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Judgment
V. Balasubrahmanyan, J.—This revision comes up under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. It has to do with
the determination of fair rent of one of a group of buildings belonging to the landlord. The petitioner in this revision is a tenant of one building out of
a group of buildings, all belonging to the same landlord, which are clustered together with open spaces in between.
The landlord filed an application u/s 4 of the Act for fixation of fair rent for the building under the occupation of the revision petitioner. The fair
rent was fixed by the Rent Controller and confirmed by the appellate authority, on the basis of the requirements laid down under that provision.
The one and only point, which is taken up in revision by the tenant is as respects the treatment to be accorded to the open space appurtenant to
the building in which he is in occupation. The general rule laid down by proviso to Section 4(4) of the Act is, that 50% of any open space in which
a building is situate shall be treated as forming part and parcel of the land on which the building stands. The significance of the rule is, that the
market value not only of the plinth area of the land, which is equivalent to the plinth area of the building, but also 50% of the appurtenant land shall
be taken note of as part of the aggregate value of the building for the purpose of applying the statutory percentage of 12 or 9, as the case may be.
The contention of the tenant before me, as it was before the Rent Controller and the appellate authority, is based on the fact that the open space
adjacent to the building under the tenant''s occupation, was not exclusively meant for the use of the tenant alone, but was, in fact, a common open
space appurtenant to both the building under the tenant''s occupation as well as another building in the same complex under the occupation of
another tenant. On this factual circumstance it was urged that the open space should not be taken note of at all for the purpose of valuation tinder
the proviso to Section 4(4) of the Act. The point of principle urged by the tenant''s learned Counsel is, that the requirement to take into account
50% of the total area of the appurtenant land for the purpose of valuation can only apply in a case where the appurtenant land is exclusively meant
for the tenant''s benefit, and not appurtenant land over which others have similar claims.
I do not think I should accept this contention as well-founded. I base my decision on the terms of the proviso to Section 4(4) of the Act, as well
as on the overall scheme of the statutory provisions relating to fixation of fair rent. The fixation of fair rent under the statute has undergone a radical
change of basis in 1963. Prior thereto, the provision for fair rent fixation was consigned to the, Rules framed under the Act. However, both under
the old Rules and the present amended section, the manner of arriving at the fair rent for any given building is not by way of comparison of rents in
adjacent buildings of the locality or some other standard, which straightaway appertains to the fixation of rent as such, under a direct method or
approach. On the contrary, the method adopted under the law is to arrive at the aggregate capital value of the building as such and elicit therefrom
the fair rent as a percentage on the total capital value. In the case of residential buildings, the statute has now fixed 9% on the building, land and
other amenities, as the measure of fair rent. For non-residential buildings, it is 12%. On this broad basis, Section 7 provides for detailed methods
of calculation. A consideration of the scheme of this section as a whole, would show that fixation of fair rent is not to be the end-result of an
adjudicatory process based on the realities of the situation, but is to be determined on the basis of a rule of thumb or statutory formula. In that
formula would go in: (1) the market value of the building; (2) the cost of construction less depreciation; and (3) the value of the amenities.
The results of valuation under all the three heads will have to be totalled up and the statutory percentage applied to it so as to arrive at the fair rent.
Each of the components, which goes into the final determination, is itself subject to certain detailed provisions. It is in this context that Section 4
contains a proviso, which has a bearing on the market valuation of the land. The provision begins by laying down that the land on which the building
stands must be valued on the basis of the market value. The proviso to the section lays down that the land on which the building stands must also
cover the appurtenant land upto a maximum of 50%.
In other words, if the appurtenant land of a given building is less than 50% of the plinth area, only the actual area of the appurtenant land will be
taken into account. If on the contrary, the area of the appurtenant land is 50% or more of the plinth area, then, only 50% of the appurtenant land
shall be, deemed to be the land on which the building stands for the purpose of evaluating the market value of the land. With a provision such as
this, it would be incorrect to introduces any idea based on the realities of any given factual situation. As I said, the whole idea of fair rent fixation is
based on an artificial formula, apparently intended to serve as an easy-free basis for the Rent Controllers to adopt whenever the matter comes
before them for fixation of fair rent. The whole thrust of the provisions of Section 4 would seem to me intended to make the task of the Rent
Controller easy, and not so much to arrive at the fair rent on some approximation to reality. In this view, therefore, the argument of the tenant''s
learned Counsel that the land appurtenant to the building under his occupation is a common land and not exclusively for his use, has no relevance to
the discussion.
Learned Counsel for the tenant questioned the correctness of the figures adopted by the authorities below as respects the plinth area of the
appurtenant land. According to the tenant, the plinth area is 1027 sq. ft., whereas the authorities had adopted 1050 sq. ft. It may well be that the
date relating to the measurement of plinth area, as put forward by the tenant both before the Rent Controller and the appellate authority must have
been based on some material evidence. Unfortunately, that evidence has not been produced before either authority. As an authority sitting in
revision T cannot act on the factual data now urged. The finding of the authorities below on the plinth area, which is purely one of fact, was come
to by them on the materials before them.
For all the above reasons, the revision petition has no merits. It is accordingly dismissed. But there will be no order as to costs.