The case involves a dispute between the tenants (appellants) and the landlord (respondent) regarding fair rent determination during a contractual tenancy. The issue of whether landlords can apply for rent enhancement during a tenancy is central to the arguments presented by both parties. The court’s decision will impact the balance of rights between tenants and landlords under the Rent Control Legislation. Let’s delve into the details of this significant legal battle.
Facts
- The previous landlord Osman Bin Saleh transferred the premises to the current landlords by a registered sale deed dated 28.03.2008.
- The appellants entered into a lease agreement in 1990 with the premises let out for 20 years.
- The appellants agreed to a monthly rent of Rs.1840/- excluding electricity and water charges.
- The High Court directed the tenants to pay fair rent from the date of the petition with future enhancement of 10% for every two years.
- An appeal filed by the appellants against the III Additional Rent Controller’s judgment was dismissed by the Chief Judge.
- The civil revision petition filed by the appellants against the Chief Judge’s order was dismissed by the High Court for the State of Telangana at Hyderabad.
- Contract of tenancy between the appellants and the landlord was to subsist till 31.07.2010.
- The respondent-landlord had no authority or jurisdiction to file the application for enhancement of rent on 29.09.2009.
Also Read: Interpretation of Lease Agreement and Compulsory Registration
Arguments
- The argument from the Petitioner’s side is that the landlord is permitted to file an application for determining fair rent during the contractual tenancy as per the relevant legislation.
- Section 4 of the Telangana Act, 1960 allows both tenants and landlords to apply for fixing fair rent.
- The Petitioner’s counsel relies on a minority judgment in M/s. Raval and Co. vs K.G. Ramachandran, 1974(1) SCC 424, to support the position that during a contractual tenancy, the landlord cannot apply for fixing fair rent.
- The Petitioner’s counsel argues that allowing landlords to file for rent enhancement during a contractual tenancy would go against the principles of Rent Control Legislation meant to protect both tenants and landlords.
- The counsel also mentions the Model Rent Control Legislation circulated by the Central Government, which prohibits landlords from applying for fair rent during a contractual tenancy.
- The Respondent’s counsel contends that the reliance on the minority judgment is misplaced and that the majority opinion of M/s. Raval & Co. should be considered binding.
- Both parties refer to the seven-Judge Bench judgment in V. Dhanapal Chettiar vs Yesodal Ammal which emphasizes the importance of balancing the rights of tenants and landlords in Rent Control Legislation.
- During the contract of tenancy, no application can be filed for fixing fair rent
- Provision is detrimental to both tenant and landlord
Also Read: Enhancing Compensation and Modifying Sentences: A Legal Analysis
Analysis
- The concept of determination of fair rent operates equally for tenants and landlords.
- In cases where tenants agree to pay unreasonable higher rent due to urgent need, the provision restricting them from applying for fair rent determination during tenancy can harshly impact the tenant.
- A suggested Model Rent Control Legislation precluding landlords from applying for fair rent determination during contractual tenancy does not hold against the statutory provisions of the 1960 Act.
- Model legislations are merely guidelines and cannot override existing statutory provisions like the 1960 Act.
- An illustration of the Central Government’s circular is given to emphasize this point.
- While some landlords like in the case of Raval may benefit from the protection of fair rent determination, it is not a direct authority on the issue at hand.
- The object of the Act is to ensure that neither the landlord charges more than the fair rent of the premises nor the tenant is forced to pay higher rent than the fair rent.
- Section 4 of Tamil Nadu Act 18 of 1960 allows for application for fixation of fair rent by both landlords and tenants.
- The fair rent is fixed for the building and is payable by the tenant, whether contractual or statutory.
- The Act permits fair rent fixation regardless of any existing contract.
- The minority judgment, in this case, restricts landlord’s application for fair rent determination until after the tenancy is determined.
- The Act aims to balance the rights of both landlords and tenants, ensuring fairness in rent determination.
- The examples provided illustrate scenarios where landlords require protection and intervention for fair rent fixation.
- Landlords can apply for fair rent determination even during the currency of contractual tenancies as per established judgments.
- The court held that the appellants did not provide any other submission to counter the respondent’s argument.
- As a result, the court considered only the respondent’s submission for this specific part of the judgment.
- The appellants failed to present any additional points or arguments in relation to this aspect of the case.
Also Read: SPML Infra Limited vs. Govt. of Arunachal Pradesh
Decision
- Appeal has been dismissed due to lack of merit.
- No specific points in favor of the appellant were found.
- The appeal has been dismissed based on the brief facts of the case considered.
- The decision to dismiss the appeal is final.
Case Title: N. MOTILAL Vs. FAISAL BIN ALI (2020 INSC 114)
Case Number: C.A. No.-000710-000710 / 2020
