Decided on October 03,1950

TEJ SINGH Appellant


Rajamannar, C.J. - (1.) In our opinion this application must be allowed and order of the Appellate Tribunal, the Ct of Small Causes, Madras, confirming the order of the Rent Controller, fixing the fair rent of the premises in question must be quashed on the ground that it is vitiated by an error of law apparent on its face. The learned Judge who decided the appeal has assumed that the payment of taxes and the amounts spent or to be spent for re- pairs cannot properly go into the Consideration of the question of fixation of fair rent under the Act. This is clearly erroneous under Section 4(2) of the Act in fixing the fair rent regard must be had also to the circumstances of the case including any amount paid by the tenant by way of premium or any other like sum in addition to rent after 1-4-1946. It is not necessary to pronounce finally on the question whether the taxes payable by the tenant under a special contract and the amount spent or to be spent for repairs fall within the phrase "any amount paid by the tenant by way of premium or any other like sum". But it appears to us to be clear that such payment by the tenant would certainly be one of the circumstances of which the Controller should have due regard in fixing the fair rent. Undoubtedly, the liability for payment of municipal taxes in respect of the property is primarily on the landlord. If such a liability is undertaken by the tenant, the landlord is clearly getting not only the benefit of the rent but also the benefit of the payment of the taxes. If such payment is not taken into consideration in fixing the fair rent, the result would be unfair to the tenant. Whether or not an amount paid by the tenant towards the taxes can be taken into account in ascertaining what the standard rent is according to the English Statutes, the fact would certainly be a circumstance to be taken into account in fixing the fair rent under Section 4 of our Act.
(2.) The petnr also contended that the circumstance that he spent considerable amount on additions and improvements to the building should also be taken into account, but we think that it cannot be. According to an express term in the lease in pursuance of which he effected the improvements, the improvements had to be handed over to the landlord at the end of ten years when presumably they became the property of the landlord. We cannot accept the petnr's contention on this point.
(3.) The order of the Tribunal is quashed. The appeal will have to be heard afresh in the light of this judgment. Whether further evidence should be taken or not is a matter entirely for the Appellate Tribunal in exercise of the discretion conferred on the Tribunal under Section 12 (3) of the Act. There will be no order as to costs.;

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