PREMIER RUBBER CO Vs. K S S I CORPORATION

JUDGEMENT

(1.) TWO points are raised in this revision by the defendant in a suit for arrears of rent in respect of two buildings in the Industrial estate, Edakkal, owned by the Government of Kerala. The lease arrangement executed in February. 1962 was for two years and under paragraph (13) thereof the tenant had been given an option to renew it on fresh conditions stipulated by Government. In June, 1962 the management of the Industrial Estate was vested in the Kerala State Small Industries Corporation Ltd. In June, 1966 Government passed an order enhancing the rent by stages, to be effective from the 1st of august, 1966, 1967,1968 and 1969, for the purpose of progressively reaching the goal of "economic rent". Orders regarding the enhancement were communicated to the petitioner on 5-9 -1966, and he then filed R. C. O. P. Nos. 246 and 247 of 1967 (on 6-11- 67) under Act 2/65 for fixation of fair rent. While these petitions were pending, Government issued a notification under S 25 of Act 2/65 on 12- 6-68 exempting the Industrial Estate from its provisions. The fair rent proceedings were however continued, overruling the Corporation's objections based on the aforesaid notification, and an order was passed on 4-11-69 fixing the fair rent as Rs. 46/- p. m. The suit was filed by the corporation on 11-6-71 for arrears of rent at the enhanced rates for the period before 6-11-67 and after 11-6-68, contending that the fair rent fixation would operate only during the period from the date of filing of the petitions to the date of the notification under S. 25.

(2.) THE trial court held that Government order of June, 1966 enhancing the rent was against the provisions of the Rent Control Act which were then applicable to the lease arrangement in question. THE stipulation in the lease deed providing for enhancement of rent was therefore "void" As regards the 1968 notification exempting the buildings from the provisions of the Act, it was held that the order in R. C. O. P. Nos. 246 and 247 passed long after the notification, continued to be binding on the parties. It had not ceased to operate from 12-6-68, and the plaintiffs were also estopped from claiming anything more than the fair rent so fixed. THE defendant's contention that the claim for arrears for the period beyond 3 years from the date of the plaint was barred by limitation was also accepted, over-ruling the plaintiff's plea that Ext. A9 letter of the defendant amounted to an acknowledgment of the liability.

(3.) AS for the combined effect of the order dated 4-11-69 (fixing fair rent) and the notification dated 12-6-68, which is the first point raised by the petitioner, it appears to me that a fair rent fixation made by a competent authority under Act 2/65 could not operate for ever, notwithstanding a notification under S. 25 exempting the buildings in question from the purview of the Act. The Act itself does not give any indication as to the date from which an order fixing fair rent is to be treated as operative; but in view of the decision of the Supreme Court in Miran Devi v, Birbal Dass (AIR. 1977 SC. 2191) the date of filing of the application has to be taken as the relevant date. Thus the order in R. C. O. P. Nos. 246 and 247 has to be enforced from 6-11-67. But for how long? In a case where the provisions of the Act continue to govern the contract of lease, the fixation operates until the fair rent is re-fixed in accordance with the provisions of the Act itself. But where the Act itself ceases to apply and no re-fixation thereunder can be conceived of, it is too much to suggest that the Rent Controller's order would continue to operate for ever, totally annihilating the right of the parties to make contracts of their choice. No adjudication, much less one by a tribunal of limited jurisdiction, can have such effect. Fixation of fair rent by a Rent Control court is only a quantification of the rent payable and receivable is accordance with the Act, irrespective of contract; and when the provisions of the Act cease to apply, such quantification also ceases to be binding on the parties. The notification under S. 25 is an exercise of legislative power by executive to which such power is delegated, and the Rent Control Tribunal's. decision cannot affect its operation so as to nullify the very effect of the exemption recognised by it.