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Judgment
V. Ramasubramanian, J.—The respondent/landlord filed a petition in RCOP No. 1745 of 2003 on the file of the Rent Controller, Chennai,
u/s 4 of The Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, seeking fixation of fair rent in respect of the building in the occupation of
the petitioner/tenant. By an order dated 30.4.2004, the Rent Controller fixed the fair rent at Rs. 38,693/- per month.
Contending that the fair rent fixed by the Rent Controller was low, the respondent/landlord filed RCA No. 812 of 2004. Similarly, the
petitioner/tenant filed RCA No. 1577 of 2004. Both the appeals were taken up together and by a common judgment dated 15.9.2005, the
Appellate Authority dismissed the tenant''s appeal and allowed the landlord''s appeal enhancing the fair rent to Rs. 53,190/-. Aggrieved by the said
decision, the tenant has come up with the present civil revision petitions.
I have heard Mr. T.V.Ramanujun, learned Senior Counsel for the petitioner/tenant and Mr. S. Parthasarathy, learned Senior Counsel for the
respondent/landlord.
At the outset, Mr. T.V. Ramanujun, learned Senior Counsel appearing for the petitioner/tenant, raised the question of maintainability of the
proceedings under the Rent Control Act, on the ground that the respondent/landlord is a Public Charitable Institution, whose buildings are exempt
from the purview of the Act, by virtue of a notification G.O.Ms. No. 2000, Home, dated 16-8-1976 issued in exercise of the power conferred u/s
29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The contention that the respondent is a Public Charitable Trust exempt from
the purview of the Act, was raised by the petitioner/tenant even before the Rent Controller, but the same was negatived by the Courts below.
Therefore the learned Senior Counsel contended that the orders of both the Courts below in this regard are perverse and liable to be set aside.
The respondent is admittedly registered as a Society under the Societies Registration Act, 1860. The Certificate of Incorporation issued by the
Registrar, along with the bye-laws (described as Rules and Regulations of the Society) were filed by the petitioner/tenant as Ex. R2 before the
Rent Controller. This Ex. R2 shows that the Society was formed in the year 1926, under the guidance of a spiritual guru. The aims and objects of
the Society are detailed in Clause-II of the Rules and Regulations, which read as follows:
(1) To protect all living creatures from all kinds of cruelties by all possible means.
(2) To educate public opinion in favour of vegetarianism from the point of health and the highest principles of mercy and against meat eating and
drink habits.
(3) To draw the attention of the people towards the stoppage of animal sacrifice of all kinds whether they are sanctioned by religion, or otherwise
and to appeal to the authorities to have them discontinued.
(4) To distribute suitable literature relating to ""Non-killing"" among the people in all the provincial languages, to carry on propaganda among non-
vegetarians through propagandists and to adopt such other methods as may be appropriate for the purpose.
(5) To take up other questions in the interests of human welfare provided they are non-political.
Other than marking the certified copy of the Rules and Regulations of the Society, as Ex. R2, the petitioner/tenant marked three letters dated
3.9.2001, 8.12.2001 and 28.7.1976 and a legal notice dated 29.1.2002 issued by the respondent/landlord, as Exx. R3, R4, R5 and R6. In Ex.
R3, the respondent claimed that the premises was required for promotion of their public charitable objectives. In Ex. R4 also a similar claim was
made that the premises in the occupation of the petitioner was required for the promotion of public charitable objectives. In Ex. R5, the respondent
claimed that the premises is exempt from the provisions of the Rent Control Act. In the legal notice, Ex. R6, the respondent claimed that it is a
Public Charitable Institution. Therefore in the light of these documents, Mr. T.V. Ramanujun, learned Senior Counsel for the petitioner contended
that the proceedings under the Rent Control Act, were not maintainable, especially when the respondent themselves claimed it to be a public
charitable institution.
In support of the above contention, Mr. T.V. Ramanujun, learned Senior Counsel for the petitioner relied upon certain passages from the book
of B.K Mukherjea on ""The Hindu Law of Religious and Charitable Trusts"" (fifth edition by A.C. Sen), which read as follows:
2.14. Prevention of cruelty as charitable purpose. -- Prevention for cruelty to animals, if the animals are useful to man, would be regarded as a
charitable purpose. In the case of University of London v. Yarrow (1857) De G.&J. 72, there was a bequest for establishing an institution for
investigating, studying and curing maladies, distempers and injuries to which quadrupeds and birds useful to man might be found subject, and the
bequest was held to create a valid charitable trust. Prevention of cruelty to animals whether domestic or not has itself been regarded as a charitable
object. Thus, gifts to a society for promoting prosecutions for cruelty to animals whether domestic or not has itself been regarded as a charitable
object. Thus, gifts to a society for promoting prosecutions for cruelty to animals {Re Doughlas, 35 Ch. D. 472} or for founding an antivivisection
society {Re Foveaux, (1895) 2 Ch. 501} have been held to be charitable. In re Foveaux, In re Foveaux (1895) 2 Ch. 501 Chitty, J. observed as
follows:
Cruelty is degrading to man, and a society for the suppression of cruelty to the lower animals whether domestic or not has for its object not only
the protection of the animals themselves, but the advancement of morals and education among men. The purpose of these societies, whether they
are right or wrong in the opinions they hold, is charitable in the legal sense of the term.
2.15. Suppression of vivisection held not to be charitable. -- The decision in Re Foveaux (1895) 2 Ch. 501 is, however, no longer good law as it
has been expressly overruled by the House of Lords in National Antivivisection Society v. Inland Revenue Commissioners (1948) AC 31 : (1947)
2 All ER 217 , where it has been held that a society which has its object securing an alteration of the law by providing for the total suppression of
vivisection is not a body of persons established for charitable purposes only within the meaning of the Income Tax Act. In the opinion of the
majority of the Law Lords (Lord Porter dissenting), any assumed public benefit in the direction of the advancement of morals and education of the
public is far out-weighed in such cases by the detriment to medical science and research and consequently to public health which would result if the
society succeeded in achieving its object. It was further held that, the main object of the society was political inasmuch as it aimed at a revision of
the existing law relating to vivisection.
2.16. Trusts for benefit of animals. -- In all the ""animal cases"" that have been decided by the Courts of England, the cardinal principle seems to be
that a trust in favour of animals depends for its validity on the question whether such a gift produces benefit to mankind. ""So far as I know,
observed Russel, L.J. in In Re Grove Grady (1929) 1 Ch. 557 ""there is no decision which upholds a trust in perpetuity in favour of animals upon
any other ground than this, that the execution of the trust in the manner defined by ""the creator of the trust must produce some benefit to
mankind.... In my opinion the Court must determine in each case whether the Trusts are such that benefit to the community must necessarily result
from their execution.
This enunciation of the law was, in a way, accepted by the House of Lords in the National Antivivisection Society v. Inland Revenue
Commissioners referred to above. Prevention of cruelty to animals might have the result of developing the finer side of man and, in that sense, might
lead to advancement of public morals. In the House of Lords case cited above, such benefit was held to be far out-weighed by suppression of
vivisection which was beneficial to human beings. When, however, no such question is involved, any trust for relieving the sufferings of old or
maimed animals would be a good charitable trust. In re Moss, Hobrough v. Harvey (1949) All ER 495, the question arose as to the validity of a
disposition for the welfare of cats. A testatrix directed by her will that her lease-hold house should be sold and one-half of the proceeds of sale be
given to a certain person ""for her to use at her discretion for her work for the welfare of cats and kittens needing care and attention."" It was held
that the gifts were valid inasmuch as they were calculated to develop the finer side of human nature, of which care for old and sick animals was a
manifestation and therefore were for the benefit of mankind.
Mr. T.V. Ramanujun, learned Senior Counsel for the petitioner also relied upon the following decisions, in support of his contentions:
(i) Lalta Prasad Vs. Brahmanand and Others, , wherein a Division Bench of the Allahabad High Court held (in paragraph-10) that a Trust for
erection of Goshala is a Trust for Charitable and Religious purposes, according to Hindu Law.
(ii) COMMISSIONER OF Income Tax, GUJARAT Vs. SWASTIK TEXTILE TRADING COMPANY PVT. LTD., , wherein a Division
Bench of the Gujarat High Court held that the donations to a Trust whose objects included ""establishing, maintaining, running and helping Goshalas,
Panjarapoles and other similar Institutions for animals"", would be exempt u/s 80-G of the Income Tax Act, 1961.
(iii) Hyderabad Race Club Vs. Commissioner of Income Tax, , wherein a Full Bench of the Andhra Pradesh High Court, referred to the English
and Indian decisions and elicited the following principles, to determine if an Institution is charitable in character or not:
(a) A trust for improving the standard of cattle in our country is regarded as an object of general public utility because cattle is the mainstay of our
agricultural community and most important for the rural economy of India.
(b) A trust for the protection of cows and bovine cattle from premature deaths, neglect and deterioration and destruction and to save bovine cattle
by improving their breed and raising their economic standard, was for a charitable purpose under the head ''Any other object of general public
utility''.
(c) A trust created or institution established which tends to promote public morality by checking the innate tendency to cruelty towards animals
should be regarded as beneficial to the community as a whole and, therefore, charitable in character.
(iv) Vijayakumar v. Roman Catholic Church 2001 (2) L.W. 736, wherein Justice F.M. Ibrahim Kalifulla, followed a decision of Justice Abdul
Hadi, as he then was, and held that even a Society registered under the Societies Registration Act, would be entitled to the exemption under
G.O.Ms. No. 2000, Home Department, 16.8.1976.
(v) Chennai Vazhal Duraiyur Nadar Uravin Murai Magamai Sangam v. K.A.Gurusamy and eight Ors. 2004 (1) CTC 481, wherein a Division
Bench of this Court held that an application filed u/s 92 CPC, by a Society registered under The Tamil Nadu Societies Registration Act, is
maintainable, since the Society was formed with the object of doing charities to beneficiaries, by providing free education and assistance to
handicapped and economically down trodden people.
In response to the above, Mr. S. Parthasarathy, learned Senior Counsel for the respondent submitted that a Society registered under the
Societies Registration Act, may not come within the meaning of the word ""Trust"" and that the law governing Trusts, need not necessarily apply to
Societies. In support of his said contention, the learned Senior Counsel relied upon the following decisions:
(i) S. Guhan, etc. v. Rukmini Devi Arundale, etc. 100 L.W. 182, wherein a Division Bench of our High Court set aside a scheme framed u/s 92
CPC, in respect of a Society registered under the Societies Registration Act, on the ground the plaintiffs failed to establish the constitution of a
Trust and also omitted to implead such a Trust as a defendant in the proceedings.
(ii) The Advocate General v. Bhartiya Adam Jati Sewak Sangh and Ors. 2002 (1) CCC 122 (H.P.), wherein a learned Judge of the Himachal
Pradesh High Court held that in the absence of any pleading or evidence to show the creation of a Trust, either expressly or impliedly, Section 92
CPC, cannot be invoked in respect of a Society.
(iii) Abhaya Vs. Raheem, , wherein a learned Judge of the Kerala High Court held that Section 92 CPC, cannot be invoked in respect of a Society
registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955, when there is no material to show that
a Trust of public nature was ever created.
Mr. S.Parthasarathy, learned Senior Counsel for the respondent also submitted that the Government of Tamilnadu originally issued a
notification in G.O.Ms. No. 1998, Home, dated 12-8-1974 exempting all the buildings owned by ""Hindu, Christian and muslim religious trusts and
charitable institutions"". But later, a fresh notification was issued under G.O.Ms. No. 2000, Home, dated 16-8-1976, by which all the buildings
owned by ""Hindu, Christian and muslim religious public trusts and public charitable trusts"" were exempted. The second notification was in
supersession of the first one and hence the learned Senior Counsel contended that the substitution of the word ""institutions"" with the word ""trusts
gave an indication that the Government wanted to confine the benefit of exemption only to trusts and not to other type of institutions.
On an analysis of the decisions relied upon by the learned Senior Counsel on both sides, it is seen that irrespective of the Constitution of the
Institution, the Courts have looked into (i) the objects and purposes of the creation of the Institution and (ii) the entrustment of any fund or property
for public religious or charitable purposes. If the objects and purposes of creation of the Institution are of public religious or charitable nature and if
there was entrustment of any fund or property for such purposes, the Courts have treated them as Institutions which are entitled to certain
privileges such as the exemptions under various tax laws. At the same time, the Courts have also held those Institutions accountable to the public at
large, by making available the remedy u/s 92 CPC, with the limitations and restrictions inbuilt in the Section itself. It is with these fundamental
principles in mind that we should consider the question now raised in the revision petition.
As seen from the narration of facts, the respondent has invoked the provisions of The Tamil Nadu Buildings (Lease and Rent Control) Act,
1960, and the petitioner/tenant has taken a stand that the building of the respondent is exempt from the purview of the Act, by virtue of a
Notification issued u/s 29 of the Act. Interestingly, in most of the decisions cited by the learned Senior Counsel on both sides, the Institution in
question claimed the benefit of exemption either under the Income Tax Act or under the Rent Control Act and such claim was opposed either by
the Revenue or by the tenant, as the case may be. But the case on hand presents a contrary situation. In other words, the person who is entitled to
the benefit of the exemption, claims in this case that he is not entitled, but the person opposing him claims that he is. In view of this peculiar
situation, we will have to get back to the provisions of the Rent Control Act and the nature of the exemption granted, so as to test the validity of the
rival contentions.
As pointed out by a Division Bench of this Court in T.V. Angappan and T.V.Subramanian Vs. The State of Tamilnadu and Others, , the
precursor to the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, was The Madras Buildings (Lease and Rent Control) Act, 1949.
Section 13 of the 1949 Act also contained a provision which is in pari materia with Section 29 of The 1960 Act. The constitutional validity of
Section 13 of 1949 Act was upheld by a Constitution Bench of the Supreme Court in P.J. Irani Vs. The State of Madras, on the ground that there
is sufficient guidance available in the preamble and the operative provisions of the Act for the exercise of the discretionary power by the
Government. While upholding the constitutional validity of Section 13 of the 1949 Act, the Supreme Court traced the history of the Legislation and
the purpose of granting exemption to a class of buildings, in the following words:
The legislation was enacted for achieving three purposes: (1) The regulation of letting, (2) The control of rents and (3) The prevention of
unreasonable eviction of tenants from residential and non-residential buildings. The Act was the latest in the series of enactments and orders dating
back to the period of the Second World War when due, inter alia, to large scale movement of populations to urban areas, there was an acute
shortage of accommodation in the principal towns, as a result of which tenants ousted from buildings occupied by them on the termination of their
tenancies could not find alternative accommodation and were thrown on the streets, and thus owners of house-property could, if left unchecked,
unfairly exploit those who sought accommodation. The enactment in terms protected the rights of tenants in occupation of buildings from being
charged unreasonable rates of rent and from being unreasonably evicted there from.
Though the enactment thus conferred these rights on tenants, it was possible that the statutory protection could either have caused great hardship to
a landlord or was the subject of abuse by the tenant himself. It was not possible for the statute itself to contemplate every such contingency and
make specific provision there for in the enactment. It was for this reason that a power of exemption in general terms was conferred on the State
Government which, however, could be used not for the purpose of discriminating between tenant and tenant, but in order to further the policy and
purpose of the Act which was, in the context of the present case, to prevent unreasonable eviction of tenants.
Following the said decision, the Supreme Court subsequently upheld Section 3 (2) of the Madhya Pradesh Accommodation Control Act, 1961, in
State of Madhya Pradesh v. Kanhaiyalal 1970 MPLJ 973 (SC).
After the enactment of the 1960 Act, there was an attempt to make a fresh challenge to the power of exemption conferred u/s 29, in S.
Kandaswamy Chettiar Vs. State of Tamil Nadu and Another, . But, at the time of hearing of the writ petitions and appeals, the challenge to the
validity of Section 29 was given up before the Supreme Court on the ground that the issue was no longer res integra in view of the decision of the
Constitution Bench in P.J. Irani''s case. However, the petitioners and the appellants before the Supreme Court, continued their challenge to the
Notification G.O.Ms. No. 2000, Home Department, dated 16.8.1976, issued by the Government of Tamil Nadu in exercise of the power
conferred u/s 29 of the 1960 Act. But a three Member Bench of the Supreme Court upheld the said Notification G.O.Ms. No. 2000, by their
decision in S.Kandaswamy Chettiar''s case. Similarly, a challenge was made, though unsuccessfully, to the exemption granted to buildings owned
by Cooperative societies, in S.M. Mahendru and Company and Others Vs. State of Tamil Nadu and Another, .
I am impelled to make a reference to the decisions in P.J. Irani''s case, S. Kandaswamy Chettiar''s case and S.M. Mahendra''s case, on
account of the fact that the justification for the grant of exemption to certain buildings or class of buildings was traced by the Supreme Court in
those cases. In paragraph-10 of the decision in S. Kandaswamy Chettiar''s case, the Supreme Court extracted certain passages from the counter
affidavit filed on behalf of the State Government and held as follows:
Coming to the material furnished by the State Government on the basis of which the impugned exemption is sought to be justified it may be
stated that in paragraph-4 of its counter-affidavit dated February 10, 1981 Shri H.J. Ramachandran, Joint Secretary, Home Department, has
stated:
The prime object behind the grant of exemption to the buildings belonging to religious institutions is to enable the institutions to get enhanced
income by increasing their rents. The buildings were endowed to the public religious and charitable trusts for carrying out certain religious or
charitable purposes. With the escalation of prices, the religious and charitable trusts are not in a position to carry out the endowment, if the income
of the property is not increased suitably and this nullifies the specific purpose of the endowment.
In para-13 the deponent has further stated:
As stated already, numerous representations were made to the Government about the plight of the temples and the public charities like poor
feeding, etc., and the ridiculous position which is prevailing, and the Government on a consideration of all the aspects of the matter was fully
satisfied that the tenants are fully exploiting the situation and the fixation of a fair rent under the Rent Control Act is no criterion at all and that it
would cause immense injustice and would be highly oppressive so far as temples and religious endowments and public charities are concerned. It is
only in the context of such a serious predicament and critical situation that the Government intervened and issued the notification u/s 29 of the Act
to relieve the hardship and injustice.
It has also been pointed out that the procedure and machinery indicated in Section 4 of the Act and the concerned Rules for fixing fair rent only
yields, on the total cost of the building together with the market value of the site, a gross return of 9 per cent for residential buildings and 12 per
cent for non-residential buildings which is very low as compared to the bank rate of interest and grossly inadequate when compared to the
reasonable rents at the market rate obtaining in the locality or the neighbourhood (i.e., rent which a willing landlord will charge to a willing tenant)
and it was a case of the tenants of all such buildings exploiting the situation arising from the beneficial provisions of the Act. In the supplementary
counter-affidavit dated September 24, 1983, Shri N. Srinivasan, Deputy Secretary, Home Department, has categorically asserted that ""in all these
cases the Government was satisfied that the rent paid by the tenants was very low, meagre and that the provisions of fixation of fair rent under the
Act would not meet the ends of justice and the situation will still continue in which the tenant will be exploiting the situation and the helplessness of
the public religious trusts and charitable institutions"" and that, therefore, the Government felt that it was necessary to withdraw the protection given
under the Act to the tenants of such buildings.
It may be stated that no rejoinder affidavit has been filed on behalf of the writ petitioners or the appellants and as such the aforesaid material
furnished by the two counter-affidavits and the averments made therein have gone unchallenged. In our view, the aforesaid material clearly shows
that buildings belonging to such public religious and charitable endowments or trusts clearly fell into a class where undue hardship and injustice
resulting to them from the uniform application of the beneficial provisions of the Act needed to be relieved and the exemption granted will have to
be regarded as being germane to the policy and purposes of the Act. In other words, the classification made has a clear nexus with the object with
which the power to grant exemption has been conferred upon the State Government u/s 29 of the Act.
Thus the Supreme Court upheld in S. Kandaswamy Chettiar''s case, the power of exemption u/s 29 as well as the Notification issued there
under, exempting the buildings owned by Hindu, Christian and Muslim Religious Public Trusts and Public Charitable Trusts, from all the provisions
of the Act, on the basis that such exemption is intended to relieve those institutions of the undue hardship and injustice resulting to them from the
application of the beneficial provisions of the Act. Hence it is clear that the exemption granted by the Notification issued u/s 29, is actually a benefit
conferred upon the religious public trusts and public charitable trusts. Therefore the problem on hand should be analysed in the context of this
underlying truth that a Trust is a beneficiary and not an adversary of the Notification.
Keeping the purpose of grant of exemption in mind, if we look at the provisions of the Rent Control Act, it is seen that the Act speaks of two
types of exemptions, one u/s 29 and another u/s 30. The exemption u/s 29 is actually dependent upon the discretion of the Government and can
really be called a ""floating exemption"", as it can be issued, withdrawn and reissued at any point of time. But the exemption u/s 30 is a ""static or
fixed exemption"", which can be withdrawn only by way of an amendment to the Act. The distinction can be appreciated by a reading of both the
provisions and the notifications issued u/s 29:
Exemptions. - Notwithstanding anything contained in this Act, the Government may, subject to such conditions as they deem fit, by notification,
exempt any building or class of buildings from all or any of the provisions of this Act.
Exemption in the case of certain buildings � Nothing contained in this Act shall apply to -
(i) any building for a period of five years from the date on which the construction is completed and notified to the local authority concerned; or
(ii) ...(struck down by Apex court)
Explanation � For the purposes of Clause (ii), ''tenant'' shall include -
(a) a person to whom the tenant has transferred his rights under the lease with the written consent of the landlord; and
(b) a sub-tenant in any case where the building or part thereof has been sub-let with the written consent of the landlord or where the lease confers
a right to sub-let.
(iii) any lease of a building under which the object of the tenant is to run the business or industry with the fixtures, machinery, furniture or other
articles belonging to the landlord and situated in such building.
Illustration (1): Where a dhall mill as such is the subject matter of the lease and where the intention of the tenant is to run the business with the
machinery in the building in which such dhall mill is housed, the Act does not apply to such building.
Illustration (2): Where the lease is of land and building together with fixtures, fittings, cinematograph talkie equipments, machinery and other
articles, the Act does not apply to such building.
Illustration (3): Where a hotel building together with the furniture, machinery and other articles necessary for the running of hotel business is leased
and the tenant is to run the hotel business in such building, the Act does not apply to such building.
In exercise of the power conferred u/s 29, the Government issued a notification in 1974 which reads as under:
(G.O.Ms. No. 1998, Home, 12th August, 1974)
No. II (2)/HO/3811/74 � In exercise of the powers conferred by Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
(Tamil Nadu Act 18 of 1960), the Governor of Tamil Nadu hereby exempts all the buildings owned by the Hindu, Christian and Muslim religious
trusts and charitable institutions from all the provisions of the said Act.
But in super session of the above, a fresh notification was issued in 1976 which reads as follows:
(G.O.Ms. No. 2000, Home, 16th August, 1976)
No. II (2)/HO/4520/76 � In exercise of the powers conferred by Section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
(Tamil Nadu Act 18 of 1960), and in super session of the Home Department Notification No. II (2)/HO/3811/74, dated the 12th August 1974
published at page 444 of Part II � Section 2 of the Tamil Nadu Government Gazette, dated the 21st August, 1974, the Governor of Tamil Nadu
hereby exempts all the buildings owned by the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions
of the said Act.
Basically there are at least 2 distinguishing features between the exemption u/s 29 and the one u/s 30, which are as follows:
(i) The exemption u/s 29 depends entirely upon the executive fiat and it can be granted to a building or class of buildings. But the exemption u/s 30
is statutory and it applies to all buildings which satisfy the prescriptions contained therein.
(ii) The exemption u/s 29 can either be in respect of all the provisions of the Act or be in respect of only a few provisions of the Act, depending
upon the notification. But the exemption u/s 30 is in respect of all the provisions of the Act, as seen from the phrase ""nothing contained in this Act
shall apply.
Therefore both exemptions cannot be treated on identical scales.
Apart from the two types of exemptions under Sections 29 and 30, the Act also speaks of applicability, per se, of the provisions of the Act.
u/s 1 (2) (a) (i), the Act is made applicable to the City of Madras, the City of Madurai and to all Municipalities, constituted under the Tamil Nadu
District Municipalities Act, 1920. But the proviso to Section 1 (2) (a) (i) confers power upon the Government, to direct, by Notification that the
Act shall cease to apply to any Municipality or to the City of Madras or to the City of Madurai. But u/s 1 (2) (a) (ii), the Government may, by
Notification, apply the Act once again to such Municipality or City.
The applicability of the provisions of the Act, stand on a different footing than the exemptions contemplated under Sections 29 and 30. By its
very nature and meaning, the word ""exemption"" presupposes the applicability of the Act, but for the exemption. If the Act has no application at all
{by virtue of Section 1(2)}, the question of exemption, either u/s 29 or under 30, does not arise. It is only when the provisions of the Act apply,
per se, that the question of exemption would arise. Therefore the parties, landlord or tenant, have no choice, if the provisions of the Act, per se, do
not apply to the area where the building is located.
On the contrary, the exemptions contemplated under Sections 29 and 30, are meant only for buildings to which the provisions of the Act
would otherwise apply, but for those Sections. The purpose of grant of exemption, as seen from the decision in P.J. Irani''s case and S.
Kandaswamy''s case is to confer a benefit. There are ever so many statutes, providing for exemption, say for example, Section 11 of The Income
Tax Act, under which, the income from property held for charitable or religious purposes is not to be included in the total income. But to avail the
benefit of the said exemption, an Institution has to comply with the conditions prescribed u/s 12-A. Even an individual, who seeks exemption of the
amount paid by way of donations to certain funds, charitable institutions etc., u/s 80-G of The Income Tax Act, has to fulfil certain requirements.
In short, an exemption which is conferred by way of a benefit or privilege, has to be claimed by the person entitled to it. If the exemption is not
conferred by way of benefit or privilege, but by way of statutory exclusion, the question of claiming the same may not arise. Consequently, one has
to see if the exemption in question is in the nature of a benefit or privilege or in the nature of an exclusion. If it is in the nature of exclusion, it does
not depend upon one''s likes or dislikes. If it is in the nature of a privilege or benefit, one may avail it or leave it, as in the case of an exemption u/s
80-G of the Income Tax Act.
A benefit or privilege conferred upon a person, can always be waived, unless the statute imposes a bar from contracting out. Some of the
Labour Welfare Legislations like the Workmen''s Compensation Act, though confer a benefit, also impose a bar upon persons contracting out of
the statute. Therefore a workman cannot waive the benefit conferred by the statute. Looking at the same issue from the point of view of the Rent
Control Act, the Supreme Court held in Shri Lachoo Mal Vs. Shri Radhey Shyam, , as follows:
The essential question that has to be resolved is whether Section 1-A was merely in the nature of an exemption in favour of the landlords with
regard to the buildings constructed after January 1, 1951 and conferred a benefit on them which they could give up or waive by agreement or
contractual arrangement and whether the consideration or object of such an agreement would not be lawful within the meaning of Section 23 of the
Indian Contract Act.
The general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and
protection of the individual in his private capacity which may be dispensed with without infringing any public right or public policy. Thus the maxim
which sanctions the non-observance of the statutory provision is cuilibet licet renuntiare juri pro se introducto. (See Maxwell on Interpretation of
Statutes, Eleventh Edition, pages 375 and 376). If there is any express prohibition against contracting out a statute in it then no question can arise
of any one entering into a contract which is so prohibited but where there is no such prohibition it will have to be seen whether an Act is intended
to have a more extensive operation as a matter of public policy.
Now Section 1-A does not employ language containing a prohibition against or impose any restriction on a landlord and a tenant entering into an
agreement that they would not be governed by that Section. We concur with the view expressed in Neminath Appayya v. Jamboorao Satappa
AIR 1966 Mys 154, that the words ""if permitted it would defeat the provisions of any law"" in Section 23 of the Contract Act refer to performance
of an agreement which necessarily entails the transgression of the provisions of any law. What makes an agreement, which is otherwise legal, void
is that its performance is impossible except by disobedience of law. Clearly no question of illegality can arise unless the performance of the unlawful
act was necessarily the effect of an agreement. The following observations of Lord Wright in Vita Food Products Incorporated v. Unus Shipping
Co. Ltd (in Liquidation) (1939) AC 277 are noteworthy in this connection:
Nor must it be forgotten that the rule by which contracts not expressly forbidden by statute or declared to be void are in proper cases nullified for
disobedience to a statute is a rule of public policy only, and public policy understood in a wider sense may at times be better served by refusing to
nullify a bargain save on serious and sufficient grounds.
We are unable to hold that the performance of the agreement which was entered into between the parties in the present case would involve an
illegal or unlawful act. In our judgment Section 1-A was meant for the benefit of owners of buildings which were under erection or were
constructed after January 1, 1951. If a particular owner did not wish to avail of the benefit of that section there was no bar created by it in the way
of his waiving or giving up or abandoning the advantage or the benefit contemplated by the section. No question of policy, much less public policy,
was involved and such a benefit or advantage could always be waived. That is what was done in the present case and we are unable to agree with
the High Court that the consideration or object of the agreement entered into between the parties in June 1962 was unlawful in view of Section 23
of the Contract Act.
Thus the Supreme court held that it was open to the landlord to waive the benefit conferred by the Act, as it was beneficial to him and was not
opposed to public policy. Interestingly, the Supreme Court was dealing with Section 1-A of the U.P. Rent Act in the above case, which is similar
to Section 30 (i) of Tamil Nadu Act. Thus even the benefit u/s 30 was held to be capable of being waived, in that case.
In the case on hand, the respondent/landlord was entitled to the benefit of the exemption under G.O.Ms. No. 2000, Home Department, dated
16.8.1976, issued u/s 29 of the Act, provided the respondent was an institution of public charitable nature. It is true that the objects of the
respondent, such as protection of animals and promotion of vegetarianism may be of public charitable nature, in view of the decisions relied upon
by Mr. T.V. Ramanujun, learned Senior Counsel for the petitioner. However no evidence was let in, on both sides, to show (i) that any property
or fund was dedicated for public charitable purposes (ii) that the respondent was registered in terms of Section 12-A and was also availing the
exemption under the Income Tax Act and (iii) that any obligation in the nature of a trust had been created. Therefore to hold that the respondent
was entitled to exemption from the provisions of the Rent Control Act, would tantamount to thrusting a benefit or privilege upon them, despite their
unwillingness to avail such a benefit. Interestingly, if the respondent had gone to the Civil Court, on the basis that their building was exempt, a
burden would have been cast heavily upon them to show that it was entitled to the benefits of the Government Order granting exemption. If the
respondent had failed to discharge such a burden, the Civil Court would have been obliged to non suit them. Therefore in such circumstances, it
cannot be held that the respondent should avail the exemption, irrespective of whether they want it or not and whether they fulfill all pre conditions
for the benefit of exemption or not. Hence, following the aforesaid decision of the Supreme court in Lachoo Mal''s case, I hold that the respondent
in this case should be deemed to have waived the benefit of exemption and that consequently, the petition was maintainable. At any rate, there is
not sufficient material on record to hold that the respondent was entitled to exemption.
Coming to the merits of the case, it is seen from the pleadings that the building let out to the petitioner comprises of the entire ground floor and
first floor in the premises at Door No. 43, Narayana Mudali Street, Sowcarpet, Chennai-79. The extent of the site over which the building is
constructed, was stated in the report of the Engineer examined on the side of the respondent-landlord, as 1790.25 sq. ft. This is seen from Ex.P-2
Engineer''s report. In Ex.R-7, the report of the Engineer examined on the side of the petitioner-tenant, the land area was mentioned only as 1645
sq. ft. The Rent Controller took the land area only as 1600 sq. ft., on the basis of the Sale Deed marked as Ex.P-1. The Appellate Authority also
took 1600 sq. ft., as the extent of site. This appears to be wrong, in view of the fact that the Sale Deed Ex.P-1 is of the year 1942. When the
Engineers on both sides measured the property in the years 2003 and 2004, they have actually measured the land and concluded that it was 1790
sq. ft., and 1645 sq. ft., respectively. Therefore, at least, the Rent Controller could have taken 1645 sq. ft., as the extent of site. But the
respondent-landlord has not challenged the finding of both the Courts below with regard to the extent of site. Therefore, the same is taken to be
1600 sq. ft.
In so far as the built-up area is concerned, the Engineer''s Report filed by the landlord as Ex.P-2, shows that the built-up area in the ground
floor (after deducting the portion open to sky) was taken as 1522.95 sq. ft., and the built-up area in the first floor was taken as 1265.135 sq. ft.
The Engineer of the landlord adopted a rate of Rs. 370/- per sq. ft., for the construction in the ground floor and Rs. 344/- per sq. ft., for the
construction in the first floor.
The Engineer examined on the side of the petitioner-tenant, took the built-up area in the ground floor as 1513.5 sq. ft., and adopted a rate of
Rs. 349/- per sq. ft. He took the built-up area in the first floor to be 1250 sq. ft., with Madras terrace and 192 sq. ft., with asbestos sheet roofing
and adopted a rate of Rs. 314/- per sq. ft., for the Madras terraced portion and Rs. 217/- per sq. ft., for the other portion.
The Rent Controller accepted the extent of built-up area as well as the rate of construction, as spelt out by the Engineer of the petitioner-
tenant. The Appellate Authority also accepted the same except a very minor variation of about 6.5 sq. ft., in the built-up area in the ground floor.
Therefore, the petitioner-tenant cannot have any grievance with regard to the built-up area as well as the rate of construction adopted by both the
Courts below, since the Courts have gone only by the Report of the Engineer, filed by the petitioner-tenant as Ex.R-7.
Though the Engineer of the petitioner-tenant allowed only 10% for basic amenities, on the total cost of construction, the Courts below adopted
15%, for the reason that there were sparteck tiles and electric motor available, even according to the petitioner''s Engineer. Therefore the adoption
of 15% by both Courts, cannot be found fault with.
Thus in effect, the petitioner-tenant cannot assail the measurement of the built-up area and the rate of construction applied by the Courts
below, since both the Courts went only by the Report of the Engineer of the petitioner-tenant. The application of 15% for basic amenities, cannot
also be said to be wrong, for the reasons stated in the preceding paragraph.
In so far as depreciation is concerned, the Engineer of the landlord took the age of the building as 60 years, the Engineer of the tenant took the
age of the building as 120 years, the Rent Controller took the age as 90 years and the Appellate Authority took the age as 70 years. In the
absence of any scientific evidence on both sides, the Courts were left with no alternative except to indulge in some kind of speculation. While the
Rent Controller opted to take an average of the extreme position taken by both parties in this regard (60 years and 120 years respectively), the
Appellate Authority accepted the evidence of the Engineer of the respondent-landlord and fixed the age as 70 years, after allowing a small
leverage. Therefore this cannot also be found fault with.
Coming now to the question of the value of the land, which is the most contentious issue, it is seen that the landlord''s Engineer took the value
of the land as Rs. 94,38,000/- per ground on the basis of a Sale Deed filed as Ex.P-3. That Sale Deed was in respect of 78 sq. ft., of undivided
share in a larger extent of property in the very same street viz., Narayana Mudali Street, Sowcarpet, Chennai-79, in which the petition-building is
situate. The Sale Deed was dated 25.2.2001, executed just two years prior to the initiation of the present proceedings. The sale was made for a
value of Rs. 2,53,500/-. Therefore the landlord''s Engineer took the market value of the site as approximately around Rs. 3,200/- per sq. ft., in the
year 2001 and arrived at the rate of Rs. 94,38,000/- per ground, after increasing the value in 2001 by 10% in 2002 and another 10% in 2003.
The tenant''s Engineer took the value of the site at Rs. 10,95,435/- per ground, on the basis of a Sale Deed filed as Ex.R-9, in which the land
of the extent of 964 sq. ft., was sold for Rs. 4,00,000/-, thereby indicating that the market value per ground was Rs. 9,85,850/- on the date of the
Sale Deed and after allowing appreciation at 10%, the market value per ground would be Rs. 10,95,435/-. Though the Rent Controller fixed the
market value of the land at Rs. 50,00,000/- per ground without any scientific basis, the Appellate Authority rejected Ex.R-9 on a rational basis.
The Appellate Authority found that though Ex.R-9 Sale Deed was dated 10.2.2003, it came into existence after a checkered history. The parties
to Ex.R-9 had an agreement of sale dated 17.2.1978, which became the subject matter of a suit for specific performance. Ultimately after the
decree in the suit attained finality, Sale Deed was executed in the year 2003, on the basis of the very same sale price fixed in the year 1978 under
the agreement of sale. In other words, the value of the land indicated in Ex.R-9 in the year 2003, was the same as fixed in the year 1978 between
the parties in the agreement of sale. Therefore, the Appellate Authority rightly rejected Ex.R-9 and accepted the market value of land to be Rs.
70,00,000/- per ground. As a matter of fact, the market value of land works out to Rs. 78,00,000/- per ground, even in the year 2001, as per
Ex.P-3. The present proceedings were initiated in 2003. But the Appellate Authority did not give any allowance for appreciation in the years 2002
and 2003. The Appellate Authority also did not take the entire value as reflected in Ex.P-3, for the reason that it was in respect of a small extent of
about 78 sq. ft., and that too only an undivided share. Therefore, the Appellate Authority adopted Rs. 70,00,000/- per ground as the market value
of land, in the year 2003, for the property in Sowcarpet, which actually adjoints the prime non-residential locality in Chennai, viz., Chennai-1.
Hence I am unable to find fault with the Appellate Authority in fixing the value of land at the said rate.
Thus, I find no material irregularity or illegality in the order of the Appellate Authority, either in the matter of arriving at the cost of construction
or in the matter of fixation of the market value of land. Consequently, I find no justification to interfere with the order of the Appellate Authority
even on merits.
In view of the above, these Civil Revision Petitions are dismissed. No costs. Consequently connected miscellaneous petition is also dismissed.