TMI Blog1973 (12) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... t the tenants were to pay a 25 per cent increase in rent and also certain other amounts. The present landlords purchased the property in 1962 and soon after filed an application under Section 4 of the Madras (now Tamil Nadu) Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent. Thereupon the tenants filed writ Petition No. 1124 of 1963 seeking to restrain the landlords from proceeding with that petition. The learned Single Judge who heard the petition felt that in view of a long series of decisions of Madras High Court under the various Rent Control Acts in force in Madras that they applied also to contractual tenancies in the matter of payment of rent as well as eviction, the matter should be considered by a Full Bench in view of the decisions of this Court in Rent Control cases from certain other States. 2. The Full Bench after an elaborate consideration came to the conclusion that the Act controls both contractual as well as statutory tenancies, that it is a complete Code, and enables both landlords and tenants to seek the benefit of fixation of fair rent, whether a contractual tenancy prevails or it has been determined. Thereafter the matter again came up b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 5 provides that when the fair rent of a building has been fixed no further increase shall be permissible except in cases where some addition, improvement or alteration has been carried out at the landlord's expense and at the tenant's request. Similarly, if there is a decrease or diminution in the accommodation or amenities provided, the tenant may claim a reduction in the fair rent. 8. Section 6 provides for payment of additional sums in cases where the taxes and cesses payable to local authorities are increased. 9. Section 7 prohibits the landlord from claiming or receiving or stipulating for the payment of any premium or anything in excess of fair rent. It also provides that where a fair rent has not been fixed the landlord shall not claim anything in excess of the agreed rent. 10. Section 10 deals with the eviction of tenants and lays down the conditions under which an eviction could be asked for. One of those conditions mentioned in Sub-section (3) is when the Landlord requires a residential building for his own occupation or a non-residential building for the purpose of his business. Clause (d) of Sub-section (3) provides that where the tenancy is for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not really necessary for deciding those cases. We may also point out that in Rai Brij Raj Krishna v. S.K. Shaw Bros. [1951]2SCR145 dealing with the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 and interpreting section II of that Act this Court observed as follows : Section 11 begins with the words 'Notwithstanding anything contained in any agreement or law to the contrary', and hence any attempt to import the provisions relating to the law of transfer of property for the interpretation of the section would seem to be out of place. Section 11 is a self-contained section, and it is wholly unnecessary to go outside the Act for determining whether a tenant is liable to be evicted or not, and under what conditions he can be evicted. It clearly provides that a tenant is not liable to be evicted except on certain conditions, and one of the conditions laid down for the eviction of a month to month tenant is non-payment of rent. Similarly in Shri Hem Chand v. Shrimati Sham Devi ILR 1955 Punj. 36 which dealt with the Delhi and Ajmer Merwara Rent Control Act, Section 13(i) of which provided that no decree or order for the recovery of possession of any premises sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as later replaced by the Madras Buildings (Lease and Rent Control) Act, 1949, which again had a similar provision. But the important thing to note about the fixation of a fair rent under both these Acts is that the fair rent was related to the rents prevailing in April 1940 and only a fixed percentage of increase from 8 1/3 to 50 per cent depending upon the rent payable was allowed. The 1960 Act which replaced the 1949 Act adopted a completely new scheme of its own. It provided for the fixation of a fair rent on the basis of the cost of construction and the cost of land and after allowing for depreciation provided for a return of 6 per cent in the case of residential buildings and 9 per cent in the case of non-residential bindings. It also provided for increase in rent for such factors as locality nearness to railway station, market, hospital, school etc. Another significant fact is that all new buildings constructed after 1960 were exempt from the scope of the Act. Still another departure was that the Act applies, in the case of residential buildings, only if the monthly rent does not exceed ₹ 250. The Act also provides for fixation of fair rent under the new provisions even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was the feeling that only fools build houses for wise men to live in . At the time the 1960 Act was passed the Madras Legislature had before it the precedent of the Madras Cultivating Tenants (Payment of Fair Rent) Act, 1956. That Act provides for fixation of fair rent. It also provides that the contract rent, if lower, will be payable during the contract period. Even if the contract rent is higher only the fair rent will be payable. After the contract period is over only the fair rent is payable. The Madras Legislature having this Act in mind still made only the fair rent payable and not the contract rent if it happens to be lower. It is clear, therefore, that the fair rent under the present Act is payable during the contract period as well as after the expiry of the contract period. 17. It was argued that the basis of the decisions in Rai Brij Raj Krishan's Case and Shri Hem Chand's Case was the non-obstante clause in those two Acts. But it is well settled that the intention that a legislation should take effect notwithstanding any earlier legislation on the subject can be both explicit and implicit and that is the position in the present case. We do not also feel c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Acts which were under consideration, mainly the Bombay Act which is vitally different from the Madras Act. A close analysis of the Madras Act shows that it has a scheme of its own and it is intended to provide a complete code in respect of both contractual tenancies as well as what are popularly called statutory tenancies. As noticed earlier the definition of the term 'landlord' as well as the term 'tenant' shows that the Act applies to contractual tenancies as well as cases of statutory tenants and their landlords. On some supposed general principles governing all Rent Acts it cannot be argued that such fixation can only be for the benefit of the tenants when the Act clearly lays down that both landlords and tenants can apply for fixation of fair rent. A close reading of the Act shows that the fair rent is fixed for the building and it is payable by whoever is the tenant whether a contractual tenant or statutory tenant. What is fixed is not the fair rent payable by the tenant or to the landlord who applies for fixation of fair rent but fair rent for the building, something like an incident of the tenure regarding the building. 20. We have then to deal with C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Appeal No. 1201 of 1970, we we find it difficult to assent to the view taken by him in Civil Appeal No. 50 of 1968. The facts giving rise to the two appeals have been stated clearly and succinctly in the judgment given by our learned brother and we think it would be a futile exercise to reiterate them. We may straight away proceed to examine the question which arises for consideration in Civil Appeal No. 50 of 1968. The question is whether a landlord can, during the subsistence of the contractual tenancy, apply for fixation of fair rent under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the Tamil Nadu Act 18 of 1960). The determination of this question depends on the true interpretation of certain provisions of the Tamil Nadu Act 18 of 1960 and we may, therefore, refer to those provisions and see what is their proper meaning and effect. 24. The long title and the preamble of the Tamil Nadu Act 18 of 1960 show that it is enacted to amend and consolidate the law relating to the regulation of the letting of residential and non-residential buildings and the control of rents of such buildings and the prevention of unreasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be agreed upon between the landlord and the Government, or in default of agreement, determined by the Controller. The rent payable by the Government to the landlord would be the fair rent, if any, fixed for the building under the provisions of this Act and if no fair rent has been so fixed, such reasonable rent as the s authorised officer may determine , but the reasonable rent fixed by the authorised officer-shall be subject to such fair rent as may be fixed by the Controller . Section 4 provides for fixation of fair rent of a building on the application of the tenant or the landlord. Sub-section (1) of the section is material and it says that The Controller shall, on application by the tenant or the landlord of a building and after holding such inquiry as the Controller thinks fit, fix the fair rent for such building in accordance with the principles set out in Sub-section (2) or in Sub-section (3) as the case may be, and such other principles as may be prescribed . Sub-section (2) lays down the principles for fixation of fair rent of residential building and Sub-section (3), for fixation of fair rent of non-residential building. The fair rent is to be such as would provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or diminution in the accommodation or amenities, the tenant may claim reduction in such fair rent. Vide Section 5. Section 6 provides that where the amount of the taxes and cesses payable in respect of a building to a local authority for any half year commencing on 1st April, 1950 or on any later date exceeds the amount of taxes and cesses payable for the half year commencing on 30th September, 1946 or for the first complete half year after the date on which the building was first let out, whichever is later, the landlord shall be entitled to claim such excess from the tenant in addition to the rent payable for the building. The consequences of fixation of fair rent are set out in Section 7, Sub-section (1) and (3). Sub-section (1) says that where the Controller has fixed the fair rent of a building- (a) the landlord shall not claim, receive or stipulate for the payment of (i) any premium or other like sum in addition to such fair rent, or (ii) save as provided in Section 5 or Section 6, anything in excess of such fair rent : ... (b) ...any premium or other like sum or any rent paid in addition to, or in excess of, such fair rent whether before or after the date of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencement of the Act is exempted under Clause (i). The reason obviously is that the legislature wanted to encourage construction of new buildings so that more and more buildings would become available for residential as well as non-residential purposes and that would help relieve shortage of accommodation. Clause (ii) exempts any residential building or part thereof occupied by any tenant, if the monthly rent paid by him exceeds ₹ 250/- Here the object of the Legislature clearly was that the protection of the beneficent provisions of the Act should be available only to small tenants paying rent not exceeding ₹ 250/- per month, as they belong to the weaker sections of the community and really need protection against exploitation by rapacious landlords. Those who can afford to pay higher rent would ordinarily be well-to-do people and they would not be so much in need of protection and can, without much difficulty, look after themselves. 25. It is in the light of these provisions of the Tamil Nadu Act 18 of 1960, that we have to consider whether a landlord can, during the subsistence of the contractual tenancy, apply for fixation of fair rent under Section 4, Sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king advantage of the great scarcity of housing accommodation which prevails in almost all urban areas, may extract excessive and unconscionable rent from tenants. The Tamil Nadu Act 18 of 1960 is in its essential character as also in its object and purpose similar to what may conveniently be described as rent control legislation, in other States, such as Maharashtra, Gujarat, West Bengal and Madhya Pradesh. Now it is well settled by decisions of this Court that rent control Acts are not ordinarily intended to interfere with contractual leases and are Acts for the protection of tenants and are consequently restrictive and not enabling or conferring any rights of action but restricting the existing rights either under the contract or under the general law. That is what this Court said in Manujendra Dutt v. Purendu Prosad Roy Chowdhury and Ors. [1967]1SCR475 , while dealing with the Calcutta Thika Tenancy Act, 1949. The same view was taken by this Court in Bhaiya Punjalal Bhagwanddin v. Dave Bhagwat Prasad Prabhuprasad [1963]3SCR312 in relation to Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 which prevails in Maharashtra and Gujarat and which has long title and pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnotation, the expression 'landlord' includes contractual landlord and it might, therefore, appear at first blush, on a purely literal construction, that the contractual landlord can make an application for fixation of fair rent under Section 4, Sub-section (1). But is well settled that a definition clause is not to be taken as substituting one set of words for another or as strictly defining what the meaning of a term must be under all circumstances, but as merely declaring what may be comprehended within the term, when the circumstances require that it should be so comprehended. It would therefore, always be a matter of interpretation whether or not a particular meaning given in the definition clause applies to the word as used in the statutory propriety. That would depend on the subject and the context. Moreover, it is equally well established that the meaning of words used in a statute is to be found, not so much in strict etymological propriety of language, nor even in popular use, as in the subject or occasion on which they are used and the object which is intended to be achieved. The context, the collocation and the object of the words may show that they are not inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Where that happens, Section 7, Sub-section (i), Clause (a) operates and it provides that the landlord shall not be entitled to claim, receive or stipulate for payment of anything in excess of the fair rent. The landlord, can, in such a case, claim, receive or recover only the fair rent and nothing more, despite the contract of tenancy which provides for payment of higher rent. To that extent sanctity of contract is interfered with by the legislation in order to protect the tenant against exploitation by the landlord so that the landlord may not take undue advantage of shortage of housing accommodation and extract excessive rent from a needy and helpless tenant. The stipulation in the contract of tenancy for payment of higher rent would in such a case be clearly in contravention of Sub-section (1) of Section 7 and would be null and void under Section 7, Sub-section (3). But what happens if the fair rent fixed is higher than the agreed rent? Can the landlord claim to recover such fair rent from the tenant, overriding the contract of tenancy which provides for payment of lesser rent? We do not think so. There is nothing in Section 7 or in any other provision of the Tamil Nadu Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be payable by the tenant. If, however, there is a stipulation for payment of rent which is less than the fair rent, it would not be in contravention of Sub-section (1) and hence would not be invalidated by Sub-section (3) but would remain enforceable and binding on the parties and if that be so, the landlord would not be entitled to claim the fair rent in breach of such stipulation. Section 7, Sub-section (3) clearly indicates that the stipulation in the contract of tenancy as regards rent is overridden only where the fair rent is less than the agreed rent and not where it is higher than the agreed rent. This is the only rational construction which, in our opinion, can be placed on the relevant provisions of the Act relating to control of rent. It is not only compelled by grammar and language, but also accords with the broad general considerations we have already discussed. It is difficult to believe that the Legislature should have chosen to interfere with contractual rights and obligations in favour of the landlord who is ordinarily , in view of the acute shortage of housing accommodation, in a stronger and more dominating position than the tenant qua bargaining power. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various Rent Control Acts dealing with the eviction of tenants. Some of these decisions have already been noticed by us earlier while discussing the general object and intendment of Rent Control Acts. They have no direct bearing on the determination of the question before us, but they do lend some support to the view we are taking as to the interpretation of the word 'landlord' in Section 4, Sub-section (1). These decisions which are given in reference to Rent Control Acts of Maharashtra, Gujarat, West Bengal and Madhya Pradesh, clearly establish that the Rent Control Acts do not give a right to the landlord to evict a contractual tenant without first determining the contractual tenancy. So long as the contractual tenancy subsists, the tenant does not need protection because he cannot be evicted in breach of the contract of tenancy. It is only after the contract of tenancy is determined and the landlord becomes entitled to the possession of the premises, that the tenant requires protection and it is there that the Rent Control Acts step in and prevent the landlord from enforcing his right to possession except under certain conditions. The Rent Control Acts do not confer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely discuss the merits of the Madras decision but disposed it of in a few words. The brevity of the discussion does not signify casualness or lack of proper consideration. We must, in the circumstances, hold that the observation of this Court that the Madras decision cannot be regarded as good law was a deliberate and considered pronouncement and the view taken by this Court in regard to the Rent Control Acts of Maharashtra, Gujarat, West Bengal and Madhya Pradesh must equally prevail in regard to the Tamil Nadu Act 18 of 1960. 31. We may point out that in any event we do not find any cogent reason to question the validity of the observation made by this Court disapproving of the Madras decision. We are wholly in agreement with that observation as we do not see any material difference between the language and the scheme of Section 10 of the Tamil Nadu Act 18 of 1969 and the language and scheme of the corresponding provisions of the other Rent Control Acts which came to be construed by this Court. The only distinctive feature which could be pointed out on behalf of the respondents was the provision in Section 10, Sub-section (3), Clause (d). But that provision does not make any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andlord' in Section 10, it is clear from the decisions of this Court in regard to the other Rent Control Acts that it is not at all unusual, having regard to the object and purpose of Rent Control legislation, to read the word 'landlord' in a limited sense so as to exclude contractual landlord and we are therefore not doing anything startling or extraordinary but merely following the path eked out by the decisions of this Court when we place a limited meaning on the word 'landlord' in Section 4, Sub-section (1) which would exclude contractual landlord. That is in fact in conformity with the object and purpose of the Tamil Nadu Act 18 of 1960, which, to quote the words used by this Court in P.J. Irani v. State of Madras [1962]2SCR169 in reference to the earlier Tamil Nadu Act 25 of 1949 which was in material respects in identical terms as the present Act, is intended to protect the rights of tenants in occupation of buildings from being charged unreasonable rates of rent and not to benefit landlords by conferring on them a new right against tenants which they did not possess before. 33. Since we are of the view that it is not competent to the landlord to app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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