KARAMSEY KANJI Vs. VELJI VIRJI
LAWS(BOM)-1954-1-21
HIGH COURT OF BOMBAY
Decided on January 22,1954

Karamsey Kanji Appellant
VERSUS
Velji Virji Respondents


Referred Judgements :-

KARNANI INDUSTRIAL BANK V. SATYA NIRANJAN SHAW [REFERRED TO]



Cited Judgements :-

RAVAL AND CO VS. K G RAMACHANDRAN [LAWS(MAD)-1966-1-10] [REFERRED TO]
VAZIRBOO VS. KESHAVLAL NARSHIDAS [LAWS(BOM)-1969-2-11] [REFERRED TO]
FILMISTAN PRIVATE LTD VS. MUNICIPAL CORPORATION FOR GREATER BOMBAY [LAWS(BOM)-1971-6-6] [REFERRED TO]
SD UMAR SD AHMED VS. DEDAMIYA HUSENBHAI [LAWS(BOM)-1975-7-10] [REFERRED TO]
L.M. CHAKRADEO VS. GOOLABANUBAI YOOSUF LALJI [LAWS(BOM)-1956-1-31] [REFERRED TO]
VITHAL KRISHNAJI NIVENDKAR VS. STATE [LAWS(BOM)-1959-9-17] [REFERRED TO]
VITHAL KRISHNAJI NIVENDKAR VS. PARDUMAN RAM SINGH [LAWS(SC)-1962-3-43] [REFERRED TO]
SOHRAB N. TAVARIA VS. JAFFERALI G. PADAMSEE [LAWS(BOM)-1956-3-26] [REFERRED TO]


JUDGEMENT

M.C.CHAGLA, J. - (1.)A very interesting and important question arises on this revision application, and I have received considerable assistance from the able arguments both of Mr. Kapadia and of Mr. Sakhardande. The facts briefly are that the landlord constructed a building in December 1946 and he let out a room on the 2nd floor of that building immediately thereafter at a rent of Rs. 28. In March 1949 the tenant applied to the learned Civil Judge at Thana for fixation of standard rent. The learned Judge dismissed that application holding that Us. 28 was the proper rent. There was an appeal to the District Court, and the learned District Judge on April 17, 1951, held that the standard rent was Rs. 23 -12 -0. The landlord then filed a suit in the Small Causes Court for arrears of rent against the tenant and the arrears claimed were from January 1, 1951, to December 81, 1951. The landlord's .contention was that he was entitled to the contractual rent of Rs. 28 for the months of January, February and March 1951 and that it was only from the date of the fixation of the standard rent, viz. April 17, 1951, that the tenant was entitled to the reduction of rent. The trial Court held in favour of the landlord, but the appellate Court came to the conclusion that the order of fixation of the standard rent was retrospective in character and therefore the landlord was not entitled to recover rent in excess of the standard rent fixed even for the period December 1950 to March 1951, and the question that has been raised in this application is as to what is the effect of the fixation of standard rent in the case of premises which were let after September 1, 1940.
(2.)TURNING to the statute, 'standard rent' is defined in Section 5(10)(b). The basic date fixed by that sub -section is September 1, 1940, and if the premises were let on September 1, 1940, then the standard rent is the rent at which they were so let; if they were not let on September 1, 1940, then the standard rent is at which they were last let before that date; and then we come to Clause (iii) where they were first let after September 1, 1940, the rent at which they were first let; and the contention is that inasmuch as these premises were first let in December 1946, they fell within this sub -section and the standard rent of these premises was Rs. 28 at which they were let. Now, there is Clause (iv) to Section 5(10)(b) which provides, 'in any of the cases specified in Section 11, the rent fixed by the Court'; and when we turn to p. 11 it provides;
(1) In any of the following cases the Court may, upon an application made to it for that purpose, or in any suit or proceeding, fix the standard rent at such amount as, having regard to the provisions of this Act and the circumstances of the case, the Court deems just -(a) where any premises are first let after the first day of September 1940, and the rent at which they are so let is in the opinion of the Court excessive or.... Therefore, it is clear that there is no finality about the standard rent in respect of premises which are let after September 1, 1940. It is open to the Court not to accept the rent at which they were let for the first time after September 1, 1940, -if in the opinion of the Court that rent was excessive. Therefore, it may be said that in a sense the standard rent of premises first let after September 1, 1940, is a sort of ad interim standard rent, a standard rent capable of being modified if the Court is satisfied that that rent is excessive.

Now, what is urged by Mr. Kapadia on behalf of the landlord is that every order of the Court must be prospective and not retrospective, and it is therefore urged that till the Court on April 17, 1951, determined the standard rent to be Rs. 23 -12 -0, or, in other words, till the Court came to the conclusion that the rent of Rs. 28 was excessive and should be reduced, the standard rent continued to be the rent at which the premises were first let, and the effect of the order of the Court could only be that from the date of the order the standard rent was Rs. 23 -12 -0. It is further urged that the order of the Court of April 17, 1951, could not possibly alter the standard rent which under the provisions of the law the landlord was entitled to recover and in recovering which he was not contravening any provision of the Act. Now, Section 7 of the Act provides that except where the rent is liable to periodical increment by virtue of an agreement entered into before September 1, 1940, it shall not be lawful to claim or receive on account of rent for any premises any increase above the standard rent, unless the landlord was entitled to recover such increase under the provisions of this Act. It is, therefore, argued that if the standard rent of the premises was from the date of the tenancy the rent fixed by the Court on April 17, 1951, the result would be that it was not lawful for the landlord to recover a rent in excess of that rent, and it is pointed out that such an interpretation would be patently untenable. Attention is then drawn to Section 18 which penalises a landlord who receives any fine, premium or other like sum or deposit or any consideration, other than the standard rent, and therefore it is pointed out with some force that if retrospective effect were to be given to the order of April 17, 1951, the act of the landlord in receiving the rent, which was a perfectly proper act in view of the definition of 'standard rent' given in Section 5(10)(b)(iii), would be rendered an unlawful act and the landlord would become liable to be penalised. It is further pointed out that under Section 13(1)(j) if a tenant sub -lets the premises before the coming into operation of this Act and charges rent in excess of the standard rent, then he would be liable to be evicted, and therefore it is said that if the tenant charged his subtenant the same rent as he was paying to the landlord and which was the standard rent within the meaning of Section 5 (10)(b)(iii) and if the Court were subsequently to hold that that rent was excessive and reduced the original rent, the tenant would be liable to be evicted because it could be said by his landlord that he had charged his sub -tenant a rent which was in excess of the standard rent. According to Mr. Kapadia all these considerations clearly indicate that the Legislature did not intend the fixing of the standard rent under Section 11(1)(a) to be retrospective but prospective.

(3.)RELIANCE is also placed on a judgment of the English Court in Clift v. Taylor [1948] 2 K.B. 394 Lord Justice Scot in construing the English Rent Act pointed out:.the Act interferes with freedom of contract and thus modifies an important right of the individual. Any real ambiguity of language in any particular provision, still apparent even when construed in the light of the whole Act, ought to be resolved in favour of maintaining common law rights. With respect, it is perfectly correct that a Court must lean in favour of maintaining the sanctity of contracts. But it is equally true that in construing any statute the Court must keep in mind the object which the Legislature had in placing a particular piece of legislation on the statute book, and this is even more so where the Court is dealing with a piece of social legislation. Even the learned Chief Justice in the observation on which reliance is placed says that there must be an ambiguity which is apparent after the provision is construed in the light of the whole Act, and Mr. Kapadia may be right that if after I have looked at all the provisions of the Act and borne in mind the object of the Legislature an ambiguity remains, the ambiguity should not be resolved to defeat the sanctity of contracts but to maintain that sanctity. But as I shall presently point out, in my opinion there does not seem to be any such ambiguity which would induce me to give the benefit of it to the landlord.


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