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Judgment
In this landlord tenant litigation the petitioners tenants herein have challenged the judgment and decree passed by the learned 4th Extra Assistant
Judge Rajkot, on 3 1 st July, 1984, in Civil Appeal No. 166 of 1981 dismissing the petitioners'' appeal, confirming the judgment and decree for
possession passed by the trial Court, namely, the Small Causes Court at Raikot in Civil Suit No. 787 of 1979 and further passing a decree for the
amount of Rs. 1772.70 by way of municipal taxes allowing the cross-objections of the respondents.
The facts in brief are as under:
The petitioners are the brothers and they faced the aforesaid Civil Suit No. 787 of 1979 (old Civil Suit No. 574 of 1979) filed by the respondents
on the grounds that the petitioners were separate in all respect, that the petitioner No. 1 had taken on lease one block on ground floor of the
property in question and described herein as ''the suit premises'' at a monthly rent RS 200/- for his residence, that the block consisted 3 rooms, a
kitchen, a store room, a bath room and a lavatory, that the petitioner No. 1 was liable to pay taxes over and above the rent that the rent was paid
up to 30th April, 1972 and it was in arrears from 1st May, 1972, that the petitioner No. 1 instead of using the suit premises for his own residence,
unlawfully sublet, transferred or assigned the same to the petitioner No. 2; that the respondents required the suit premises reasonably and bona
fidely for their personal occupation; that petitioner No. I built or acquired vacant possession of or had been allotted a suitable residence after the
coming into force of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, hereinafter referred to as ''the Act'', and that the
hardship of the respondents would be greater if the decree for possession was not passed. Before filing the suit the petitioner No.1 was served
with a notice of eviction dated 24th April,1973 demanding the arrears of rent and possession of the suit premises. Instead of complying with that
notice, the petitioner No. I filed Civil Misc. Appln. No. 228 of 1973 (Now No. 8 of 1979) for fixation of standard rent. Defendants also resisted
the suit as per written statement Exh. 14 inter alia contending that the defendants i.e. petitioners were the members of one joint family and they had
taken the suit premises on lease for the joint family at a monthly rent of Rs. 150/-. This did not include house tax as per the rent note that was
executed in favour of the respondents-landlord. It was the case of the petitioners that the petitioner No. 1, his wife, six sons, two daughters and his
younger brother i.e. petitioner No.2, his wife, two sons and three daughter; were members of the joint family and as they all could not be
accommodated in the suit premises and in the new house also, half of the members of the joint family shifted to the new house and half of the
members of the family continued to stay in the suit premises. According to the petitioners, if petitioners were directed to vacate the suit premises,
their hardship would be greater than that of the respondents. The petitioners also contended that the contractual rent was not the standard rent and
the standard rent could not be Rs. 150/-- which was the rent previously fixed.
Both the suit as well as the Misc. Application came to be heard on evidence by the trial Court. After hearing the parties the trial Court found that
the standard rent of the premises would be Rs. 150/ - p.m. inclusive of taxes; that the petitioner No. I was a tenant in arrears of rent; that he was
however ready and willing to pay the rent, that he unlawfully sublet, assigned or transferred the suit premises in favour of the petitioner No. 2, that
the petitioner No. I i.e. defendant No. I had built or acquired vacant possession of or had been allotted suitable residence after coming into force
of the Act, that a sum of Rs. 5,400/- was due to the plaintiff, that the notice was legal and valid and that the landlord-plaintiff was entitled to the
possession of the suit premises. In the result, the trial Court directed the petitioners to hand over the vacant and peaceful possession of the suit
premises to the plaintiff-respondent on or before 21st August, 1991 and also directed the petitioner No. I to pay Rs. 5,400/- by way of arrears of
rent and mesne profits at the rate of Rs. 150/- p.m. from the date of the suit till the possession of the suit premises were handed over to the
plaintiff-respondent. Parties were directed to bear their cost.
As stated above, the matter was taken in appeal before the learned 4th Extra Assistant Judge, Rajkot, who in addition to the decree for
possession, also passed decree for the amount of municipal taxes by way of permitted increase allowing the cross objections of the respondents.
In this revision application the learned advocate for the petitioners has challenged the decree for eviction on both the grounds, namely the ground
of acquisition of suitable residence by the petitioner No.1 and unlawful assignment or transfer of the suit premises by petitioner No. 1 to the
petitioner No. 2. She has also contended that the decree of house tax passed by the appellate Court is not in accordance with law.
In so far as the decree for eviction on the ground of acquisition of suitable residence and unlawful assignment is concerned , after having gone
through the evidence adduced before the trial Court, the learned advocate for the petitioner was not in a position to show any material or any part
of the evidence which was not taken into consideration by the trial Court while appreciating the evidence. Shortly stated, she was not in a position
to show that the judgment of either of the Courts is perverse or is not in accordance with law or is not based on any material on record. Since the
finding about petitioner No. 1 having acquired suitable residence and since the finding petitioner having unlawfully assigned the suit premises to
petitioner No. 2 is not challengeable on any of these grounds in this revision application, there is no reason to disturb the concurrent findings of
both the Courts below.
Miss K. M. Shah, learned advocate for the petitioners, then prayed for two years time to enable the petitioners to vacate the suit premises and
when she was confronted with the condition precedent for grant of time about the undertaking to be filed before this Court, she submitted that the
grant of time might be divided into ''6 months'' time if the undertaking is not given and ''3 years'' time if the undertaking is given. Mr. S. M. Shah,
learned advocate for the respondents has no objection for granting time to vacate the suit premises in this manner. This will be taken care of while
passing of the final order.
The second submission made on behalf of the petitioners is with regard to the permitted increase awarded by the appellate Court. The appellate
Court has dealt with the question under Point No. 4 at page 12 of the certified copy of the judgment, thus, ""regarding the house tax and municipal
tax and education cess, it is true that it is not mentioned in the rent note that the taxes are to be paid by the tenant. However, it should be borne in
mind that the education cess is recoverable by the landlord from the tenant and it is the statutory liability of the tenant to pay the cess for the
property which is let to him. Moreover, the taxes can be recovered by the landlord from the tenant as permitted increases.
Now in so far as 50% of the education cess amounting to Rs. 787.20 is concerned, there is no grievance made on behalf of the petitioners and,
therefore, that point is not in dispute. What is in dispute is with regard to the amount of house tax in the sum of Rs.985.50 awarded by way of
permitted increases by the appellate Court. In this connection Mr. Shah, learned advocate for the respondents drew my attention to the provision
contained in S. 10 of the Act which reads as under:
''''10. Where a landlord is required to pay to a local authority in respect of any premises any rate, cess or tax imposed or levied for the purposes of
such authority he shall be entitled to make an increase in the rent of the premises by an amount not exceeding the increase paid by him (by way of
such rate, cess or tax over the amount paid) in the period of assessment which included the date of the coming into operation of this Act (or the
date on which the premises were first let, whichever is later), and such increase in rent shall not be deemed to be an increase for the purposes of S.
7.
By pressing into service the aforesaid provision of the Act, Mr. Shah submitted that the finding of the appellate Court stands supported by the
provision of law as reproduced above. He further submitted that on the date of the rent note which was the first day of letting the tenant-petitioner
No. 1 was not saddled with the liability to pay the house tax. According to him while fixing the standard rent, the Court was justified in considering
the right of the landlord to claim permitted increases. While considering the above referred provision, it has to be borne in mind that the rent control
legislation is beneficial to the tenants and restrictive of the rights of the landlord. One of the restrictions on the rights of the landlord is as contained
in S. 7 of the Act. By virtue of this provision it would be unlawful for the landlord to charge rent higher than the standard rent. The scheme of the
Act then is to see that the landlord is not penalised by making provision for certain contingencies. Therefore, the legislature thought it fit to make
appropriate provisions for conferring some rights to the landlord for enabling the landlord to claim some increase over the standard rent. Section
10 of the Act is one of such provision. It has, therefore, to be seen as to what extent the landlord is permitted to make an increase. That can be
seen from the usage of the words ""he shall be entitled to make an increase in the rent of the premises by an amount not exceeding the increase paid
by him by way of such rate, cess or tax over the amount paid in the period of assessment which included the date of the coming into operation of
this Act or the date on which the premises were first let, whichever is later.x x x x x
Bearing in mind the landlord''s entitlement referred to in the aforesaid provision, it is clear that what is permitted is the increase in any rate, cess or
tax imposed or levied for the purposes of a local authority subsequent to the first date of letting in so far as the present case is concerned.
Therefore, the submission of Mr. Shah to the effect that the landlord would be entitled to the whole of the tax irrespective of whether the tax was
imposed at or before the date of the first letting cannot be accepted. The landlord would be entitled to an increase over the tax which was in
existence when the premises was first let. Therefore, for the purpose of getting permitted increase within the scope of S. 10 of the Act, the landlord
has to show what was the tax which was imposed on or before the first day of letting and what has been the subsequent increase (if increase
subsequent to first day of letting) in the rate or tax or cess by the local authority or for the benefit of local authority.
On a reference to the relevant receipts of the tax on the basis of which the permitted increase in the form of house tax allowed by the appellate
Court, it can be seen that it is for the whole of the tax amount and not the difference between the original tax and the increase in the tax. For that
purpose Mr. Shah learned advocate for the respondents drew my attention to Exh. 50 which is the tax bill of Rs. 129.60 which shows that that
was the amount of house tax imposed or levied for the benefit of the local authority in the year 1965-66 i.e. ending March 1966 which was the
year of first letting, as held upon appreciation of evidence by the trial Court. On a reference to the tax bills and receipts Exhs. 69, 74 and 76, Mr.
Shah worked out the increase in the imposition or levy of the tax after 1966. Such increase is worked out at Rs. 226.80 for the year 1975-76, Rs.
326.03 for the year 1977 and Rs. 326.03 for the year 1978, totaling to Rs. 878.86 . The conservancy tax was also imposed or levied for the
benefit of local authority for the first time in the year 1977 as can be seen from Exh. 74. The amount claimed by the respondents for this head of
the tax is Rs. 36/-. Adding Rs. 36/ - to Rs. 878.86, it gives the figure of permitted increase in the sum of Rs. 914.86 ps. Therefore, the amount
awarded by way of permitted increase shall have to be scaled down to Rs. 914.86 from Rs. 985.50. The decree passed by the appellate Court
for the permitted increase therefore, deserves to be modified accordingly.
In the result, the present revision application succeeds only to the extent of the decree with regard to permitted increase, to the extent that the
respondents would be entitled to the permitted increase as under:
Rs. 787.20 + Rs. 914.86 = R-s.1702.06 instead of Rs. 1772.70 ps.
Accordingly the appellate Court''s decree awarding Rs. 1772.70 ps. by way of permitted increases on account of municipal tax and education cess
is modified to the aforesaid extent, that is to say, to the extent of Rs. 1702.06ps. Rest of the decree of the appellate Court is confirmed while
extending the time to vacate the suit premises as per the following directions:
The time to vacate the suit premises is granted up to 10th July, 1993 on condition that the petitioners should file undertaking before this Court
to the effect that the petitioners shall not sublet, transfer or assign in any manner to anybody and that they shall pay all the arrears of rent and mesne
profits, if due up to the date of the undertaking and shall go on paying the arrears of rent and mesne profits as and when falling due till the time
granted by this order. Upon the petitioners failing to give undertaking as aforesaid, they shall vacate the suit premises on or before 11th January,
1992.
Rule is made absolute to the aforesaid extent only with no order as to costs.
Rule made absolute