplied]

The other statutory provisions, which is relevant, is

Section 25(1) which provides for a revision to the High

Court. The provision is quoted hereunder:

25. Revision.- (1) The High Court may, on the

application of any person aggrieved by an order of the

Appellate Authority, call for and examine the record of the

Appellate Authority, to satisfy itself as to the regularity

of such proceeding or the correctness, legality or propriety

of any decision or order passed therein and if, in any case,

it appears to the High Court that any such decision or order

should be modified, annulled, reversed or remitted for

reconsideration, it may pass orders accordingly.ú [Emphasis

supplied]

Schedule I in the Act enumerates the amenities within

the meaning of Section 4 of the Act. From a plain reading

of the statutory provisions quoted above, it is clear that

the expression building includes any building with the

garden, grounds and out-houses appurtenant to such building,

or part of such building let or to be let along with such

building. In view of the expansive definition of the term,

any structure which is part of the premises let out or to be

let out comes within the purview of building. This

position becomes further clear on reading sub-section (4) of

Section 4 wherein it is provided that the total cost

referred to in sub-section (2) and sub-section (3) shall

consist of the market value of the site in which the

building is constructed, the cost of construction of the

building and the cost of provision of anyone or more of the

amenities specified in Schedule I as on the date of

application for fixation of fair rent. In the first proviso

to the sub- section (4) it is laid down while calculating

the market value of the site in which the building is

constructed, the Controller shall take into account only

that portion of the site on which the building is

constructed and of a portion upto fifty per cent thereof the

vacant land, if any, appurtenant to such building, the

excess portion of the vacant land, being treated as amenity.

Reading the two provisions together, it is clear to us

that for the purpose of assessment of fair rent not only the

area on which the building is constructed, but also the land

appurtenant to it subject to the limit prescribed in the

Statute and other structure appurtenant to the main building

and also the amenities described in Schedule I of the Act

are all to be taken into account. Therefore, the contention

raised by Dr.Singhvi that the platform and the henpen are

not to be included in calculating the area for the purpose

of assessment of fair rent, since it cannot be used as a

building, cannot be accepted having regard to the facts

found in the case. The High Court, in our considered view,

did not commit any illegality in including the said

structures within the plinth area for the purpose of

fixation of fair rent.

Coming to the question of revisional jurisdiction of

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the High Court under Section 25 of the Act, the contention

raised by Dr.Singhvi is that the limited jurisdiction vested

in the said Sectin does not permit the High Court to disturb

concurrent findings of fact recorded by the courts below.

From the judgment/order of the High Court it is

manifest that the High Court felt inclined to interfere with

the orders passed by the Courts below mainly for the reason

that the Courts below had ignored the specific averment made

by the landlords in their pleadings that the total plinth

area is 6602 Sq.ft. which was admitted by the tenant to be

true in para 12 of its counter affidavit. The question,

therefore, is the High Court not have the power to disturb

the findings of fact concurrently recorded by the Courts

below in such circumstance?

On a plain reading of Section 25 of the Act, it is

clear that the revisional jurisdiction vested in the High

Court under that Section is wider than Section 115 of the

Code of Civil Procedure. The High Court is entitled to

satisfy itself as to the regularity of the proceeding of the

correctness, legality or propriety of any decision or order

passed therein and if, on examination, it appears to the

High Court that any such decision or order should be

modified, annulled, reversed or remitted for

reconsideration, it may pass such orders accordingly.

In the case of M.S.Zahed vs. K.Raghavan reported in

[1999] 1 SCC 439, this Court, interpreting Section 50 of the

Karnataka Rent Control Act, 1961 which is pari materia to

Section 25 of the Tamil Nadu Buildings (Lease and Rent

Control) Act, 1960, held that it is within the scope of

revisional jurisdiction of the High Court to interfere with

the findings of fact, illegally or incorrectly arrived at.

In the present case, the trial Court and the Appellate

Court had not only ignored the admission of the landlord in

the pleadings but also misread and misconstrued the

provisions of the Act. In the circumstances, the High Court

cannot be faulted for having interfered with the

judgments/orders of the Courts below and modifying the fair

rent as assessed therein. The contention raised by

Dr.Singhvi questioning the jurisdiction of the High Court

has also to be negatived.

In the result, the appeal being devoid of merit, is

dismissed with costs. Hearing fee is assessed at

Rs.10,000/-.

On the prayer made by Dr.A.M.Singhvi, learned senior

counsel, the appellant is granted one month time to pay the

arrear rent due in compliance of the order passed by the

High Court.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURSIDICTION

CIVIL APPEAL NO. 1874 OF 1992

District Magistrate, Allahabad & Anr. Appellants

Versus

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Harminder Pal Singh & Anr. Respondents

J U D G M E N T

RAJENDRA BABU, J. :

A lease was granted for a piece of Nazul land bearing plot No. 8, Nashibpur,

Baskhtiara, Allahabad to one Begum Mehdi Husain for a period of 30 years from August

21, 1940 with the provision of two further renewals of 30 years. In 1983 the Vice-

Chairman, Allahabad Development Authority (ADA) sanctioned a plan subject to

countersigning by the District Magistrate. The lease was renewed on December 4, 1987

in the names of Smt. Jagjit Kaur Gulati, Shri Harminder Pal Singh, Shri Jitendra Singh,

Smt. Bhulari Devi, Shri Rajendra Singh, Shri Pramod Kumar Agarwal and Nazir Faiyaz

Khan. By a letter dated January 22, 1987 all the District Magistrates in Uttar Pradesh

were informed regarding construction of multi storey buildings on Nazul Land to the

effect that the Government has no objection for building up multi storey building in the

Nazul land as per the procedure prescribed by the Government in the order dated October

16, 1986 provided the balance lease period is more than 15 years and that as per the

building construction laws, the construction of the proposed building is permissible. It

was also made clear therein that in case of sale of such flats, the real rent should be

realised after proportionately distributing the rent between the flat owners. Based on this

Government order it is stated that the plan had been sanctioned by the Vice-Chairman,

ADA. When the District Magistrate did not countersign the said sanctioned plan, a writ

petition was filed before the High Court. The High Court directed the Vice-Chairman,

ADA to release the sanctioned plan dated May 20, 1989 in favour of the respondents.

This petition was contested both by the State and by the Vice-Chairman, ADA. The

stand of the appellants is that the respondents filed an application for a plan on March 10,

1989 for the construction of the multi storey residential complex which was sanctioned

by the Vice-Chairman, ADA as communicated to them on May 24, 1989. It was stated

that the plan could be released after countersignature was obtained from the District

Magistrate. The District Magistrate did not countersign the sanctioned plan and when the

matter was pending before him, another order dated November 10, 1989 had been issued

which provided that before allowing residential construction of the group housing the

premium and rent should be realised on commercial rates from the lessee and thus the

respondents had to pay certain sum towards premium and annual rent at certain rate. The

High Court felt that the only objection raised on behalf of the District Magistrate is the

payment of the premium and the rent as provided in the order dated November 10, 1989.

The High Court examined the provisions of the lease deed and is of the opinion that the

sanction of both the Collector and the Board was not essential and it was sufficient if the

Board gave its approval and, in the present case, the Vice-Chairman, ADA had given

such sanction. After analysing the relevant enactments, it took the view that the powers

of the Board stood transferred to different authorities and ultimately vested in the

Development Authority and, therefore, the Vice-Chairman, ADA could grant sanction to

the plan. The High Court, therefore, rejected the contention raised on behalf of the

appellants thereby allowing the writ petition. Hence this appeal by special leave.

The lease deed has been made available to us which has been executed on behalf

of the Governor of the United Provinces on the one part and Begum Mehdi Husain on the

other part to be effective for a period of 30 years from August 21, 1940 which has been

renewed from time to time on certain terms of agreed rent. The lease deed also provides

as follows :-

AND ALSO will within twenty four calendar months next after the

date of these presents at his expense and to the satisfaction of the

Collector for the time being of

Board of Allahabad

in a good substantial and workmanlike manner erect and complete

on such parts of the said premises as are marked out on the plan

hereto annexed a dwelling-house and out-buildings according to a plan

and elevation to be approved by such Collector which

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dwelling-house

Board

and out-buildings shall be of the value of Rs. 5,000/- at least AND

ALSO that no part of the external elevation or plan of such

dwelling-house and out-buildings shall at any time be altered or

varied from the original elevation or plan thereof without the

written consent of such Collector and no other building shall be

erected on

Board

the said premises without the like consent.

This lease deed had been granted for and on behalf of the Government is clear in terms of

Article 299 of the Constitution and it is also clear by the communication No. 278/9-

Nazul-87/485N/86 the Government had instructed all the District Magistrates as to the

manner of construction of multi storey buildings also to be made on Nazul land, to which

we have adverted to. By letter dated January 22, 1987 when that procedure had been

prescribed and the lease itself is under the Nazul Rules framed pursuant to the executive

orders of the Government, we fail to understand as to how any other procedure is

required in matters of this nature. The argument that the permission of the Collector or

the Board is required in spite of orders made by the Government dated January 22, 1987

is untenable. Under the terms of the orders of the Government all the District Magistrates

are bound to act and permit the construction on such land. Such buildings can be

constructed under the Building Construction Laws. Under the Uttar Pradesh Urban

Planning and Development Act, 1973, the development can take place in terms of Section

14 of the Urban Planning and Development Act, 1973 and whenever any development

takes place, sanction of the Development Authority is required. Thus the construction had

to be made only under the Building Construction Laws as stated in the Government order

and there is no other requirement to be complied with. Therefore, it is unnecessary to

engage our attention to the argument advanced on behalf of the appellants that the

sanction of the Collector as well as the Board is required in a matter of this nature. Apa

rt

from the ambiguity arising on account of non-striking off of irrelevant portions in the

lease deed, the Government order makes it clear the manner of construction of multi

storey buildings on Nazul Land, the same can be complied with. If that is so, the District

Magistrates or the Collectors permission though required, it will have to be in terms of

the Government order dated January 22, 1987. Thus the later order issued on November

10, 1989 had no application to the case since sanction had been given to the plan by the

Vice-Chairman, ADA on May 24, 1989. Thus the view taken by the High Court is

unexceptionable and calls for no interference.

Therefore, we dismiss this appeal.

..J.

[ S. RAJENDRA BABU ]

..J.

[ SHIVARAJ V. PATIL ]

NEW DELHI,

MARCH 2, 2001.

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