Raja Bahadur Motilal Bombay Mills
Ltd.& ANR Vs. M/S. Govind Ram Brothers (P) Ltd. & ANR  INSC 50
(12 March 1974)
SARKARIA, RANJIT SINGH SARKARIA, RANJIT SINGH
CITATION: 1974 AIR 1708 1974 SCR (3) 577 1974
SCC (2) 178
Bombay Rent Hotel and Lodging House Rates
Control Act (57 of 1947), s. 11 (1) (e)--Applicability of Principle of
On September 1, 1940, the basic date under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the properties
in dispute were parts of a larger entity comprised in a single lease. In March
1948, the respondent took a fresh lease of the properties in dispute,
Thereafter, the respondent filed applications in the court of Small Causes for
fixation of standard rent on the basis of apportionment. The trial court
dismissed the applications holding that the premises, on account of structural
alterations, had undergone such a change that they could no longer be
identified with the property that existed in September 1940; that the mode of
determining the rent by apportionment was not available to the tenant; and that
there was no sufficient material for ascertaining the standard ' rent in any
other way. This order was set aside in revision and the case was remanded to the
After remand, the trial court held that
except with respect to three items of the premises in dispute, which were new
Structures, there was no change of identity in the rest of the properties; that
the new structures belonged to the respondent who was consequently liable to
pay rent only for the land underneath; and on that basis, applying the
principle of apportionment, fixed the standard rent. With respect to one item
the trial court took into consideration the investment made by the landlord
inclusive of the, cost of structures, estimated the value of the land
underneath as in 1940, and fixed the standard rent on that basis. In revision
it was held that the ownership of the three new structures also vested in the
appellant, that he was entitled to get a fair return on that investment also
and that the value of the land should be taken as in 1948 and not in 1940, and
the standard rent was fixed on that basis.
Further revisions to the High Court were
dismissed with some arithmetical corrections.
In appeal to this Court,
HELD : The principle of apportionment is
applicable to the fixation of standard rent of the premises in dispute and the
principle had been rightly invoked and applied. [584 F-G] (a) One of the
primary objects of the Act is to curb exaction of extortionate rent. Section II
(1) empowers the Court to fix the standard rent at such amount, as having
regard to the provisions of the Act and the circumstances of the case, the
Court deems just, If on the basic date the premises were not let out separately
but were a part of the subject matter of a larger demise then s. 11(1)(c) comes
into operation. If the standard rent of a whole was a specific amount it stands
to reason that the standard rent of a part or sub-division of the whole should
not ordinarily exceed that amount. Therefore, if in the circumstances of a
given case the court feels that for securing the ends of justice and giving
effect to the provisions and policy of the Act it is reasonably necessary and
feasible to work out the standard rent by apportionment, it can legitimately do
so. The language of the Act consistently with its scheme and in built policy is
elastic enough to permit the fixation of standard rent on apportionment basis.
At the same time, caution and circumspection are necessary in applying the
principle to the particular circumstances of a case. For example, if after the
material date, the landlord has made investments and improvements in the
premises it will be just and reasonable to take that factor also into account
and give him a fair return on such investment. Similarly, in apportioning the
rent, the Court must also consider other relevant circumstances and advantages
enjoyed by the tenant of the premises of which the standard rent is in question
as compared with the rest 578 of the Property in which it is
comprised.Further,where after the basic date the premises completely changed
their identity, apportionment as a method of determining just standard rent
loses its efficacy and may be abandoned altogether.[583E-585C] Narayanlal
Bansilal v. Venkatrao Anant Rai 67 Bom. L.R.
352, Bainbridge v. Congdon (1925) 2 K.B. 261
and Fox v. Bishop of Chester (1824) 2 B & C 635 at 655 referred to.
Dhanrajgirji Naraingirji v. W. G. Ward (1925)
L.R. 877 and Bata Shoe & Co. Ltd. v.
Narayan Das Mullick and Ors. not approved.
(b)(1) The findings of the trial court before
remand had been set aside in the order of remand, and there is nothing wrong or
unfair or untenable in the method adopted by the lower courts after remand
which would warrant interference by this Court in exercise of special
jurisdiction under Art.
136 of the Constitution. [587D-G] (ii) The
question whether certain property has changed its identity after the basic date
is largely one of fact. The factual conclusions arrived at by the revisional
court and High Court are not shown to be perverse or manifestly unjust" It
was with regard to the unchanged old properties that the High Court and the
Revisional Court mainly adopted the method of apportionment. Even so, they
allowed the landlord a fair return over the amount invested by him towards the
cost of flooring, ceiling and other fixtures.
since the rent of the old unchanged premises
was fixed mainly on apportionment basis, the courts rightly did not think it
necessary to take the value of their sites separately into computation in
fixing the standard rent.
[588 B-D] (iii) As regards the new structures
the courts below, in capitalising their value did take into account the value
of the land and took the market value of the land as in the year 1948. [588B]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1186-1188 of 1972.
Appeals by special leave from the Judgment
and Order (fated 12/ 13/15th October, 1971 of the Bombay High Court in Special
Civil Application Nos. 555, 556 of 1967 and 72 of 1968.
K. S. Cooper, M. K. Shah, P. H. Parekh and
Sunanda Bhandare, for the appellants.
B. N. Lokur, Rameshwar Nath, for respondent
Subodh Markendeya, for Respondent No. 2.
The Judgment of the Court was delivered by
SARKARIA, J.-Whether the principle of apportionment is applicable to the
fixation of standard rent of a premisesunder the Bombay Rents, Hotel and
Lodging House Rates Control Act, 1947 (for short, the Act); if so whether on
the facts of the case, the principle has been rightly invoked--is the two fold
question that falls for decision in these three appeals by special leave
directed against the judgment of the High Court of Judicature at Bombay.
The material facts are as under A big
compound, measuring 11,150 sq. yards, at 156 Tardeo Road, Bombay, belonged to
Raja Bahadur Moti Lal Mills, Ltd., Bombay, appellant No.1. The Mills were
shifted from these premises in the year 1930. In 1932, the whole of this estate
including the structures standing on. a part of it, was let out to Sound
Studios Ltd. Between the years 1932 and 1940, some part of it was sub-let by
Sound Studios to Sheraj Ali, who was the proprietor of M/s. Famous 579 Cine
Laboratory and another part to Neon Signs (India) Ltd., and the rest of the
estate continued to be with Sound Studios. Thereafter, Sound Studios went out
of the picture and the whole estate was let out to National Studios Ltd. on
October 23, 1940 at a monthly rent of Rs. 1700/for a period of two years.
In July 1941, National Studios surrendered
their lease and Sheraj Ali became a direct tenant under appellant 1 in respect
of the premises in his possession, called for the sake of identification, 983/1
(whole) and 983/2 (Ground floor). On December 1, 1941 and again in November
1942, Sheraj Ali took on rent additional portions of this estate so that his
original rent, which was Rs. 400/-, was first increased to Rs. 600/and then to
Rs. 700/and thereafter in November 1942 to Rs. 875/-. By November 1947, Sheraj
Ali was paying Rs. 1200/per month as rent for the premises demised to him
including some new structures which had been built.
Sheraj Ali had taken a loan from M/s. Govind
Ltd., Respondent 1 on the security of his
Film Studio Equipments. He failed to repay the loan. Thereupon, Respondent 1
instituted a suit for recovery of the amount and obtained a decree from the
High Court,. on February 27,1948. As a result of the High Court's decree, the
right, title and interest of Sheraj Ali in the mortgaged property were assigned
to Respondent 1. Respondent 1, in consequence, took a fresh lease on March
19,1948 from appellant No. 1 of the, properties (called for identification)
983/1 to 983/12, which were in the tenancy of Sheraj Ali', at a contractual
rent of Rs. 1228/p.m. On the same date, Respondent 1 executed another lease in
respect of three rooms in the same premises (marked for identification as) 984,
in favour of appellant 1, on a monthly rent of Rs. 750/Respondent 1 failed to
pay the contractual rent, regularly, which fell into arrears which were not
cleared despite the pressing demands made by the Receiver. On March 13, 1954
the Receiver wrote to Respondent 1 threatening to take legal proceedings for
the recovery of the rent. This Receiver, who is now appellant No. 2, had been
appointed by the High Court in Suit No. 454 of 1949 instituted by appellant 1
against the Insurance Company On April 14, 1954, two applications were filed in
the Court of Small Causes by Respondent 1 for fixation of standard rent in respect
of the premises comprised in the said two leases one application, R.A.N.
983/54, relates to properties 983/1 to 983/12, and the other (R.A.N. 984) to
It was alleged in the applications that since
on September, 1, 1940, the entire estate, including the properties in question.
had been let out on a monthly rent of Rs. 1700/-, standard rent of the premises
it question should be fixed on the basis of apportionment In particular, it was
pleased that fair rent of Rs. 983/1 to 983/12 should be 1/8th of Rs. 1200/which
was later corrected as 1700/-. On the same basis it was alleged in the second
application, that fair rent of premises 984 should be Rs. 75/p. m.
580 The appellants resisted these
applications and averred in R. A. N. 983/54, that several entirely new
structures had been built and substantial alterations made in most of these
structures between the years 1940 and 1948, as a result whereof the property
had lost its identity, and consequently, fair rent could not be fixed on apportionment
On June 11, 1958, Respondent 1 made an
application for amendment of the Standard Rent Application (R.A. N. 983154) for
adding an alternative ground based on the value of the land and cost of
construction so that in the event of the court holding on the preliminary issue
in favour of the appellants, the standard rent could be fixed on the basis of
the valuation of the land and the construction. This application was
On July 30,1958 Respondent 1 made an
application for amendment of his R. A. N. 984 of 1954 on lines similar tothat
in R. A. N. 983/54. It was also dismissed by an order, dated July 31, 1958.
At the stage of arguments on December 4,
1958, Respondent 1 moved another application for amendment and addition of the
plea that they were the owners of the structures in premises 983/10, 983/1] and
983/12. The second amendment was not sought to be made in the other application
R. A. N. 98411954 relating to property 984. This prayer was also declined.
The trial court (Samson J.) by its judgment
dated April 2, 1959, found that the premises in question on account of
structural alterations had undergone such a change that they could no longer be
identified with the property that existed in September 1940 and that the mode
of ,determining rent by apportionment was not available to the tenants. In the
result he dismissed the applications, adding "there is no sufficient
,material to ascertain the standard rent in any other way '.
Against those orders, Respondent 1 filed a
revision petition under s. 129 (3) of the Act before the Revisional Court of
Small Causes, Bombay, which accepted, the same set aside the order of the trial
judge, allowed the amendment and remanded both the applications for fixation of
fair rent to the trial court.
Against this remand order, dated August 8,
1960, of the Revisional Court, the appellants preferred two Civil Revisions to
the High Court of Bombay.
During the pendency of those Revisions, the
trial court allowed the amendment and proceeded to decide the entire matter
afresh. These facts were brought to the notice of the High Court, which,
however, ,dismissed the revision petitions by a judgment dated February 3, 1961
holding that the first Revisional Court had, in fact, remanded the entire
matter for trial de novo, after rightly allowing both the amendments.
After the remand, the trial court by its
judgment, dated April 25, 1961 held that except 983/10, 983/11 and 983/12,
which were new structures there was no change of identity in the rest of the
properties 581 i. e. 983/1 to 983/9; that new structures 983/10, 983/11 and
983/12 belonged to Respondent 1 who was consequently, liable to pay rent only
for the land underneath; that the cost of repairs of the properties, 983/8 and
983/9 after they had been destroyed by fire, was mainly borne by Respondent 1,
the landlord's contribution being Rs. 8,500/only. Applying the principle of
apportionment, it fixed the standard rent of the properties 983/1 to 983/12 at
Rs. 400/p.m. subject to permitted increases after 1954.
Regarding the premises 984(in R.A.N.984/54),
the trial court gave are turn on the investment of Rs.40,000/-made by the
landlord inclusive of the cost of structure and the value of land underneath at
Rs. 30/per sq. yard (as that of 1940) and fixed the standard rent at Rs. 386/p.
m. subject to permitted increases after 1946.
Aggrieved by these orders of the trial court,
appellants and Respondent 2 filed two revision applications under s. 129 (3) to
the Revisional Court of Small Causes which by its judgment, dated September 30,
1964, substantially upheld the findings of the trial court, inter alia with the
exceptions : (i) that the ownership of the new structures 983/10, 983/11 and
983/12 vested in Appellant 1, who was entitled to get a fair return on that
investment; (ii) that the value of the land "married" to the new
structures 983/10, 983/11 and 983/12, and 984/54, should be taken at Rs. 50/per
sq. yd., i. e. as of 1948 and not as of 1940 as had been done by the trial
court on remand. In the result, the standard rent in R.A.N. 983 was raised to
Rs. 981 /and in R.A.N. 984 to Rs.411/-p.m.
To impugn the decision, dated September, 30,
1964, of the Revisional Court, the parties preferred six Special Civil
Applications under Art. 226/227 of the Constitution to the High Court. By a
common order, a learned single Judge of the High Court dismissed these
applications except that he corrected some arithmetical errors and, in
consequence, fixed the standard rent of properties 983/1 to 983/12 at Rs. 841.07
and that of premises 984/54 at Rs. 462/11 p. m.
It is against this decision dated 12/13th
October 1971 of the High Court that these appeals have been filed by special
The first contention of Mr. Cooper, learned
Counsel for the appellants is that there is no provision in the Act which
requires standard rent to be fixed on apportionment basis;
rather, the definition of
"premises" in s. 5(8) (b) which speaks of "part of a building
let separately," read with clause (i) of s. 5(10) and clause (c) of s. 11
(1) with due emphasis on the article 'the' immediately preceding the, word
'premises' in the said clauses, indicates that the standard rent would be the
rent for which the suit premises were first let separately on or, after the
basic date i.e. September 1, 1940. If on the basic date-proceeds the
argument-the premises in question did not form the subject of a separate,
single ,demise but had been let out together with other portions of larger
premises, its standard rent could not be determined on the footing of the rent
payable for those different portions. Reliance 582 has been placed on
Dhanrajgirji Naraingirji v. W. G.
Ward;(1) and Bata Shoe Co' Ltd. v. Narayan
Das Mullick and Ors.(2) Counsel had further tried to distinguish Capital and
Provincial Property Trust Ltd. v. Rice(3) and Bhikaji Ramchandra Paranjpe v.
Vishnu Ramchandra Paranjpe(4), referred to in the judgment of the High Court.
On the other hand, Mr. Lokur, learned Counsel
for Respondent maintains that the principle of apportionment has always been
accepted by the Bombay High Court as an appropriate guide in fixing standard
rent under the Act of premises which on the basic date had been let out as part
of a larger entity. It is pointed out that in Narayanlal Bansilal v. Venkatrao
Anant Rai(5); a Bench of the High Court while considering the question of
standard rent in respect of another portion of the very property of the
appellant-Mills, had invoked this principle.
Before we deal with the contentions
canvassed, it will be proper to make a brief survey of the relevant provisions
of the Act:
The material part of the definition of
"premises" in s.5(8) reads:
"Premises" means:(a) any land not
being used for agricultural purposes;
(b) any building or part of a building let
separately. . . ." (emphasis supplied) Sub-section (10) of the same
Section defines "standard rent", in relation to any premises, to mean(a)
where the standard rent fixed by the court and the Controller respectively
under the Bombay ]tent Restrictions Act, 1939 or the Bombay Rents, Hotel Rates
and Lodging House Rates (Control) Act, 1944, such standard rent; or (b) Where
the standard rent is not so fixed/subject to the provisions of section 11, (i)
the rent at which the premises were let on the first day of September 1940, or
(ii) where they were not let on the first day of September 1940, the rent at
which they were last let before that day, or (iii) where they were first let
after the first day of September 1940, the rent at which they were first let,
or (iv) in any of the cases specified in section 11, the rent fixed by the
(1)  27, Bom. L.R. 877. (2) A.I.R. 1953
(3)  Appeal Cases 142. (4) 56 Bom. L.R.
(5) 67 Bom. L. R. 352.
583 Section 1 1 empowers the Rent Court to
fix the standard rent at such amount, as having regard to the provisions of
this Act and the circumstances of the case, the court deems just(a) where any
premises are first let after the first day of September 1940, and the rent at
which they are so let is in the opinion of the Court excessive; or (b) where
the Court is satisfied that there is no sufficient evidence to ascertain the
rent at which the premises were let in anyone of the cases mentioned in subclause
(i) to (iii) of clause (4) of sub-section (10) of section 5; or (c) Where by
reason of the premises having been let at one time as a whole or in part and
another time in parts or a whole, or for any other reasons, any difficulty
arises in giving effect to this part; or (d) Where any premises have been or
are let rent free or at a nominal rent or for some consideration in addition to
rent; or (e) Where there is any dispute between the land-lord and the tenant
regarding the amount of standard rent." Clause (c) read with the opening
part of s. 11(1) is crucial for our purpose.
One of the primary objects of the Act is to
curb exaction of extortionate rents and to stabilise the same at prewar level.
In achieving that object, however, it avoids a Procrustean or mechanical
approach. While pegging the basic line to September 1, 1940, it significantly
subordinates "standard rent" by its very definition in s. 5 (10) (b)
to the benignant jurisdiction of the Court under s.11. And the key words of the
latter provision, into which the conscience of this anti-rack-renting statute
is compressed, are "the circumstances of the case, the Court deems
just". These words inhibit a rigid and ossified determination of
"standard rent". They leave sufficient "play at the
joints", investing the court with a wide discretion in the matter.
According to the scheme of the Act, while
"rent" recoverable by the landlord, may owing to permitted increases,
fluctuate, the 'standard rent' always remains fixed or stationary.
If on the basic date, the suit premises were
not let out separately but were a part of the subject-matter of a larger
demise-as in the instant case-difficulty arises in giving effect to the
statute. Clause (c) of s. II (1) then comes into operation. To resolve the
difficulty this clause and the related provisions are not to be construed in a
narrow technical sense which would stultify or defeat their object.
It is to be interpreted liberally in a manner
which would 'advance the remedy', 'suppress the 584 mischief, and foil 'subtle
inventions and evasions' of the Act. Construed in accordance with this socially
relevant rule in Hayden's case the meaning of 'the premises' having been let at
one time as a whole, spoken of in this clause, can legitimately be deemed to
cover' the larger premises which, on the basic date, had been let as a: whole
and of which the suit premises was a part let out subsequently. In any event,
the amplitude of the phrase "or any other reason" in the latter part
of the clause, is wide enough to embrace cases of this kind and confers a
plenary curative power on the Court.
True, that unlike the English Rent Control
Act of 1920 or the later English Acts, the (Bombay) Act does not expressly
speak of apportionment. But the language of its relevant provisions construed
consistently with the scheme and in built policy of the Act, is elastic enough
to permit the fixation of standard rent on apportionment basis. As noticed
already, s. II (1) gives a discretion to the Court to fix such amount as
standard rent as it "deems just".
However, in exercising this discretion the
Court has to pay due regard to (i) the provisions of the. Act and (ii) the
circumstances of the case.
Apportionment or equal distribution of the
burden of rent on every portion-is a rule of justice and good sense. If the
standard rent of a whole was a specific amount, it stands to reason that the
standard rent of a part or sub-division of that whole should not ordinarily
exceed that amount.
Therefore, if in the circumstances of a given
case the Court feels that for securing the ends of justice and giving effect to
the provisions and policy of the Act, it is reasonably necessary and feasible
to work out the standard rent by apportionment, it can legitimately do so. This
principle, however, is applicable where on the basic date, that portion of which
the standard rent is to be determined, had not been let separately as on unit,
but the whole, of which it is a part, had been let on that date.
Apportionment postulates that on account of
its having been let on the basic date, the whole had acquired a standard rent
which has to be allocated to smaller units subsequently carved out of it.
It is thus clear that the principle of
apportionment is not alien to the spirit of the Act, and has indeed been often
invoked by the courts in fixing standard rent under this Act. In Narayanlal
Bansilal's case (supra), a Division Bench of the Bombay High Court determined
standard rent of another part of this very estate of the Mills in accordance
with that principle.
However, while conceding that apportionment
is not foreign to the scheme, purpose and policy of the Act, we will like to
emphasise the need for caution and circumspection in invoking it. It is not to
be rigidly and indiscriminately applied as a cast-iron rule of law regardless
of time and circumstances or the equities of the case. A doctrinaire approach,
not consistent with a just and fair determination, stultifies the whole
salutary purpose of justice to both, the landlord and the tenant. If necessary,
it can be adjusted, adapted and attuned in the light of the particular
circumstances of the case, to satisfy the statutory requirement of 585 fixing
the standard rent as at a "just amount. Thus if after the material date,
the landlord has made investments and improvements in the promises, it will be
just and reasonable to take that factor also into account and to give him a
fair return on such investments. Further, in apportioning the rant, the Court
must consider other relevant circumstances, such as "size, accessibility,
aspect, and other 'Physical advantage enjoyed by the tenant of the premises of
which the standard rent is in question, as compared with those of the rent of
the property in which it is comprised [see Bainbridge v. Contdon (1)]. Where
after the basic date, the premises completely change their identity,
apportionment as a method of determining just standard rent, loses its efficacy
and may be abandoned altogether. We have only illustrated, not exhaustively
enumerated the relevant circumstances and their implications.
At this stage, we may notice the decisions in
Danrajgirji v. W.C. Ward (supra) and Bata Shoe and Co. v. Narayan Dass (supra)
relied upon by Mr. Cooper.
In the first, a learned single Judge of the
Bombay High Court was considering ss. 2(1)(a) and 13(1)(a) of the Bombay Rent
(War Restriction Act II of 1918), which were, to an extent, similar to sections
5(8)(b) and (10) and 11(1)(c) of the 1947-Act. There, the Port Trust had in
March 24,1915, leased the building known as Watson's Annexe to one Dr. Billimoria
at a rental of Rs. 2,850, besides ground rent and taxes. Dr. Billimoria sublet
the premises in different flats to different tenants. The premises in the
occupation of the defendant were sublet to him at a rental of Rs. 75/in
September, 1915, i.e. before September 1, 1916 which was the basic date under
the 1918-Act. The tenancy of Dr.
Billimoria was terminated by a consent decree
on July 31, 1923 and thereafter, the defendant held directly under the
plaintiff. The question arose as to whether standard rental of the flat should
be calculated on the basis of the actual rent of Rs. 75/-, on the basis of the
subletting or whether it should be determined by apportionment of the rent
which Dr. Billimoria was paying to the Port Trust on the basis of the first
letting. Pratt J answered this question thus:
"The Rent Act itself in the definition
of the premises refers to a part of the building separately let as premises of
which the standard rent has to be determined and such standard rent must be
determined with reference to those premises in the manner specified by s
2(1)(a) of the Act. The standard rent, therefore, must be ascertained on the
admitted basic rent of Rs. 75./....... Again, if the head-lease instead of
being as here the lease of one building consisting of flats had been a lease of
a large number of buildings constituting a large estate, it would be almost
impossible to make a correct apportionment of the rent. I do not think it was
the intention of the Rent Act that landlords and tenants should be driven to do
a difficult and expensive process of valuation.
and calculation before their rent could be
ascertained." (1)  2 K. B. 261.
M45Sup.CI/75 586 We see force in the argument
as also textual and pragmatic support. But these considerations do not preclude
the Court from importing the flexible factors of fairness suggested by the
circumstances of the case. Indeed, s. 11, as explained earlier, obliges the
Court to do it. Moreover, the interpretation of "premises" adopted by
the learned judge was a little too literal, narrow and divorced from the
purpose and content of the provisions relating to fixation of standard rent.
Nor was it in accord with the scheme and object of the 1918-Act. The court's
jurisdiction to consider, as a strong circumstance, proper apportionment of rent
is not taken away, in our view.
It may be noted that just like the opening
clause of s. 5 of the 1947Act, which defines "premises"
"standard rent" etc., the corresponding s. 2(1) of the 1918-Act,
also, started with the qualifying words "In this Act, unless there is
anything repugnant in the subject or context". While applying these
definitions to particular cases and provisions of the Acts, these words should
not be lost sight of. The argument in favour of adopting the restricted
interpretation, ignores this rider to the definitions, provided by the
Legislature in these statutes.
We do not intend to over-burden this judgment
with a discussion the decision in Bata Shoe & Co's case (supra).
Suffice it to say that is a decision under
the West Bengal Premises Rent Control Act (17 of 1950) which stands on its own
facts. It cannot be accepted as laying down a rule of universal application. It
is vulnerable, more or less on the same grounds, on which the decision in
Dhanrajgirji's case can be assailed.
We reject the narrow interpretation of the
relevant provisions of Ss. 2 and II, canvassed for by the appellants, for two
reasons: Firstly, it will leave the door wide open for evasion of this statute
by what Abbot C. J. in Fox v.
Bishop of Chester(1)-called "shift or
contrivance" All that a greedy landlord, need do to squeeze out more rent
would be to divide his premises into several parts and let them out separately
on exorbitant rents. Such an evasion may amount to a fraud upon the statute.
Secondly, such a construction so manifestly subversive of one of the primary
objects of the Act would be wholly beyond the intendment of the Legislature.
For reasons aforesaid we would negative the
first contention of Mr. Cooper, as an inflexible proposition and answer the first
part of the question posed in the affirmative to the extent indicated. it takes
us to the second part of that question namely whether the principle of
apportionment was correctly applied to the fact, of the case ? Mr. Cooper
contends that the first trial court (Samson J.) had rightly found that the
premises in question on account of extensive alterations and constructions
undergone a complete change after the basic date, and therefore standard rent
could not be determined by apportioning the rent of the whole among the parts.
It is maintained that (1) (824) 2 B & C 635 at 655.
587 this finding of Samson J. was wrongly set
aside by the High Court and must be deemed to be still holding the field.
Objection is also taken to the amendments
allowed by the trial court on remand. In the alternative, it is argued that
even the courts below found that properties 983/10, 983/11, 983/12 and 984/54
were admittedly new structures and extensive repairs and replacements had been
made in the remaining suit premises which had been destroyed or severely
damaged by fire in 1948-49. On account of these substantial alterations and
reconstructions the premises in question had lost their identity and
consequently, the principle of appointment was not applicable.
The first part of the contention based on the
judgment of Samson J. is groundless. The judgment of the first trial court was
set aside in to by the Revisional Court, and further by the High Court and the
case was remanded for de novo trial to the trial court which thereafter,
decided the case afresh after allowing the applicant to amend his R.A. N.S. It
is too late in the day any way to argue on the assumption that the findings
The question whether a certain property has
changed its identity after the basic date is largely one of fact. The courts
below have found that excepting properties 983/10, 983/11,983/12 and 984/54
which were admittedly new structures contracted near about 1948, the rest of
the properties, namely 983/1 to 983/9 had not lost their identity. The courts
therefore, worked out the economic rent of these new structures by capitalising
their value and gave the landlord a fair return on Ms investments and fixed
their standard rent mainly on that basis. It was with regard to the unchanged
old properties 983/1 to 983/9 that the High Court and the Revisional Court
mainly adopted the method of appointment. Even so, it allowed the landlord fair
return over Rs. 14,448/being the cost of flooring, ceiling and other fixtures
fixed to property 983/6. Now it is not disputed that on the basic date
(September 1, 1940), these properties in question were parts of a larger entity
comprised in a single lease or tenancy in favour of Sound Studios at a monthly
rent of Rs. 1700/-. The courts below have therefore taken into account this
basic circumstance along with the other relevant facts of the case. We do not
find anything so wrong or unfair or untenable in the method adopted by them
which would warrant an interference by this Court in the exercise of its
special jurisdiction under Art.
136 of the Constitution. Not that
apportionment must be applied in all cases as a rule of law but that, if
applied along with other considerations dictated by a sense of justice and
fairplay, cannot be condemned by this Court as, illegal. We therefore, overrule
this contention, also.
Lastly, it is contended that the courts below
have seriously erred in evaluating the land under the suit properties at Rs.
30/per sq. yd. on the basis of an instance (Ex. R 6) of the year 1942, while
they should have taken into account the value of the land as in the year 1948.
it is added that some photostat co-pies of sale-deeds pertaining to the relevant
year were produced by Mr. Deweja, architect examined by the Landlord, and the
Revisional Court wrongly rejected them As unproved. it is maintained that in
1948, the market value of the site underneath the 288 structures was Rs. 120/per
sq. yd. in support of his contention that the value of the land at the date of
the letting is the appropriate value to be taken into account, Counsel has
cited Bukmanibai Khunji Cooverji v. Shivnarayan Ram Ashre. (1).
We are unable to accept this contention also.
The courts below in capitalising the structures, 983/10 to 983/12 and 984/54
did take into account the value of the land married to those properties at the
rate of Rs. 50/per sq. yd;
which, according to their estimate, after
adding Rs. 30/per sq. yd for escalation, would be the market value of that land
in the year 1948. Since the rent of the old unchanged properties 983/1 to 983/9
was fixed mainly on apportionment basis, the courts did not think it necessary
to take the value of their sites separately into computation in fixing the
standard rent. Moreover, there was no evidence on the record to show that the
value of the land in question, in the year 1948 was Rs. 120/per sq. yd. We,
therefore, do not think it necessary to examine Cooverji's case cited by the
Counsel. We however, do not rule out the propriety of paying regard to
escalations in land value as put forward by Mr. Cooper, but do hold that this
Court will be loath to reinvestigate factual conclusions not shown to be
perverse or manifestly unjust. Such is not the case here.
For all the foregoing reasons, we would
answer the question posed for decision.in the affirmative and dismiss these
appeals with one set of costs.
Appeals dismissed (1)(1966)67 Bom. L.R. 692.