1956 (11) TMI 29 - SC - Service Tax

Whether that the Act does not apply to the premises in question in view of the specify incidents of the tenancy as disclosed in the terms of the lease in the standard form between the appellant and Miss M. Augustin and as found by the courts of fact below? Whether the Court were to come to the conclusion that the premises in question were within the ambit of the Act clause (g) of s. 9 should be applied to the tenancies in question as determined by the appellate authority aforesaid? Held that - If as already indicated the term it rent is comprehensive enough to include all payment;. agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenances but also of furnishings electric installations and other amenities agreed between the parties to be provided by and at the cost of the land-lord the conclusion is irresistible that all that is included in the term rent is within the purview of the Act and the Rent Controller and other authorities had the power to control the same. In view of these considerations we overrule the first- contention raised on behalf of the appellant. . The Rent Controller gave the landlord credit only for the amount by which the municipal taxes had been increased and no more by applying the provisions of cl. (b) of s. 9. The Appellate Authority on the other hand applied the provisions of el. (g) of s. 9 by determining the fair and reasonable rent after taking into consideration the fact that electric charges as also Government duty on the consumption of electric power had been increased. So had the cost of providing for the other amenities and services. In view of our conclusion that the residuary el. (g) applies to the terms of the tenancy in these cases it follows that the decision of the Appellate Authority was more in consonance with the provisions of cl. (g) than that of the Rent Controller or of the High Court. As the figures arrived at by the Appellate Authority have not been challenged before us we would direct that the orders passed by it should be restored and those of the High Court and of the Rent Controller set aside. Appeal allowed in part.

Summary

Issues Involved:
1. Applicability of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 to the premises in question.
2. Determination of the standard rent under Section 9 of the Act.

Issue-Wise Detailed Analysis:

1. Applicability of the Act to the Premises in Question:

The primary issue was whether the provisions of Section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, applied to the premises in question. The appellant, a common landlord, contended that the premises, which included various amenities and services, were outside the scope of the Act. The landlord argued that the special facilities provided, such as electrical energy for various uses, repairs of electric installations, and other services, indicated that the premises should not be governed by the Act.

The Court examined the definition of "premises" under Section 2(8) of the Act, which includes any building or part of a building let separately, along with any furniture or fittings supplied by the landlord. The Court found that this definition was comprehensive enough to include the tenements in question, despite the additional amenities provided. The Court referred to English case law, such as Property Holding Co. Ltd. v. Clark and Alliance Property Co. Ltd. v. Shaffer, which supported the view that "rent" includes payments for additional amenities and services.

The Court concluded that the Act was intended to have a wide application and that the supply of additional amenities did not exclude the premises from the Act's purview. Therefore, the provisions of the Act applied to the premises in question.

2. Determination of Standard Rent under Section 9 of the Act:

The second issue was the determination of the standard rent under Section 9 of the Act. The Rent Controller initially fixed the standard rent based on the rules laid down in Schedule A of the Act. The landlord appealed, and the Appellate Authority set the standard rent at a higher figure, considering the increased charges for electricity and government duty. The High Court, however, reverted to the Rent Controller's decision, holding that Clause (g) of Section 9 was not applicable.

The Court analyzed the definition of "standard rent" under Section 2(10) of the Act, which includes rent determined in accordance with Schedule A or fixed under Section 9. The Court noted that none of the specific clauses (a) to (f) of Section 9 fully addressed the circumstances of the case, particularly the increased costs of electricity and other services. Therefore, the Court found that the residuary Clause (g) of Section 9, which allows for the determination of a fair and reasonable rent, was applicable.

The Court held that the Appellate Authority's decision to apply Clause (g) and consider the increased charges for electricity and other services was more consistent with the provisions of the Act. Consequently, the Court restored the orders passed by the Appellate Authority, setting aside the decisions of the High Court and the Rent Controller.

Conclusion:

The appeal was allowed in part, with the Court directing that the orders of the Appellate Authority be restored. The appellant was required to pay the costs of the respondents, as per the directions at the time of granting special leave.