Zakiya
Begum & Ors. V. Shanaz Ali & Ors. [2010] Insc 590 (9 August 2010)
Judgment
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO._____ OF 2010
(Arising out of SLP (C) No.31164/2008) Mrs. Zakiya Begum & Ors.
...Appellants - Versus - Mrs. Shanaz Ali & Ors. ...Respondents
GANGULY,
J.
1.
Leave granted.
2.
In this appeal the judgment and order dated 12.11.2007 of a
learned Single Judge of the High Court of Karnataka in revisional jurisdiction
in H.R.R.P. No. 60 of 2007, under Section 46 (1) of the Karnataka Rent Act,
1999 has been impugned.
3.
The revisional petition was filed by Mrs. Zakiya Begum and two
others assailing the order dated 18.1.2007, passed by the Learned 1 XVth
Additional Small Causes Judge, Mayo Hall Unit, Bangalore on I.A. No. 8/2006
filed by the tenants, respondents herein.
4.
The material facts are that the appellants are the landlords of
the property bearing No. 28/1, Robertson Road, Frazer Town, Bangalore - 5,
measuring 43 feet North, South 37 feet 9 inches, East 25 feet and West 25 feet,
the property included 6 feet wide passage leaving from Robertson Road into the
scheduled premises (herein after referred to as the said `premises'). The
appellants became the owner of the scheduled premises by virtue of a Gift Deed
dated 30.3.2000 executed by the husband of appellant No. 1 and the father of
appellants No. 2 and 3.
5.
The appellants inducted the respondents as tenants on a monthly
rent of Rs.4000/- (Four Thousand Only) per month in respect of the said
premises. The rent was agreed in accordance with clause 4 of the rent agreement
dated 06.11.1997.
6.
On or about 21.3.01 the appellants instituted an eviction
proceeding being H.R.C. No. 10042/2001 against the respondents under Section 21
(1) (h) and (f) of Karnataka Rent Control Act, 1961 (herein after "the
1961 Act"), inter alia, on the grounds of default, subletting, reasonable
and bonafide requirements and some other grounds.
7.
In the said eviction proceeding, the respondents filed an IA
being, IA 8 of 2006, wherein it was contended by the respondents that during
the pendency of the eviction proceeding, under Section 21(h)(f) of the 1961
Act, Karnataka Rent Act 1999 (herein after, "1999 Rent Act") has come
into effect repealing the 1961 Act and it was further contended that the
eviction proceeding will have to be dealt with under the provisions of the 1999
Rent Act. The appellants also amended their eviction proceedings in accordance
with 3 the 1999 Rent Act and the respondents gave their objections to the same.
8.
The main objection of the respondents in IA 8 is that admittedly
they are tenants on a monthly rental of Rs.4000/- and as such the eviction
proceeding is not maintainable in respect of the premises under the 1999 Rent
Act as the same is not applicable to premises where the monthly rental exceeds
Rs.3500/-. It was, therefore, urged that the Court of Small Causes has no
jurisdiction to try the said eviction proceeding as the 1999 Rent Act does not
apply.
9.
By an Order dated 18.01.2007 the Court of XVth Additional Small
Causes Judge, inter alia, held that "since the monthly rent of scheduled
premises exceeds Rs.3500/-, hence the Karnataka Rent Act, 1999 is not
applicable and this Court has no jurisdiction to try the case and the petition
is not maintainable before this court". Saying so, IA 8 was allowed by 4
the XVth Additional Judge of the Small Causes Court.
10.
That led the appellants to challenge the said order of the Small
Causes Court before the High Court.
11.
It may be noted that neither before the High Court nor before this
Court the applicability of the 1999 Rent Act, which came into effect in
November 2001, was questioned by the appellants. Rather acknowledging its
applicability to the pending eviction proceeding the appellant amended the same
in accordance with the 1999 Rent Act.
12.
It is very clear from Section 70 of the 1999 Rent Act that unless
proceedings initiated under the 1961 Act has reached the stage of execution of
a decree, 1961 Act will have no application to other eviction proceedings which
are pending, prior to the execution stage, on the date of coming into effect of
the 1999 Rent Act.
13.
The provisions of repeal and savings under Section 70 of the 1999
Rent Act, particularly provisions of Section 70(1) and (2) are set out below:
"70.
Repeal and Savings.- (1) The Karnataka Rent Control Act, 1961 (Karnataka Act 22
of 1961) is hereby repealed.
(2)
Notwithstanding such repeal and subject to the provisions of section 69,- (a)
all proceedings in execution of any decree or order passed under the repealed
Act, and pending at the commencement of this Act, in any Court shall be
continued and disposed off by such Court as if the said enactment had not been
repealed;
(b) all
cases and proceedings other than those referred to in clause (a) pending at the
commencement of this Act before the Controller, Deputy Commissioner, Divisional
Commissioner, Court, District Judge or the High Court or other authority, as
the case may be in respect of the premises to which this Act applies shall be
continued and disposed off by such Controller, Deputy Commissioner, Divisional
Commissioner, Court, District Judge or the High Court or other authority in
accordance with the provisions of this Act.
(c) all
other cases and proceedings pending in respect of premises to which this Act
does not apply shall as from the date of commencement of the Act stand
abated."
14.
The learned counsel for the appellants urged that in view of the
provisions of Section 2(3)(e)(i) of the 1999 Rent Act, the decision of the
Small Causes Court is bad in law and cannot be sustained.
15.
In order to appreciate these controversies the relevant Section is
set out below.
"2(3)
Nothing contained in this Act shall apply,- (a) xxx (b) xxx (c) xxx (d) xxx (e)
to any premises, deemed rent on the date of commencement of this Act or the
standard rent of which exceeds,- (i) three thousand five hundred rupees per
month in any area referred to in Part A of the first schedule; and (ii)
xxx"
16.
The learned counsel for the appellants submitted that the
non-applicability of the 1999 Rent Act is only on the basis if in the tenanted
premises the deemed rent or the standard rent exceeds Rs.3500/- on the date of
commencement of the new Act of 1999 Rent Act.
7 It was
urged that such standard rent is one which is fixed under Section 7 of the Act
and it was argued that merely because the agreed rent is Rs.4000/- per month in
respect of the schedule premises, the Small Causes Court should not have
allowed the application of the tenant.
17.
In order to decide this controversy, the provisions of Sections 6
and 7 of the 1999 Act are to be taken into consideration. Provision of Sections
6 and relevant provisions of Section 7 of the said Act are set out below.
"6.
Rent payable.- (1) The rent payable in relation to a premises shall be,- (a)
the rent agreed to between the landlord and the tenant as enhanced in the manner
provided in the Third Schedule; or (b) the standard rent specified under
section 7, as revised under section 9.
(2) In
the case of a tenancy entered into before the commencement of this Act, the
landlord may, by notice in writing to the tenant within three months from the
date of such commencement, enhance the rent as specified under section 7, and
the rent so enhanced, shall be payable from the date of such commencement.
7.
Standard rent.- (1) Standard rent in relation to any premises, shall be the
rent calculated on the basis of ten per cent per annum of the aggregate amount
of the cost of construction and the market price of the land comprised in the
premises on the date of commencement of the construction:
Provided
that the standard rent calculated as aforesaid shall be enhanced in the manner
provided in the Third Schedule.
(2) For
the purpose of this section,- (a) cost of construction shall include cost of
electrical fittings, water pumps, overhead tanks, storage tank and other water,
sewerage and other fixtures and fittings affixed in the premises;
(b) in
case any fixture and fittings referred to in clause (a) are in common use by
more than one occupant in a building, such proportion of cost of the fixtures
equipment and fittings shall be included in the cost of construction of the
premises as bears proportion to the plinth area of such premises to the plinth
area of that building;
(c) the
cost of construction shall be the actual amount spent on construction, and in a
case where such amount cannot be ascertained, such cost shall be determined as
per the scheduled rates of the State Public Works Department for cost of
construction for similar 9 construction for the year in which the premises was
constructed;
(d) the
market price of the land shall be the price for which the land was bought as
determined from the deed of sale registered under the Registration Act, 1908
(Central Act 16 of 1908), if construction commenced in the year of registration
or the land rates notified by the State Government or a local authority for the
year in which construction was commenced, whichever is higher;
(e) the
land comprised in the premises shall be the plinth area of the building and
such of the vacant land up to fifty per cent, of the plinth area as is appurtenant
thereto;
(f) in a
case where a premises forms part of a building having more than one premises,
such proportion of price of land forming part of such building shall be taken
to be the market price of the land comprised in the premises as is equal to the
proportion of the plinth area of such premises to the plinth area of that
building;
(g)
notwithstanding anything contained in clauses (c) and (d), the cost of
construction and the market price of the land comprised in the premises
purchased from or allotted by the Government or a local authority shall be the
aggregate amount payable to such Government or the local authority for the
premises:
10
Provided that the Controller may, for the purpose of arriving at, the cost of
construction and the market price of the land comprised in the premises, allow
in addition, subject to a maximum of thirty per cent of amount payable to the
Government or the local authority, to the amount so payable for any expenditure
incurred by the landlord or by the first or any subsequent purchaser or
allottee for any improvement, addition or structural alteration in the
premises."
18.
The Hon'ble High Court did not accept the contention of the
appellants and dismissed the revision petition filed by the appellants.
19.
We are also inclined to agree with the view taken by the Hon'ble
High Court for the reasons indicated below.
20.
The 1999 Rent Act (Karnataka Act 34 of 2001) was brought into
existence to remedy problems of urbanisation and to give protection of this
only to certain categories of tenants and in respect of some kinds of tenanted
premises.
Before
enacting this law, recommendations of Economic Administration Reforms
Commission and 11 the National Commission on Urbanisation were considered.
21.
On the recommendations of those two commissions, this new
legislation was brought in to balance the interests of both the landlord and
the tenant and the new law was to provide for regulation of rent and eviction
in the spirit of modern economy and it was designed to replace the 1961 Rent
Act.
22.
From the statement of objects and reasons some of the features of
the 1999 Rent Act are clear. The application of the Act is restricted to,- (i)
to any residential building the Standard rent of which does not exceed rupees
3,500 per month in the areas covered by Karnataka Municipal Corporation Act,
1976 and rupees 2,000 per month in other areas and a commercial building having
plinth area of not exceeding 14 square meter.
(ii) to
buildings which are more than 15 years old.
(2) The Rent
Deed is required to be in writing and registered.
(3)
Tenancy is made inheritable to a limited extent.
12 (4)
Provision is made,- (a) for collection of standard rent in relation to the
investment on property and for enhancement of rent, and for determination of
Standard Rent by Rent Controller;
(b) for
registration of middlemen and estate agents;
(c) for adjudication
of eviction application by Rent Courts, with only Right of Revision, but no
appeal;
(d) for
immediate eviction of tenants of State or Central Government Employees, members
of Armed Forces, widows, handicapped persons and persons above the age of 65
years under certain circumstances;
(e) to
laydown Special Procedure for trial of cases before the controllers and also
the Courts so as to achieve quick disposals and negotiated settlement.
(f) to
impose certain Special obligations on the landlords and tenants, etc."
23.
Therefore 1999 Rent Act is a socio-economic legislative measure
and is designed to give protection to certain classes of tenants. A tenant who
is paying deemed rent or standard rent above Rs.3500/- in respect of his
tenanted premises on the day of commencement of the new Act is outside the
purview of the Act.
24.
Under Section 6 of the Act, set out hereinabove, rent payable in
respect to the premises is the rent agreed between the landlord and tenant as
enhanced in the manner provided in the Third Schedule or the standard rent as
specified under Section 7 and revised under Section 9.
25.
Insofar as deemed rent on the date of commencement of the Act is
concerned, the same has been explained under Explanation to Section 2(3)(e) which
is set out below.
"Explanation.-
"Deemed rent on the date of commencement of this Act"
shall be
the rent calculated in the manner provided in section 7, together with
revision, if any, as provided in section 9 and decreased in the case of
premises constructed after the commencement of this Act at the same rate as the
rate of enhancement stipulated in the third Schedule to reflect the position on
the date of commencement of this Act"
26.
A perusal of the said Explanation would show that the deemed rent
refers to Sections 7 and 9 of 1999 Rent Act.
27.
In the instant case, the agreed rent is Rs.4000/- which comes
within the definition of Section 6(1)(a) and the said agreement was admittedly
entered into between the appellants and respondents prior to the commencement
of the 1999 Rent Act.
28.
In a case where there is an admitted agreed rent, the question of
fixation of standard rent does not arise.
29.
An explanation to a Section should normally be read to
"harmonise with and clear up any ambiguity in the main Section" and
normally not to widen its ambit. (See Bihta Co- operative Development and Cane
Marketing Union Ltd., and another vs. Bank of Bihar and others - AIR 1967 SC
389 at page 393 and M/s. Oblum Electrical Industries Pvt. Ltd., Hyderabad vs. Collector
of Customs, Bombay - AIR 1997 SC 3467 at page 3471).
30.
In the instant case the agreed rent is the deemed rent since there
is no dispute about the quantum of agreed rent before the coming into force of
this Act.
31.
For the reasons aforesaid, this Court does not find any error in
the reasoning of the High Court and the appeal is accordingly dismissed.
No order
as to costs.
.....................J. (G.S. SINGHVI)
.....................J.
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