Excellent articles on Basic Principles for Fixation of Standard Rent

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How to ascertain standard rent of tenanted premises?

10.1. So far the determination of standard rent is concerned, there are two main methods of determining the same, namely the theory of comparables and secondly the investment theory. In the first theory, the exercise can be carried out by comparing the premises in question with the other similarly situated premises in the locality of which the rent is already fixed. Ofcourse while making the exercise of comparison the following factors can be kept in view :-

(a) Premises should more or less be similarly situated in the same locality with the same user,

(b) Relevant period of letting of the comparable premises.

(c) Whether the rents of the comparable premises are fair and reasonable or on the low side due to a number of extraneous circumstances.

(d) the amenities and facilities provided in such building.

By carrying out such exercise the standard rent of the concerned property can be fixed without much difficulty. So far the other method is concerned, it would depend on provisions meant for fixing the standard rent as contained in section 11 of the Bombay Rent Act and also the guidelines laid down by the Apex Court in the case of Dr. Balbir Singh (supra). This again will be subject to the outgoings in the nature of maintenance expenses, expenses for having basic facilities such as making provision for water, the municipal taxes, the required annual repairs, insurance, etc., which may be required to be taken into account even after deduction of sum equal to ten percent towards the allowance for repairs, etc. as envisaged under sub-rule (3) of rule 7 of the Rules. However, as stated earlier the theory of comparables can be adopted provided there is no considerable disparity between the premises. At this juncture more recent decision rendered in the case of Lt. Col. P.R. Chaudhary (Retired) v/s. Municipal Corporation of Delhi reported in MANU/SC/0315/2000by the Apex Court is required to be seen. These observations are vis-a-vis method of fixing the standard rent and they are helpful in determining the Gross Rateable Value in the case of hypothetical tenant. It has dealt with the disparity that may prevail between two premises of same kind because of the disadvantage and it has also pointed out that even in the cases where there is comparison between two buildings one being old and other being newly constructed, there would be great disparity on account of the rising cost of construction, the land prices, etc. and in that case such comparison would be irrational and illogical and, therefore, the factors regarding the increase in cost of construction, land prices, etc. will have to be kept in mind. It has observed as under :-

"Law as interpreted by the Supreme Court cannot be brushed aside by saying that it is not in conformity with statutory provisions. The law laid down by the Supreme Court is explicit and admits of no doubt. For the purpose of arriving at the rateable value the basic principle is the annual rent which the owner of the premises may reasonably expect to get if the premises were let out to a hypothetical tenant. It would depend on the size, situation, locality and condition of the premises and the amenities provided therein. All these and other relevant factors would have to be followed in determining the rateable value. That, however, cannot be in excess of the standard rent which would be the upper limit. 

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Decided On: 31.03.2003

 A'Bad Municipal Corporation Vs.  Dena Bank

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How the principle of apportionment is applicable to the fixation of standard rent of a premises under the Bombay Rents Act?

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.

30. 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.

31. 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 fixing the standard rent as at a "just amount. Thus 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 to give him a fair return on such investments. Further, in apportioning the rent, the Court must consider other relevant circumstances, such as "size, accessibility, aspect, and other physical advantages" 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 1925 2 K.B. 261. 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.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1186-1188 of 1972

Decided On: 12.03.1974

Raja Bahadur Motilal Bombay Mills Ltd. Vs.  Govind Ram Brothers (P) Ltd.

Hon'ble Judges/Coram:

R.S. Sarkaria and V.R. Krishna Iyer, JJ.

Citations: AIR 1974 SC 1708, 1974 SCR (3) 577,MANU/SC/0395/1974

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Whether tenant can avoid payment of standard rent even though said order is not stayed?

In the absence of any interim order passed by the High Court staying the operation of the order fixing the fair rent at Rs. 5,250/- per month, if the tenant is not depositing the fair rent; he must be doing so at his own risk.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6145 of 2009 

Decided On: 09.09.2009

 Arjunan Vs. Universal Fertilizer Corporation

Hon'ble Judges/Coram:

Tarun Chatterjee and R.M. Lodha, JJ.

Citation: (2009)9 SCC359

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Nagpur HC: Standard rent can be fixed from the date of application

Letting of Houses and Rent Control Order, 1949, clauses 4 and 5 - Order fixing fair rent--Date of operation.

On an application for fixation of fair rent, the Rent Controller cannot fix fair rent retrospectively from the date of the commencement of the tenancy but can only do it prospectively from the date on which he is moved.

IN THE HIGH COURT OF NAGPUR

Misc. Petn. No. 85 of 1952

Decided On: 29.08.1952

 Kewalchand Kastoorchand  Vs.  Samirmal Jaini and Anr.

Hon'ble Judges/Coram:

Hidayatullah and Sen, JJ.

Citation: AIR 1953 Nag 146,1953 NLJ 233

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Whether application for standard rent is to be dismissed if age of construction of suit building is not given?

 Although several grounds have been urged in support of the petition, Mr. Jaiswal, learned counsel for the petitioners, at the out set submitted that the application filed by respondents 1 to 4 for fixation of the fair rent was liable to be dismissed on the ground that in the application filed for fixation of fair rent the respondents 1 to 4 had not mentioned the age of construction of the suit premises which was of utmost importance. He further submitted that in the absence of such basic pleadings, the application for fixation of fair rent was liable to be dismissed. In support of this submission, Mr. Jaiswal placed reliance upon the judgment delivered by learned Single Judge of this Court in Shantilal Sohanlal Shah vs. Secretary, Krishi Utpanna Bazar Samit, Balapur : (1995(2) Mh. L. J. 12. Mr. Jaiswal submitted that since the ground goes to the root of the matter, the petitioners are entitled to raise this ground for the first time in the writ petition. He invited my attention to the ground (F) taken in this regard in the petition.

5] As stated above, no effective appearance has been put up on behalf of respondents 1 to 4.

6] I have considered the submissions advanced by learned counsel for the petitioners and perused the record and the judgment relied upon. In Shantilal Shah's case (supra) learned Single Judge of this Court dismissed the petition filed by the petitioner/landlord challenging the order passed by the authorities under Rent Control Order dismissing the application. Learned Single Judge has held that in an application for fixation of fair rent filed by the landlord he is bound to plead the age of construction of the house since in terms of Clauses 4, 5, 6 and 7 of the Rent Control Order the determination of fair rent depends upon the age of construction of the house. After considering the effect of Clauses 4, 5, 6 and 7 of the Rent Control Order, the learned Single Judge has held that in the absence of pleadings with regard to the age of construction of the house, the application for fixation of fair rent was liable to be dismissed. Perusal of the application filed by respondents 1 to 4 discloses that the age of construction of the suit house has not been mentioned.

Therefore, the ratio in Shantilal Shah's case(supra) is squarely applicable in the present case.

Bombay High Court

Shri Nandkumar Son Of B.H. Naidu vs Shri Thanwardas Son Of Hasanand ... on 8 September, 2008

Bench: A. P. Lavande

Citation: 2009(1) ALLMR 59

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How to appreciate evidence in case of fixation of rent by court?

On perusal of record, I find that on issue no. 2 regarding rate of rent the court below has considered the rent receipts filed by the plaintiff for the months of March, April and May 2009 wherein the name of the tenant is shown as Bobby and the name of the landlord is shown as Dayal Singh and Dayal Singh has received the rent and the rate of rent shown is shown Rs. 5,000/-. These receipts were proved by PW-1. The defendant except filing his affidavit did not produce any evidence whatsoever to contradict these receipts. He filed his statement in the shape of affidavit and he never came forward for cross-examination despite of having been several opportunities. I also find that that except the bald denial, there was nothing on record to prove otherwise. In view of the specific case of the plaintiff that the other adjoining shop of same size that have been let out at the rate of Rs. 8,000/- per month and also considering the size of the shop (18 feet x40 feet), which is a new construction as per the first assessment of the year 2008, I find that there is no perversity in the finding recorded by the court below in this regard so as to attract exercise of revisional powers in the findings of fact.

15. During the course of argument much stress was given on the ground that the rate of rent has wrongly been fixed by the trial court. The assertion is that the rent was payable at the rate of Rs. 500/- per month and not at the rate of Rs. 5,000/- per month. This issue has been decided in favour of the plaintiff on the basis of the rent receipts produced by the plaintiff. The defendant never came forward to lead his evidence in rebuttal and in fact, he never came forward to argue the case. A perusal of the order dated 07.07.2018 at page 155 of the paper book clearly indicates that at least 8 dates were fixed for evidence of the defendant and his applications to recall the orders, whereby his opportunity to lead evidence were closed, were allowed on payment of cost on several occasions, but still he did not come forward to lead any evidence. He even after seeking time for argument did not come forward to argue the case and therefore, it cannot be said that the defendant was not afforded proper opportunity of hearing by the court below to rebut the evidence of the plaintiff on the issue of rent deed of land.

IN THE HIGH COURT OF ALLAHABAD

S.C.C. Revision No. 97 of 2018

Decided On: 04.12.2018

Bobby Vs.  Raj Kumari

Hon'ble Judges/Coram:

V.K. Birla, J.

Citation: AIR 2019(NOC) 647 ALL

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Whether court can fix quantum of rent considering rate of rent pleaded by landlord?

 During the course of argument much stress was given on the ground that the rate of rent has wrongly been fixed by the trial court. The assertion is that the rent was payable at the rate of Rs. 500/- per month and not at the rate of Rs. 5,000/- per month. This issue has been decided in favour of the plaintiff on the basis of the rent receipts produced by the plaintiff. The defendant never came forward to lead his evidence in rebuttal and in fact, he never came forward to argue the case. A perusal of the order dated 07.07.2018 at page 155 of the paper book clearly indicates that at least 8 dates were fixed for evidence of the defendant and his applications to recall the orders, whereby his opportunity to lead evidence were closed, were allowed on payment of cost on several occasions, but still he did not come forward to lead any evidence. He even after seeking time for argument did not come forward to argue the case and therefore, it cannot be said that the defendant was not afforded proper opportunity of hearing by the court below to rebut the evidence of the plaintiff on the issue of rent deed of land.

IN THE HIGH COURT OF ALLAHABAD

S.C.C. Revision No. 97 of 2018

Decided On: 04.12.2018

 Bobby  Vs.  Raj Kumari

Hon'ble Judges/Coram:

V.K. Birla, J.

Citation: AIR 2019 (NOC) 647 ALL

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Whether tenant who has failed to deposit standard rent within ninety days of order is liable to be evicted?

The material on record also shows that even after the fixation of standard rent by the trial Court by an order dated 07-01-2004 at the rate of Rs. 750/- per month, the petitioner did not deposit the entire arrears from 01-01-2002 up to date within 90 days from the said order dated 07-01-2004. Therefore, upon minutely scrutinizing the evidence and material on record, it is seen that the petitioner had clearly committed default and thereby exposed himself for grant of eviction decree on the ground of arrears of rent under subsections 1, 2 and 3 of Section 15 of the aforesaid Act. The petitioner has failed to demonstrate any perversity in the findings rendered by the Courts below concurrently, on the basis of material and evidence on record. In such a situation, this Court cannot exercise writ jurisdiction in favour of the petitioner to reverse the decree of eviction granted by the trial Court and confirmed by the appellate Court.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 279 of 2016

Decided On: 11.09.2018

 Ataullahkhan Vs.   Kernath Jaywantrao Nagargoje and Ors.

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation: 2019(2) MHLJ 471

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Whether court can pass eviction decree even if tenant has raised dispute regarding standard rent?

 Section 11(3) of the Rent Act, 1947 refers to an application for fixation of standard rent by a tenant who has received a notice from his landlord and when such application is made, there is an obligation on the Court to specify the amount of rent or permitted increases which are to be deposited in Court by the tenant and the Court is further obliged to make an order directing the tenant to deposit such amount in Court or at the option of the tenant to make an order to pay to the landlord such amount thereof as the Court may specify pending the final decision of the application. If the tenant fails to deposit such amount or to pay such amount thereof to the landlord, his application shall be dismissed. A tenant can only be considered to be ready and willing to pay, if he makes an application to the Court under sub-section (3) of Section 11 of the Rent Act, 1947 and thereafter, pays or tenders the amount of rent or permitted increases specified by the Court. In view of the ratio laid down by the Supreme Court in the case of Harbanslal Jagmohandas and another v. Prabhudas Shivlal (MANU/SC/0480/1976 : AIR 1976 SC 2005) (supra), in order to escape from the consequences mentioned in Section 12(3)(a) of the Rent Act, 1947, the tenant should make an application under Section 11(3) of the Rent Act, 1947 within one moth of the service of the notice under Section 12(2) and there is no other mode available. In the case of Harbanslal Jagmohandas and another v. Prabhudas Shivlal (supra), the Supreme Court points out that in order to avoid the operation of Section 12(3)(a) of the Rent Act, 1947, the dispute with regard to standard rent or permitted increases must be raised at the latest before the expiry of one month from the date of service of notice under Section 12(2) of the Rent Act, 1947 and it is not enough to raise a dispute for the first time in written statement. It nullifies the provisions contained in Section 12 and Explanation thereto and confers a right on the tenant where the legislation does not contemplate such a right.

12. In paragraph 32 of the judgment, the Division Bench of this Court in the case of Jaypal Bandu Adake and another v. Basavali Gurulingappa Mhalank and another (supra) has made the following observations:

"32. On giving our anxious consideration to the legal position as now settled by the decisions of the Supreme Court, we are of the considered view that the only way to prevent a decree for eviction being passed under the provisions of section 12(3)(a) of the Rent Act is that the tenant must make an application raising a dispute regarding standard rent and must ask for fixation of standard rent under section 11(3) of the Rent Act as required by Explanation I to section 12. There is no other mode permissible for raising a dispute as to standard rent for the purposes of section 12 of the Rent Act. By raising a dispute with regard to standard rent by the tenant in a reply to the demand notice before the expiry of one month without making an application under section 11(3) read with Explanation I to section 12, the Court will not be prevented from passing a decree for eviction under the provisions of section 12(3)(a). The fact that there was some dispute about standard rent prior to the notice under section 12(2) would also be immaterial and would not affect the power of the Court to pass a decree under section 12(3)(a) if the conditions referred to in section 12(3) (a) are satisfied if no application has already been made under section 11(1) of the Act. This will answer the first two questions raised in the order of reference."

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Writ Petition No. 2254 of 1993

Decided On: 05.01.2018

Ashokkumar Uttamchand Bogawat Vs. Dinkar Sakharam Bhingardive

Hon'ble Judges/Coram:

V.K. Jadhav, J.

Citation: 2018(6) MHLJ 671

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Which provisions of maharashtra rent control Act is applicable to tenants of public undertaking?

 In the circumstances, we hold as follows:

(a) The provisions of the Maharastra Rent Control Act, 1999 with respect to fixation of Standard Rent for premises, and requiring the landlord not to cut off or withhold essential supply or service, and to restore the same when necessary, are not in conflict with or repugnant to any of the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

(b) The provisions of the Public Premises Act, 1971 shall govern the relationship between the public undertakings covered under the Act and their occupants to the extent they provide for eviction of unauthorised occupants from public premises, recovery of arrears of rent or damages for such unauthorised occupation, and other incidental matters specified under the Act.

(c) The provisions of the Maharashtra Rent Control Act, 1999 shall govern the relationship between the public undertakings and their occupants to the extent this Act covers the other aspects of the relationship between the landlord and tenants, not covered under the Public Premises Act, 1971.

(d) The application of Appellant and similar applications of the tenants for fixation of Standard Rent or for restoration of essential supplies and services when necessary, shall be maintainable under the Maharashtra Rent Control Act, 1999.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7171 /2010 (Arising out of Special Leave Petition (Civil) No. 34125 of 2009)

Decided On: 19.09.2011

Banatwala and Company Vs.  L.I.C of India 

Hon'ble Judges/Coram:

R.V. Raveendran and H.L. Gokhale, JJ.

Citation: (2011) 13 SCC 446

Read full judgment here: Click here

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Whether notice demanding excess rent is valid?

Shri Naik, learned counsel appearing on behalf of the petitioner, submitted that the two courts below were in error in decreeing the suit on the ground of default. The principal contention urged by the learned counsel is that the contractual rent as claimed by the landlord was not Rs. 25/- but Rs. 12/-. Shri Naik submits that as the notice under Section 12(2) of the Act demanded rent at the rate of Rs. 25/- the notice was invalid and consequently decree of eviction cannot be passed. It is not possible to accede to the submission of the learned counsel. The finding of the two courts below is that the tenant was in arrears of rent for more than six months and notice under Section 12(2) was duly served. The tenant did not pay rent even at the rate of Rs. 12/- per month nor did file any application for determination of standard rent. It is undoubtedly true that the trial court held that the contractual rent was Rs. 12/- and the Appellate Court disturbed that finding without any reasonable ground. The Appellate court held that if the landlord is claiming that the rent was Rs. 25/- it should be so. The reasoning is entirely faulty and defective. The trial judge has given sound reasons for holding that the rent was Rs. 12/- per month. Accepting that finding, still the tenant cannot escape the decree of eviction because the tenant did not tender even that rent at the rate of Rs. 12/- within period of one month. The submission of Shri Nath that the notice is bad because excess rent was demanded cannot be accepted as it has been repeatedly held by this court that notice would not be invalid solely on that count. In case the tenant would have tendered rent at the rate of Rs. 12/- then readiness and willingness would have been established beyond any doubt. In these circumstances, the decree of eviction cannot be disturbed. Accordingly, petition fails and rule is discharged. In the circumstances of the case, there will be no order as to costs.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 531 of 1988

Decided On: 29.06.1989

 Sumatibai Sunderlal Awale Vs.  Banusaheb Peter Chavan

Hon'ble Judges/Coram:

M.L. Pendse, J.

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Whether will be effect of dismissal of standard rent application for want of prosecution?

It appears to us that where a tenant does not prosecute an application for fixation of standard rent and deliberately permits it to be dismissed for non-prosecution it could be reasonably inferred that it was not a bona fide application at all. In the case before us, it being admitted that the agreed rent was Rs. 30/- p. m., that would be the "standard rent" as defined by Section 5(10) of the Act. That was the rate at which rent was payable. Non-prosecution of the application for standard rent indicated that there was no real dispute regarding the standard rent or permitted increases. In such cases, if the provisions of Section 12(3)(a) are not shown to be complied with the Court is bound to pass a decree for eviction.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 217 of 1976

Decided On: 14.04.1977

Mistry Premjibhai Vithaldas Vs. Ganeshbhai Keshavji

Hon'ble Judges/Coram:

M. Hameedullah Beg, C.J., A.C. Gupta and P.S. Kailasam, JJ.

Citation: AIR 1977 SC 1707

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Whether it is permissible for tenant to raise dispute of standard rent in written statement?

So far as the first ground of eviction of arrears of rent is concerned, it is an admitted case that the tenant Manilal was in arrears of rent from 06.07.1974 to 05.05.1976 amounting to Rs. 660/- and proper notice (Ex. 31) was issued asking him to vacate premises in case he fails to make good the arrears of rent. Though the tenant Manilal received the said notice, no reply was sent there to; nor the dispute of standard rent was raised. It is only in the written statement filed by him, the dispute was raised for the first time as to the standard rent. Notably, the tenant Manilal had never applied for fixation of the standard rent earlier nor within one month of the service of notice had he applied for fixation of the standard rent. As noted earlier, the tenant Manilal did not even send reply notice disputing the standard rent.

13. According to the Appellant-landlord, the property is situated on main road and Gajrawadi bus stand is also nearby and hence, the standard rent of the demised property cannot be less than Rs. 30/- per month. It is also pertinent to note that at relevant point of time, first floor of the tenanted premises was let out to another tenant namely Chimanlal Jaiswal who was using the same for residence and had been paying rent of Rs. 30/- per month. Likewise, the second floor was let out to one tenant named Rikhavchand who was also using it as residence and the ground floor was let out for hair cutting salon on the rent of Rs. 30/- per month. Upon consideration of evidence, the trial court recorded that rent of Rs. 30/- per month for the salon in the ground floor cannot be said to be excessive. There is no bona fide in the dispute raised by the tenant as to the standard rent. From the evidence of Appellant-landlord admittedly there was default in payment of rent for more than six months and the tenant was liable to be evicted Under Section 12(3)(a) of the Bombay Rent Control Act.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5284 of 2006

Decided On: 12.04.2017

 Anil Kumar Dadurao Dhekle Vs. Rukhiben and Ors.

Hon'ble Judges/Coram:

Kurian Joseph and R. Banumathi, JJ.

Citation: (2017) 14 SCC 215

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Whether dispute as rate of rent can be raised by landlord or tenant?

 The last submission of mr. Diwan is that Section 12(3)(a) does not specifically state whether the dispute referred to is by the tenant or by the landlord, and, therefore a question may arise as to whose bona fides are required to be considered. Section 12(3)(a) deals with the rights of a landlord to eject a tenant on fulfilment of certain conditions. Theoretically, Mr. Diwan is right that even a landlord is entitled to raises such a dispute, there would be no question of his bona fides being considered, because, by his own volition, he takes the case out of Section 12(3)(a). Such a contingency, however, cannot arise when a landlord seeks possession of the premises from a tenant on the ground of non-payment of rent. By making out a case that the rent charged by the landlord is not the standard rent, what the tenant desires is that his case should be brought under Section 12(3)(b). In the context, therefore, the "dispute" referred to in S. 12(3)(a) would mean 'a dispute raised by the tenant and not by the landlord'. When the landlord himself raises a dispute, and , in our opinion, such a contingency will never arise, it can only be for asking more rent than he has been changing to his tenant. If the landlord raises such a dispute seeking to charge more amount of rent and permitted increases to the regnant,. it would, in any case, ipso facto mean that the tenant has a bona fide dispute about the standard rent and permitted increases,Looked at form any angle, we do not see that the problem posed by Mr. Diwan about the consideration of the "bona fides" is acceptable on the interpretation of the word 'dispute" in Section 12(3)(a).

59. In the result, we hold that the "dispute" contemplated under Section 12(3)(a) must be a "bona fide" dispute to enable a tenant to claim benefit under Section 12(3)(a).

IN THE HIGH COURT OF BOMBAY

Special Civil Appln. No. 2353 of 1968 with Spl. C.A. Nos. 89 of 1968 and 693 of 1969

Decided On: 24.09.1973

 Yeshbai and Anr. Vs.  Ganpat Irappa Jangam and Anr.

Hon'ble Judges/Coram:

Balkrishna Narhar Deshmukh and I.G. Shah, JJ.

Citation: AIR 1975 Bom 20

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Whether decree for eviction can be passed in appeal if standard rent is not paid during pendency of appeal?

The Apex Court in Mranalini B. Shah and Anr. v. Bapalal Mohanlal Shah A.I.R. 1980 S.C. 353, considered the expression "regularly" as used in Section 12(3)(b) of the Bombay Rent Act. The Apex Court held that the provisions of Clause (b) of Section 12(3) are mandatory and must be strictly complied with by the tenant during the pendency of the suit or appeal if the landlord's claim for eviction on the ground of default in payment of rent is to be defeated. The Apex Court further observed that if the tenant persistently defaults during the pendency of the suit or appeal in paying the rent, the Court has no discretion to treat what were manifestly irregular payments as substantial compliance.

13. In Lalchand Jematmal v. Ramchhodbhai Shankerbhai Patel and Ors. A.I.R. 1968 Guj 172, the Full Bench of the Gujarat High Court interpreted Section 12(3)(b) of the Bombay Rent Act. The Full Bench of the Gujarat High Court observed as under:

In the light of the above discussion we hold that Section 12(3)(b) of the Rent Act) applies even at the appellate stage and the words "till the suit is finally decided" occurring in Section 12(3)(b) refer also the decision of the suit in appeal by the Appellate Court when an appeal is preferred by the landlord against a decree passed by the trial Court dismissing his suit and the question arises before the Appellate Court whether the tenant is entitled to the protection of Section 12(3)(b), the Appellate Court would have to consider whether the tenant has, after paying or tendering in Court the arrears of standard rent and permitted increases on the first day of hearing of the suit or, op. or before such other date as might have been fixed by the Court, continued to pay or tender in Court regularly the standard rent and permitted increases till the decision of the appeal.

There cannot be duality of opinion that the appeal is continuation of the suit. It is imperative, therefore, that cause of action for the suit would continue even during pendency of the appeal. The Appellate Court is entitled to take cognizance of the subsequent developments. It is difficult to countenance the argument, therefore, that nonpayment of the standard rent during pendency of the appeal would give rise to separate cause of action and such an event cannot be taken into account so as to pass decree under Section 12(3)(b) of the Bombay Rent Act.

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Writ Petition No. 22 of 2002

Decided On: 28.04.2009

Hari Bhuraji Mahajan and Ors. Vs. Rajendra Shankar Dawknor and Ors.

Hon'ble Judges/Coram:

V.R. Kingaonkar, J.

Citation: 2009(6) MHLJ483

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Whether default in payment of rent ends with payment of standard rent fixed by court?

With regard to the view taken by the High court on the default of the payment of rent, it is contended by Shri M.C. Bhandare that the view taken that the monthly tenancy gets converted into yearly tenancy is untenable. Though the tenancy is a composite one, the monthly rent requires to be paid at the end of every succeeding month. If there is any written agreement within the stipulated time, the contracted monthly tenancy cannot be, by judicial interpretation, converted into yearly tenancy. On that premise, it cannot be held that he has not committed default in payment of rent, but we need not decide it on the view we have taken. Since the standard rent has already been fixed by the court and deposited by the tenant, the default does not subsist. The concept of wilful default does not apply to the action under this Act. Therefore, if there is any default in payment of the rent and if the amount so paid gets adjusted after the determination of the standard rent, necessarily, the default originally existing ceases to operate.

Supreme Court of India

Ansuyaben Kantilal Bhatt vs Rashiklal Manilal Shah & Anr on 9 April, 1997

Bench: K. Ramaswamy, D.P. Wadhwa

Citation: AIR 1997 SC 2510

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Whether court can consider question of standard rent if tenant has not raised it within one month from date of service of notice?

A similar question has arisen before the Supreme Court in the case of Harbanslal Jagmohandas v. Prabhudas Shivlal MANU/SC/0480/1976 : [1976]3SCR628 and the relevant Head Note runs as follows:--

"In order to avoid the operation of S. 12(3)(a) of the Act the dispute in regard to standard rent or permitted increases must be raised at the latest before the expiry of one month from the date of service of notice under Section 12(2) of the Act and it is not enough to raise a dispute for the first time in written statement . ................... ....................

The view that disputing within one month of the service of the notice terminating the tenancy is one mode of raising a dispute and there is another mode of raising the dispute at any stage of the suit nullifies and provisions contained in Section 12 and Explanation thereto and confers a right on the tenant where the legislative does not contemplate such a right".

6. This Court in the case of Jaypal Bandu Adake v. Basavali Gurulingappa Mhalank MANU/MH/0262/1982 : AIR1982Bom563 , has also considered this question and the following Head Note makes the position clear:--

"The only way to prevent a decree for eviction being passed under the provisions of Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act is that the tenant must make an application raising a dispute regarding rent and must ask for fixation of standard rent under Section 11(3) of the Bombay Rents, Hotel and Loading House Rates Control Act as required by Explanation I to Section 12. There is no other mode permissible for raising a dispute as to standard rent for the purpose of Section 12 of the Bombay Rents Act. By raising a dispute with regard to standard rent by the tenant in a reply to the demand notice before the expiry of one month without making an application under Section 11(3) read with Explanation 1 to Section 12, the Court will not be prevented from passing a decree for eviction under the provisions of S. 12(3)(a).................."
It is thus clear that whenever a Court has to consider a case under Section 12(3)(a) of the r Act. the question of standard rent cannot be gone into unless the tenant has made an application for the purpose within one month from the receipt of the notice.
IN THE HIGH COURT OF BOMBAY

Spl. Civil Appln. Nos. 2439 and 2784 of 1978

Decided On: 22.11.1982

Chhaganlal Mulchand Jain Vs. Narayan Jagannath Bangh

Hon'ble Judges/Coram:
M.N. Chandurkar and B.C. Gadgil, JJ.

Citation: AIR 1983 Bom 212

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Whether standard rent will be payable from date of filing of application for grant of standard rent?

However, it is to be noted that the direction to pay standard rent has been given from the date of execution of the sale deed in favour of the landlady. The standard rent has been directed to be paid from 1-3-2008 till filing of the suit. This finding has again been confirmed by the appellate Court. It is, however, to be noted that the landlady had sought determination of standard rent by filing an application in that regard alongwith the suit for eviction. The suit in question was filed in October 2010 and in the application for fixation of standard rent, a prayer was made to fix the same from 1-11-2010 onwards. When an application is moved for fixing standard rent under Section 8(1) of the said Act, on such standard rent being fixed, it would be ideal for the same to be directed to be paid from the date of the application. The reason for the landlady to seek determination of standard rent is because she found the same to be on a lower side. She therefore sought the same to be fixed by moving an application under Section 8(1) of the said Act. There could not have been a direction to pay the same retrospectively. Reference in this regard can be made to the decision of the Nagpur High Court in Kewalchand Kastoorchand v. Samirmal Jaini and another MANU/NA/0060/1952 : 1953 NLJ 294. It has been held by the Division Bench that once fair rent is determined, the same would have prospective operation and such fair rent can be directed to be paid from the date such application is moved.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 211 of 2015

Decided On: 30.06.2016

 Zainab Bee Vs. Prabhakar Rajaram Kharwade

Hon'ble Judges/Coram:A.S. Chandurkar, J.

Citation: 2017(2) MHLJ 374

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Rateable value for payment of property tax is to be fixed on the basis of standard rent

In my opinion, the Small Causes Court has erred in allowing the appeal. The observation of the learned Judge that there can be no distinction in the rateable value payable in respect of commercial premises and residential premises is without any basis. As rightly submitted by Mr.Ketkar, the provisions of Section 129 of the Bombay Provincial Municipal Corporations Act indicate that there can be a distinction drawn between the rates of taxes paid for commercial and residential premises. The rateable value is to be fixed dependent upon the standard rent. It is obvious that the standard rent payable by a tenant in respect of commercial premises and residential premises would be different. The standard rent for commercial premises would obviously be higher and consequently the rateable value for those premises. The learned Judge has erred in accepting Rs.107 as the standard rent for the shop only because that was the standard rent payable in respect of a residential flat in the same building.

Bombay High Court

Pune Municipal Corporation ... vs Dnyaneshwar Nivrutti Narhare on 25 March, 2008

Equivalent citations: 2008 (3) MhLj 853:2008(4) ALLMR375

Bench: Nishita Mhatre, J.

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