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Judgment
Somasundaram, J.—The respondent in R.C.O.P. No. 1245 of 1982 on the file of the Rent Controller (XI Judge, Court of Small Causes),
Madras, is the petitioner in these C.R.Ps. The first petitioner and the legal representative of the second petitioner in the said R.C.O.P. are the
respondents in these C.R.Ps. For the sake of convenience, the parties are referred to in this order as per their nomenclature in R.C.O.P. No. 1245
of 1982.
The petitioners filed R.CO.P.No.1245 of 1982 against the respondents u/s 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of
1960 as amended by (Act 23 of 1973), (hereinafter called the Act) for fixation of fair rent for the petition mentioned building. The case of the
petitioners is that they are the owners of the premises bearing D.No.2, General Patters Road, Madras 2 and the respondent is the tenant on a
monthly rent of Rs. 631. Their further case is that taking into consideration the cost of construction of the petition mentioned building, the age of the
building, the amenities provided for and the land value in the locality etc. the fair rent for the petition mentioned building has to be fixed at Rs.
19,585 per month. The respondent filed a counter admitting that the respondent is a tenant of the petition mentioned building and is carrying on
business there. However, the respondent contended that the building is 50 years old, that the roofing is only Mangalore tiled roofing, that teak-
wood is not used and that the wood used in the building in joists, rafters, doors and windows are only country wood. The respondent further
contended that the present monthly rent of Rs. 631 is the fair rent and reasonable rent for the petition mentioned building.
Before the Rent Controller, P.W.1 was examined on behalf of the petitioners, R. W. 1 was examined on behalf of the respondent and the
commissioner appointed by the Court was examined as C.W.1. The Rent Controller, on a consideration of the entire evidence on record both oral
and documentary fixed the fair rent for the petition mentioned building at Rs. 12,128 per month and ordered that the petitioners are entitled to fair
rent fixed at Rs. 12,128 per month from the date of petition. Aggrieved by the order of the Rent Controller fixing the fair rent at Rs. 12,128, the
respondent filed an appeal R.C.ANo.1617 of 1983 and the petitioners filed R.C.A.No.252 of 1984 before the Appellate Authority (4th Judge,
Court of Small Causes, Madras). The Appellate Authority by a common Judgment confirmed the order of the Rent Controller and dismissed both
the appeals. As against the common judgment of the Appellate Authority in R.C.A. No. 1617 of 1983 and R.C.A. No. 252 of 1984, the
respondent has filed the present C.R.Ps.
Mr. Rangarajan, the learned Senior Counsel appearing for the respondent, in the first place contended that the petition for fixation of fair rent
was filed by the petitioner which is an unregistered partnership firm M/s. Gupta & Co., and such a petition for fixation of fair rent filed by the
unregistered partnership firm is not maintainable in view of Section 69(2) of the Partnership Act. The learned Counsel further contended that
whether the petition for fixation of lair rent is filed by all partners collectively or it is filed in the name of the firm by one or more partners, the
following two conditions prescribed by Section 69(2) of the Partnership Act must be fulfilled;
(1) the firm must be registered and
(2) That the persons suing must have been shown in the register of Firm as partners of the firm;
the above conditions prescribed u/s 69(2) of the Partnership Act are not satisfied in the present case, and therefore, the petition for fixation of fair
rent filed u/s 4 of the Act by the partners of an unregistered firm is not maintainable. In support of his contention, the learned Counsel relied on the
decision reported in Swayamprakasam alias Chidambaranathan Vs. R. Vijayarangam, ; Balasore Textile Distributors Association Vs. Indian Union
(B.N. Rly.) and Another, ; Ram Adhar Vs. Rama Kirat Tiwari, and Wardman Finance Corporation v. Ghulam Ahmad Lone AIR 1982 (J.&
K).142 I am unable to accept the above contention of the learned Counsel for the respondent for the following two reasons: (a) This plea that the
fixation of rent petition filed by the partners of the unregistered firm is not maintainable in view of Section 69(2) of the Partnership Act was not
raised in the counter filed by the respondent in R.C.O.P.No.1245 of 1982. Admittedly, such a contention was raised for the first time only before
the appellate authority. The maintainability of the petition for fixation of rent is a plea that will have to be taken by the respondent at the earliest
stage in the R.C.O.P. itself and when such a plea has not been taken in the counter filed in the R.C.O.P. itself, it will not be open to the respondent
to raise the plea either in the appeal filed before the appellate authority or in the revision before this Court. In Jalal Mohammed Ibrahim (died) v.
Kokka Mohammed Ghouse 84 L.W. 654, a Division Bench of this Court has held as follows :
These authorities clearly establish that the evidence of non-registration of the firm is a plea that will have to be raised in the suit itself, and if it had
not been raised, it could not be permitted to be raised for the first time in the second appeal. Such a plea could not be permitted to be raised in a
separate suit is, in our opinion, a fortiorari case. In this connection we may also refer to the decision of this Court in Govardandas v. Abdul
Rahiman wherein it was held: ""There is distinct provision in the Limitation Act that a court is bound to dismiss a suit on the ground of limitation, if it
finds the suit to to be barred, whether a plea of this kind had been raised on behalf of the defendants or not. No such provision however exists, in
the Partnership Act and therefore the court is not bound to dismiss the suit on the ground of nonregistration of the firm suo mom, if no plea had
been raised by any of the defendants to the suit.
Learned Counsel for the appellant drew our attention to Order 7, Rule 11(d), C.P.C., which slates that the plaint shall be rejected where the suit
appears from the statement in the plaint to be barred by any law and contended that Section 69 of the Partnership Act being a provision barring a
suit by an unregistered firm, the court could dismiss a suit suomotu and that therefore the decision in Govardandas v. Abdul Rahiman, requires
reconsideration. But, we consider that it is not necessary to go into the aspect, because we are of the view that the maintainability of a suit is a plea
that will have to be taken by a defendant in the suit, and, if such a plea had not been taken, it will not be open to him to raise the plea on any
ground in a separate suit."" In N.A. Munavar Hussain Sahib and Another Vs. E.R. Narayanan and Others, , another division Bench of this Court
following the principles laid down in Jalal Mohammed Ibrahim (died) v. Kokka Mohammed Ghouse Sahib 84 L. W. 654 held that the plea based
on Section 69(2) of the Partnership Act not raised in the written statement, cannot be allowed to be raised at a later stage. Therefore, as rightly
pointed out by the appellate authority without pleadings as to the maintainability of the petition for fixation of fair rent in view of Section 69(2) of
the Partnership Act, the contention of the respondent as to the maintainability of the petition for fixation of fair rent at a later stage before the
appellate authority and before this Court in revision is not sustainable, (b) The facts of the present case go to show that the petition for fixation of
fair rent is not filed in the firm name, but it is filed by the individual partners Dr. Gupta and Mrs. Kasthuri Gupta describing themselves as partners
of M/s. Gupta & Co. It is admitted before me that the said firm is not a registered firm. A firm is merely a compendious name for the partners who
constituted it. As pointed out by this Court in T.N.K. Govindaraju Chetty by T.N.V. Nanjappa Chetty, Partner-landlord Vs. P. Urajlal Dulabdass
and Co. and Another, the firm not being a legal entity, in substance, the partners of the firm will be the landlords. This Court further observed in the
above decision that when a firm purchases property, the purchase is really by its partners and it follows therefore, that when a firm lets out a
residential building belonging to it, in effect, its partners become the landlords. Again, the Act is a self-contained Code in 1ts field. Section 40 of
the Act deals with the fixation of fair rent and Section 4 says that any application for fixation of fair rent can be filed before the Rent Controller
either by the landlord or by the tenant. The landlord is defined u/s 2(6) of the Act as follows :
Landlord"" includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account or on behalf of another or
on behalf of himself and others or as an agent, trustee, executor, administrator, agent, trustee, executor, administrator, receiver or guardian or who
would so receive the rent or be entitled to receive the rent, if the building were let to a tenant.
Thus, it will be seen that the definition of landlord given u/s 2(6) of the Act is inclusive definition. The inclusive definition in Section 2(6) of the Act
adds to the normal concept of landlord, certain other categories of persons such as the person who is receiving or is entitled to receive the rent of a
building whether on his own account or on behalf of another or on behalf of himself and others as an agent etc. A person who is actually receiving
or who is entitled to receive the rent of a building will be a landlord within the meaning of Section 2(6) of the Act and such a person can maintain a
petition for fixation of fair rent against the tenant. In the present case, the petition for fixation of fair rent is not filed in the firm name but in the name
of individual partners. As already pointed out, the firm is merely a compendious name for partners who constituted it and when the firm purchased
the petition-mentioned property, the purchase is really by the partners and after the purchase of the petition-mentioned property, the partners
become the landlords within the meaning of Section 2(6) of the Act as they are entitled to receive the rent for the petition-mentioned property as an
agent of the firm from the tenant. It is needless to point out that every partner of a firm is an agent of the firm and as an agent of the firm, the
partners are entitled to receive the rent for the petition-mentioned property from the tenant. In these circumstances, in view of the inclusive
definition of landlord contained in Section 2(6) of the Act and inasmuch as the petitioners as partners of the unregistered firm are entitled to receive
the rent due for the petition-mentioned property and actually received the same, there is no difficulty in holding that the petitioners are landlords
within the meaning of Section 2(6) and the petition for fixation of fair rent filed by them is maintainable. There is no merit in the contention of the
learned Counsel for the respondent that the petition for fixation of fair rent filed by the partners of the unregistered firm is not maintainable in view
of Section 69(2) of the Partnership Act. The principles laid down in the decisions relied on by the learned Counsel for the respondent have no
application to the facts of the present case.
The second contention of the learned Counsel for the respondent is that the petition mentioned premises consist of both free hold land measuring
5,627 sq.ft. and lease hold lands measuring 5,141 sq.ft.; the petitioners cannot claim the benefits of Tamil Nadu City Tenants Protection Act in
respect of the lease hold land and therefore, the petitioners cannot ask for anything to be taken into account in respect of the lease hold land, for
purpose of fixation of fair rent for the petition mentioned property. The above contention of the learned Counsel for the respondent cannot be
countenanced for the following reasons:
The above contention was not raised by the respondent either before the Rent Controller or before the Appellate Authority or even in the
grounds of C.R.P., and it is raised for the first time only during the arguments before me the respondent cannot be permitted to raise such a plea
for the first time before this Court in the C.R.P.
(B) The respondent in para 3 of the counter affidavit filed in R.C.O.P.No.1245 of 1982 admitted that it is a tenant of the petition mentioned
building and the monthly rent payable is Rs. 631.
As already pointed out, the inclusive definition of landlord contained in Section 2(6) of the Act includes a person who is actually receiving rent or
who is entitled to receive rent in respect of the building. In view of the above definition of landlord, contained in Section 2(6) of the Act and
inasmuch as the petitioners are entitled to receive the rent and are actually receiving the rent due for the petition mentioned building from the
respondent, it cannot be contended that the petitioners are not the landlords.
A careful reading of Section 4 of the Act shows that the fair rent is fixed for the building and it is payable by the tenant for the building occupied
by him. In other words, what is fixed u/s 4 of the Act is the fair rent for the building let out by a landlord to a tenant. Vide : Rovel & Co. v.
Ramachandran (1977) 1 S.C.C. 424. It is not the case of the respondent that it is not liable to pay rent for the petition-mentioned buildings.
Admittedly, the respondent is a tenant in respect of the petition-mentioned buildings and it is liable to pay rent for the petition-mentioned building.
When it is admitted that the respondent is liable to pay rent to the petitioners for the petition-mentioned buildings and when the respondent is
actually paying the monthly rent to the petitioners, the respondent is equally liable to pay the fair rent in respect of the petition-mentioned building to
the petitioners. Further in any by the sale deed Ex.P-8, the petitioners have purchased the right, title and interest of their vendors namely Dinrose
Estate in the petition-mentioned premises. In these circumstances, there is no merit in the contention of the learned Counsel for the respondent that
the petitioners cannot ask for fixation of fair rent for the entire petition mentioned premises including the leasehold land.
The next question we have to examine is whether the fair rent fixed by the Rent Controller and the Appellate Authority for the petition mentioned
buildings at Rs. 12,128 per month is correct.
Admittedly, the tenancy is for non-residential purpose and according to Section 4(3) of the Act, the fair rent for non-residential buildings shall be
12% of the gross return p.a. on the total cost of such building. Section 4(4) says that the total cost referred in Section 4(3) of the Act shall consist
of the market value of the site in which the building is constructed, the cost of construction of the building and the cost of provision of any one or
more of the amenities specified in Schedule-1 of the Act. Therefore, in the first instance, we have to determine the cost of construction of the
building. To find out the cost of construction of the building in question, we have to find out the class and type of the building, the age of the
building, plinth area, market value of the site on which the building is constructed, the amenities etc. P.W.1 in his evidence speaks about the nature
of the petition mentioned building. The evidence of P.W.1 and his report Exs.P-6 would go to show that part of the building is constructed with
brick and lime mortar and the remaining portion with brick and cement mortar. P.W.1 has further stated in his evidence that the petition mentioned
building comes under the category of type-I Class A construction, except for the country tiled roofing portion which comes under the category of
type-II. C.W.1 in his evidence has stated that the building is built with brick work partly in lime and partly in mud and it is plastered with lime
mortar. C.W.1 has further stated in his evidence that the petition mentioned building comes under the category of Type-1 B building. The sale deed
in favour of the petitioners is marked as. Ex.P-8 in this case, and it is seen from annexure I.A attached to Ex.P-8 that the petition mentioned
building is a building with brick masonry walls and that country wood has been used. Inasmuch as the sale deed in favour of the petitioners Ex.P-8
is dated 22.1.1979, the particular furnished in Annexure I.A to Ex.P-8 have to be taken as correct. On the basis of the particulars given in
Annexure I A to Ex.P-8, it has to be held that the building has been built with brick and lime mortar and that country wood had been used. In these
circumstances, the Rent Controller and the Appellate Authority rightly held that the petition mentioned building has to be classified as class-A-I
according to P.W.D. specification. With regard to the age of the building, P.W.1 has deposed that the country tiled portion of the petition
mentioned building is 60 years old and the remaining portion of the building is 40 years old. On the other hand, C.W.I in his evidence has stated
that the entire building is 80 years old. In the annexure I-A attached to Ex.P-8, the age of the building is given as over 60 years. Placing reliance on
Ex.P-8, the Rent Controller and the appellate Authority have rightly fixed the age of the building as 60 years. Coming to the plinth area of the
building P.W.1 in his evidence has stated that the total plinth area of the building would be 8,026 sq.ft. On the other hand, C.W. 1 in his evidence
has stated that the total plinth area is 7,366 sq.ft. In annexure I-A of Ex.P-8, the total plinth area is given as 7,355 sq.ft. On the basis of the
evidence of C.W.1 and the recitals in Ex.P-8 the Rent Controller and the Appellate Authority rightly fixed the plinth area of the petition mentioned
building as 7,366 sq.ft. Then we have to find out the market value of the site on which the petition mentioned building is constructed. The evidence
on record discloses that the lease hold land measuring 4,874 sq.ft. is in the front portion and the free hold land measuring 4,199 sq.ft. is in the rear
portion of the petition mentioned premises. P.W.1 on the basis of Ex.P-2 and P-4 has fixed the market value of the land for the lease hold land at
Rs. 2 lakhs per ground and the market value of the free hold land at Rs. 1,50,000 per ground. C.W.1 in his report has fixed the land value of the
lease hold land at Rs. 1,50,000 per ground and the market value of free hold land at Rs. 2,25,000 per ground. The evidence in this case discloses
that the petition mentioned building is situated next to the Wellington theatre in General Patters Road very near to the Mount Road, in an important
place and it has all the locational amenities. Taking into consideration the evidence on record, the Rent Controller and the Appellate Authority
correctly fixed the market value of the hold lease land at Rs. 2 lakhs per ground and for the free hold land at Rs. 3,50,000 per ground.
Coming to the amenities, P.W.1 in his evidence has stated that the petition mentioned building has all the basic amenities, Whereas R.W.1 in his
evidence has stated that the petition mentioned building has only the basic amenity of electricity. Admittedly, the petition mentioned building has the
amenity of excess open land after deducting the 50% of the open land after deducting the 50% of the open land appurtenant to the petition
mentioned building, and such excess open land has to be treated as amenity by virtue of proviso to Section 4(4) of the Act. Taking note of the
above amenities the Rent Controller and the Appellate Authority have correctly allowed the 10% of the cost of construction towards the basic
amenities and 5% of the cost of building towards Schedule-I amenities. On the basis of the above findings with regard to the cost of construction of
the building, the value of the site and the amenities the Rent Controller in para 11 of the order has given the following calculations for fixing the fair
rent for the petition mentioned building at Rs. 12,128 per month.
Costs of construction of plinth
Mangalore tiled roof at Rs. 29
per sq.ft. for 3751 sq.ft. Rs. 1,08,779-00
Costs of Construction for Mangalore
tiled over flat tiles at Rs. 21 per sq.ft. Rs. 26,677-00
for 721 sq.ft. Cost of construction for
AC sheet roof at Rs. 34 per sq.ft. for
134 sq.ft. Rs. 4,556-00
________________
Total cost of construction of the building Rs. 1,40,012-00
Costs of construction for free hold
land at Rs. 37 per sq.ft. for 853 sq.ft. Rs. 31,561-00
at Rs. 29.per sq.ft. for 1907 sq.ft. Rs. 55,303-00
________________
Total costs of construction of the Building Rs. 2,26,876-00
Add 10% towards basic amenities Rs. 22,688-00
________________
Rs. 2,49,564-00
Costs of depreciation (P.45284) Rs. 1,13,013-00
________________
Depreciated costs Rs. 1,36,551-00
Costs of land for lease-hold land at Rs. 2,00,000
per ground for 4,874 sq.ft. Rs. 4,06,167-00
Costs of land for free hold land at Rs. 3,50,000
per ground for 4,199 sq.ft. Rs. 6,12,354-00
_______________
Costs of the building Rs. 11,55,672-00
Add 5% towards Schedule I amenities Rs. 55,754-00
________________
GROSS RETURN Rs. 12,12,826-00
________________
12% on the gross return per month 12,12,826 x 12
100 x 12
Rs. 12,128-26
or
Rs. 12,128.
The fair rent is Rs. 12,128 per month."" The above calculation on the basis of the findings of the Rent Controller and the Appellant Authority with
regard to the cost of construction of the building, value of the site and the provisions amenities as correct, the calculations given by the Rent
Controller in para 11 of his order and confirmed by the Appellate Authority for arriving at the fair rent at Rs. 12,128 per month are also correct
and they do not call for any interference in these C.R.Ps. The fair rent is fixed by the Rent Controller and the Appellate Authority for the petition
mentioned building Rs. 12,128 per month on the basis of evidence on record and there is no infirmity in the order of the Rent Controller and the
judgment of the Appellate Authority. There is no merit in these C.R.Ps. and they are liable to be dismissed. Accordingly the C.R.Ps. are dismissed.
No costs.