1. This Civil Revision Petition has been filed by the tenant under Section 25 of the Tamil Nadu Buildings (Lease & Rent Control) Act 18 of 1960 as amended by Act 23 of 1973, questioning the judgment dated 20.10.2017 passed by the IX Court of Small Causes, Chennai / Rent Control Appellate Authority in R.C.A.No.71 of 2017, which appeal had also been filed by the revision petitioner herein, questioning the order dated 15.11.2016 passed by the XIII Court of Small Causes, Chennai / Rent Controller in R.C.O.P.No.196 of 2015, which, Rent Control Original Petition had again been filed by the present revision petitioner/tenant under Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960.

BACKGROUND FACTS:

2. The revision petitioner, is a tenant under the respondent for the petitioner premises, which is a non-residential portion in the ground floor, measuring 5377 Sq.Ft. including 4707 Sq.Ft. of super market area, coffee, medical, popcorn and juice shops, flower shop and refresh room at Door No.105, Dr.Radhakrishnan Salai, Mylapore, Chennai – 600 004. The monthly rent agreed between the petitioner and the respondent was Rs.12,00,000/-. It is claimed that a sum of Rs.1,20,00,000/- had been paid as interest free deposit. Contending that the monthly rent is exorbitant, the petitioner had filed an application under Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 to fix the fair rent of the premises aforementioned at Rs.4,73,000/-. The Rent Controller / XIII Court of Small Causes, Chennai by order dated 15.11.2016, after examining the evidence presented, had determined the fair rent for the premises at Rs.10,00,999/-.

3. Aggrieved by such fixation of fair rent, the petitioner had filed R.C.A.No.71 of 2017. That appeal came up for consideration before the Rent Control Appellate Authority / IX Court of Small Causes, Chennai, who by judgment dated 20.10.2017, had confirmed the fair rent at Rs.10,00,999/- and consequently, had dismissed the appeal. The tenant has filed the present Revision Petition, questioning such judgment.

RCOP.No.196 of 2015:

4. The petitioner / M/s.Sunrise Chennai Distributors Private Limited is a tenant under the respondent / M/s.R.P.Rajarajan Associates, with respect to the ground floor of the premises at Door No.105, Dr.Radhakrishnan Salai, Mylapore, Chennai – 600 004 for non-residential purposes for an area of 5377 Sq.Ft and 670 Sq.Ft for loading and unloading bay at No.103, Dr.Sivasamy Salai, Mylapore, Chennai -600 004.

5. It is the contention of the petitioner that respondent was the absolute owner of the aforementioned property and the petitioner had entered into a tenancy agreement for non-residential purposes on a monthly rent of Rs.12,00,000/-. A sum of Rs.1,20,00,000/- had been paid as interest free deposit. It is claimed that the petitioner had paid a further sum of Rs.3,00,00,000/- as compensation for vacating the earlier tenant. It was stated that the superstructure comprised of part RCC structure and part metallic roof with a loading and unloading bay. It was also stated that the petitioner occupies a parking area for parking 8 cars at a time. The property has two entries, one facing South at Dr.Radha Krishnan Salai and the other facing west at Dr.Sivasamy Salai. There are Hotels and Banks and other business establishments near the place. It was stated that the market value at No.105, Dr.Radhakrishnan Road is Rs.23,500/-per Sq.Ft and at Dr.Sivasamy Salai at Rs.20,000/- per Sq.Ft. It was stated that the market value of the proportionate undivided share of land in occupation of the petitioner was Rs.4,44,01,500/-. It was further stated that the ground floor was used as a super market by the petitioner. The building consists of 6 other floors. The roof is of RCC slab and the flooring is stone flooring. There is a popcorn shop and a vegetable shop in the front portion and the roof is Tin sheet or metallic sheet. There are two further floors with metallic sheet over the said front portion. Pavement tiles are used for the flooring. The car parking area consists of 756 Sq.Ft and this is covered by a metallic sheet. There is no structure over this portion. A flower shop is also on the ground floor with no structure over it, but with Tin sheet roof and ceramic tile flooring. It is also stated that a refresh room is in the ground floor and the roof is of RCC slab and the flooring is ordinary tiles. There is yet another refresh room over this portion in the front floor also, in the occupation of the petitioner. It was also stated that on the southern side, there is a loading and unloading bay and storage with a common passage at No.103, Dr.Sivasamy Salai with ground and first floors. The roof is of metallic sheet. A portion of 318.5 Sq.Ft in the ground floor and first floor is occupied by the petitioner and another portion measuring 351.5 Sq.Ft in the ground floor is also occupied by the petitioner. The first floor of this portion is used for housing the generators to cater the need for the entire building. The roof is with metallic sheet.

6. It is claimed that the building is aged about 30 years. It was further stated that all basic amenities like water supply, electricity and sanitation are available. The building is a Class-A building in accordance with PWD norms. It had been stated that the total super market RCC structure including the refresh room occupied by the petitioner is 3585 Sq.Ft. It was further stated that the cost of construction in the year 2014 as per PWD rate was Rs.6250/- per sq.m and with additions, would come to Rs.7,500/- per sq.m or Rs.697 per Sq.Ft. It was further stated that for the cost of construction of Metallic thin sheet portion as per PWD rate would come to Rs.4,392/- per sq.m or Rs.408/- per Sq.Ft in the year 2014. It was stated that the total plinth area occupied by the petitioner having metallic sheet roofing would be 1,797 Sq.Ft. The total cost of construction of RCC Building, and metallic sheet building is for 3,585/-and for 1,797 Sq.Ft respectively was given as Rs.32,31,921/- and after providing depreciation for 30 years, the net cost of the building was given at Rs.22,94,670/-. After adding twenty two and half percentage (221/2 %) for amenities, the total cost of building was given as Rs.28,10,970/-. The proportionate cost of land at both, Dr.Sivasamy Salai, at Rs.20,000/- per Sq.Ft for 494 Sq.Ft and at Dr.Radhakrishnan Salai at Rs.23,500/- per Sq.Ft for 1469 Sq.Ft, was given at Rs.4,44,01,500/-. The total cost of land and building was stated to be about Rs.4,72,12,500/-. The fair rent at 12% per annum for non-residential purposes was thus calculated at Rs.4,73,000/- per month.

7. Claiming as above, the petitioner filed the Rent Control Original Petition in R.C.O.P.No.196 of 2015. A counter has been filed by the respondent, disputing the claim that the fair rent should be fixed at Rs.4,73,000/- per month. It was stated that the respondent had been let out an extent of 4500 Sq.Ft of premises, and not 5377 Sq.Ft. The interest free deposit and the monthly rent were both admitted. The payment to the erstwhile tenant was put to strict proof. It was stated that there is no difference in the market value of land in Dr.Radhakrishnan Salai and in Dr.Sivasamy Salai. It was stated that the petitioner was not able to pay the rent since he was not doing good business and had therefore filed the application, claiming fixation of fair rent. It was stated that the entire area including the loading and unloading bay, the common passage and the first floor metallic sheet roof are included under the tenancy. It was stated that the total cost of construction was Rs.35,000/- per Sq.Ft and the market value of the land is Rs.30,000/- per Sq.Ft. It had been stated that the fair rent has to be fixed only from the date of the petition. It had been stated that the claim at Rs.4,73,000/- as fair rent has to be rejected by the Court. It had been stated that the petition should be dismissed.

8. The petition came up for consideration before the XIII Court of Small Causes, Chennai / Rent Controller. During the course of trial, on the side of the petitioner, one witness, K.Natarajan was examined as PW.1 and he also marked Exs.P1 and P2, namely, a copy of the report of the Engineer and a copy of Document No.1306/2014. On the side of the respondent, two witnesses were examined namely Mr.Parthiban as R.W.1 and G.Chellaiah Sarathy as R.W.2. Exs.R1 to R7 were also marked. Ex.R5 was the report of the Engineer and Ex.R6 was the sketch of the Engineer and Ex.R7 was the Analysis Report.

9. On the basis of the pleadings and oral and the documentary evidence, the Rent Controller proceeded to determine the fair rent for the petitioner premises. With respect to the type of building, it was observed that the building is a Type 1 building. With respect to the age of the building, the Rent Controller took into consideration the report in Ex.R5 and also the Sale Deed, Ex.R2, which reflected that the building was 30 years in the year 2011. Since the petition was filed in the year 2015, the age of the building was fixed as 34 years. Taking into consideration that fact, the depreciation was calculated at one percentage/ 0.7105. With respect to the basic amenities, the Rent Controller granted 20% for basic amenities. The Rent Controller, in view of the fact that there was an over head tank, electric motor, side dadoos and compound wall on the eastern side, also granted 5% for the said Schedule I amenities.

10. With respect to the Plinth area and the cost of construction, the reports of both the engineers were considered by the Rent Controller and the Rent Controller took into consideration the report of the respondent Engineer, Ex.R5 wherein a lesser area was given as the plinth area under occupation of the tenant for RCC roof and for metallic tin roof and therefore, took determined, the plinth area under occupation at 3284.64 Sq.Ft for RCC roof and 1661 Sq.Ft for metallic sheet roof. With respect to the cost of construction, the Engineer of the respondent had taken Rs.2,000/- per Sq.Ft, whereas the engineer of the petitioner had fixed it at Rs.697/- per Sq.Ft and at Rs.408/- per Sq.Ft for RCC roof and metallic roof. The evidence of R.W.2 was also considered, who stated that there were special features like beams and columns and lentils.

11. Reference was made to 1996 (2) LW 637 in the case of T.H.S. Rahmath Fathima Vs. T.K. Kader Mohideen, wherein it was held that P.W.2 rates were only guidelines and that the actual cost of construction can be taken into consideration for fixing the fair rent. The Rent Controller also considered 1996 (1) LW 497, in the case of Messers. Maya Applicances and Centred Equipment, rep. by its Partner Thiru Varadarajan Vs. A. Sulochan Reddy, wherein a learned Single Judge of this Court had held that as far as possible, Public Works Department rates should be taken into consideration, and therefore, took into consideration the cost of construction at Rs.720/- per Sq.Ft for RCC roof and Rs.408/- per Sq.Ft for metallic tin sheet.

12. With respect to the land value, the Rent Controller observed that the Engineer of the petitioner had given the land value at Rs.23,500/-per Sq.Ft for Dr.Radhakrishnan Salai and and at Rs.20,000/- per Sq.Ft for Dr.Sivasamy Salai, had come to a total value of the land at Rs.4,44,01,500/-. This was contrasted with the valuation given by the Engineer on behalf of the respondent in Ex.R2 and in report Ex.R5, wherein the Engineer had determined, the land value at Rs.12,15,00,000/-. The Sale Deed in Ex.R3 was also examined and it was found that the land value in that particular Sale Deed for the property at old No.54, New No.95, Dr.Radhakrishnan Salai, Mylapore, Chennai -600 004, was determined at Rs.15,00,00,000/- per ground. It was stated that the present Rent Control Petition had been filed prior to that particular Sale Deed. The Rent Controller then took into consideration Ex.R2 Sale Deed, which was of the year 2011 and Ex.R3, Sale Deed, which was of the year 2015 and determined the land value at Rs.10,00,00,000/- per ground. The valuation of the Engineer on the side of the petitioner on the basis of the guideline value was not taken into consideration.

13. With respect to the apportionment, it was found that the premises consisted of 7 floors. However, a perusal of Ex.R5 had indicated that the petition premises consisted of ground + Mezzanine floor + 5 floors. That was taken into consideration. The fair rent was thus calculated by the Rent Controller by determining, the total value of construction / building at Rs.30,42,628/- and 20% was added for amenities and the net value was given at Rs.36,51,155/-. The Rent Controller granted a depreciation of one percent per year for 34 years and finally determined the value of the construction at Rs.25,94,146/-.

14. With respect to the land value, the portion under the occupation of the petitioner under RCC roof and metallic roof sheet and for the refresh room was given at Rs.9,53,33,333/-. After adding 5% for Schedule I amenities, the total value of land and building was determined at Rs.10,00,99,999/-, and the fair rent at 12% per annum, was fixed at Rs.10,00,999/- per month.

RCA.No.71 of 2017:

15. The petitioner had preferred a Rent Control Appeal and the appeal came up for consideration before the Rent Control Appellate Authority / IX Small Causes, Chennai. A judgment was passed on 20.10.2017. The Rent Control Appellate Authority re-examined the evidence on record and observed that the Rent Controller had analysed the necessary criteria to determine the fair rent. It was stated that the age of the building was taken at 34 years and that there was no objection to that determination. It was further stated that with respect to cost of construction, the Rent Controller had actually taken into consideration the P.W.D rates for cost of construction overlooking the evidence adduced on behalf of the respondent/landlord and it was further observed that the respondent/landlord had not filed any appeal and therefore, that rate was affirmed.

16. The determination of the value of the land was the main contention raised before the Rent Control Appellate Authority. Insistence was made to examine Ex.P2. Ex.P2 was a Sale Certificate relating to Punjab National Bank Housing Finance Limited and was a sale through auction. The advantages of the petitioner premises was contrasted with the property as given in Ex.P2, wherein it is seen that the petition premises was located in a highly commercial area. Ex.P2 related to a Residential portion in the third floor.

17. It was also held that the cost of construction should be determined as on the date of the petition. The Rent Controller had also examined that aspect and had considered that for a building with more than 1 floor, the cost of land must be proportionately distributed in accordance with the number of floors in the building. It was observed that the petitioner/appellant was utilizing that the premises only for non- residential purposes. It was found that the fixation of fair rent at Rs.10,00,999/- was reasonable and just. As a matter of fact, there had been a reduction in the rent from Rs.12,00,000/- per month as agreed between the parties to Rs.10,00,999/-. The Rent Control Appellate Authority therefore confirmed the fair rent as determined by the Rent Controller and dismissed the appeal.

18. Questioning that particular order, the petitioner had filed the present Revision Petition under Section 25 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, as amended.

CRP.No.4307 of 2017:

19. It has been urged during the course of arguments by Mr.G.Vairava Subramanian, learned counsel for the petitioner, that the value of the land, which had been determined at Rs.10,00,00,000/-should be re-examined by this Court. It was the contention of the learned counsel that Exs.R3 and R4 had not been taken into consideration by both the Rent Controller and the Rent Control Appellate Authority. It had been stated that on the basis of a presumption, the land value had been fixed at Rs.10,00,00,000/- per ground. It had been further contended that both the authorities had erred in rejecting Ex.P2, holding that it was a sale through auction and that it related to a residential premise and that therefore, it cannot be taken into consideration. The learned counsel stated that the actual market value would be reflected in an auction sale. It was stated that if Ex.R2 had been considered, the value of the land would come to Rs.22,071/- per Sq.Ft as on August 2011. It was stated that if Ex.R3 had been considered, the land value would come to Rs.31,799/- per Sq.Ft in the year 2015. It was stated that therefore, the determination of the value of the land at Rs.10,00,00,000/- per ground is not correct.

20. The learned counsel for the petitioner further pointed out that Ex.R3 related to a premises, which was only 3 or 4 buildings away from the petition premises. It was further contended that the value should be apportioned for 7 floors and not for 5 floors as taken by both the Rent Controller and by the Appellate Authority.

21. The learned counsel for the petitioner further urged that this Court should re-visit the entire calculation and re-determine the fair rent fixed for the petitioner premises.

22. Mr.V.Anand, learned counsel for the respondent, however, justified the orders of both the Authorities and stated that the cost of construction had been taken at P.W.D rates and the land value had been determined after taking into consideration Exs.R2 and R3. It was also contended by the learned counsel that both the Authorities had actually reduced the contractual rate and that they have been fair in their assessment of fixation of fair rent for the premises under the occupation of the revision petitioner. The learned counsel for the respondent urged that this Revision Petition should be dismissed.

23. I have carefully considered the arguments advanced and perused the materials on record.

24. Section 25 (1) of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 is as follows:

‘(1) The High Court may, on the application of any person aggrieved by an order of the Appellate Authority, call for and examine the record of the Appellate Authority, to satisfy itself as to the regularity of such proceeding or the correctness, legality or propriety of any decision or order passed therein and if, in any case, it appears to the High Court that any such decision or order should be modified, annulled, reversed or remitted for reconsideration, it may pass orders accordingly.

(2)……………..’ 25. This Revision Petition has been filed, taking into advantage of the aforementioned provision. The tenant is the revision petitioner. The tenant had filed R.C.O.P.No.196 of 2015 under Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, seeking fixation of fair rent for the premises under occupation. Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act can be invoked by either the tenant or by the landlord. In the instant case, the contractual rent for the premises under occupation of the petitioner is Rs.12,00,000/-. Claiming that the fair rent should be fixed, the tenant had preferred the said R.C.O.P.No.196 of 2015.

26. Section 4 of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, is an exhaustive provision, giving the criteria and the method, in which, the fair rent of a particular premises should be determined. Section 4 is as follows:

‘[4. Fixation offair rent. –

(1) The Controller shall on application made by the tenant or the landlord of a building and after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in the following sub-sections.

(2) The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building.

(3) The fair rent for any non-residential building shall be twelve per cent gross return per annum on the total cost of such building.

(4) The total cost referred to in sub-section (2) and sub-section (3) shall consist of the market value of the site in which the building is constructed/ the cost of construction of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation offair rent:

Provided that while calculating the market value of the site in which the building is constructed, the Controller shall take into account only that portion of the site on which the building is constructed and of a portion up to fifty per cent, thereof the vacant land, if any, appurtenant to such building, the excess portion of the vacant land, being treated as amenity:

Provided further that the cost of provision of amenities specified in Schedule I shall not exceed-

(i) in the case of any residential building, fifteen per cent; and

(ii) in the case of any non-residential building, twenty-five per cent, of the cost of site in which the building is constructed, and the cost of construction of the building as determined under this section.

(5) (a) The cost of construction of the building including cost of internal water-supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned. The Controller may, in appropriate cases, allow or disallow an amount not exceeding thirty per cent, of the cost of construction having regard to the nature of construction of the building.

(b) The Controller shall deduct from the cost of construction determined in the manner specified in clause (a), depreciation calculated at the rates specified in Schedule II.]’

27. The petitioner, in the instant case, is utilizing the premises for non-residential premises. Therefore, the fair rent should be 12% on the total cost of such building. The total cost of the building would include the market value of the land where the building is situated and also the cost of construction of the building and further, provision has to be made for the amenities, which are provided.

28. While calculating the market value, it is required that the Rent Controller should take into consideration only that portion of the land, on which, the building is constructed. The cost of amenities for non-residential building can be at the most 25% of the cost of the land and the cost of construction. It is also provided that the cost of construction shall be determined with due regard to the rates adopted by the Public Works Department. Further, depreciation can also be deducted in accordance with the rates as specified in Schedule II. Schedule I of the said Act gives the list of amenities and Schedule II, gives the rate of depreciation.

29. In the instant case, the Rent Controller had determined the age of the building at 34 years. This was arrived at by examining Ex.R2/Sale Deed, which was with respect to the same building. R2, was dated 18.08.2011. In Ex.R2, in Annexure-I A, it had been mentioned that the age of the building was 30 years. Therefore, in the year 2015, when the Rent Control Petition was filed, the Rent Controller determined the age of the building at 34 years, I find that a fair assessment of that fact had been given by both the Rent Controller and the Appellate Authority.

30. With respect to the cost of construction, again, the Rent Controller had only taken the PWD rates and as a matter of fact, this had worked to the disadvantage of the respondent/landlord, who claimed that the cost of construction should be atleast Rs.30,000/- per Sq.Ft. However, the Rent Controller had taken the cost of construction only at Rs.720/- per Sq.Ft for RCC roof portion and at Rs.408/- per Sq.Ft for metallic sheet roof portion. The petitioner can certainly have no grievance at that determination. I hold that both the authorities below had been extremely fair and had considered actually the case of the Revision Petitioner herein to their advantage, while determining the cost of construction.

31. With respect to the area under occupation, the Rent Controller had determined the specific area in occupation with respect to the supermarket area and with respect to the refresh room. It was found that the supermarket had a built up area of 3234 Sq.Ft and the refresh room had a built up area of 50.64 Sq.Ft. With respect to the metallic sheet roofing area, the Rent Controller had again has sub-divided the area into the front portion and the two separate rear portion and had come to the conclusion that the total area under occupation of the revision petitioner was 1661 Sq.Ft. The Rent Controller had added only 20% as basic amenities. These aspects were not put to issue during the course of the Revision Petition. Depreciation had been granted at one percent for 34 years and that aspect again has not been questioned.

32. The main issue to be addressed is with respect to the land value. It is insisted that the land value should be calculated in accordance with Exs.R2 and R3. As stated, Ex.R2 is the Sale Deed in the year 2011 for the very same building and Ex.R3 is with respect to yet another building, a few buildings away. With respect to Ex.R2, the land value in the year 2011 was given at Rs.23,500/- per Sq.Ft. In Ex.R5, the Engineer had determined the market value after giving an appreciation for the years 2011-2015 and had arrived at Rs.12,15,00,000/- per ground. With respect to Ex.R3, which is yet another Sale Deed of the year 2015, the market value was assessed at Rs.15,00,00,000/- per ground. The Rent Controller had actually reduced the market value from Rs.15 Crores per ground to Rs.10 Crores per ground. This is to the disadvantage of the respondent/landlord.

33. The petitioner had placed reliance on Ex.P2 and a careful perusal of Ex.P2 dated 29.04.2014, shows that it is a Sale Certificate issued by Punjab National Bank Housing Finance and registered as Doc.No.1306/2014. It is with respect to a residential portion in the third floor of a building. I hold that the land value therein can never be equated to the prime land value in the ground floor of a building in a prime locality with two separate entries, facing two separate commercially viable roads with frontage to the advantage of the petitioner herein. Moreover, the present petition premises is used for non-residential purposes and not for residential purposes.

34. I would therefore not find any fault in the order of the Rent Controller or in the judgment of the Rent Control Appellate Authority in reducing the market value from Rs.15 Crores per ground to Rs.10 Crores per ground. The revision petitioner cannot have any grievance over that determination.

35. One more aspect raised was with respect to the apportionment and in this regard, the Rent Controller had placed reliance on Ex.R5, wherein, the Engineer of the respondent had actually extracted the Tamil Nadu Government Gazette dated 27.05.1987, wherein a perusal of Notification in G.O.Ms.No.645, Housing and Urban Development dated 08.05.1987, would reveal that the petitioner premises consists of Ground floor + Mezzanine floor + 5 floors. To contradict this fact, the petitioner had not produced any document. Therefore, even the apportionment of the total cost on the basis of Ground floor + Mezzanine floor + 5 floors cannot be disputed.

36. In view of all the above reasons, I hold that both the Rent Controller and the Rent Control Appellate Authority had correctly assessed the fair rent of the premises at Rs.10,00,999/- per month. There is no infirmity in both the order and the judgment of both the Courts and the petitioner has not made out any ground to interfere with the well considered order and judgment passed by both the authorities. The regularity of both the proceedings and their correctness, their legality and their proprietary of the decisions are upheld by me.

37. I would therefore, dismiss the present Civil Revision Petition and affirm the orders of both the Rent Controller and the Rent Control Appellate Authority.

38. In the result,

(i) The order passed in RCOP.No.196 of 2015 dated 15.11.2015 on the file of the XIII Court of Small Causes, Chennai and the judgment in RCA.No.71 of 2017 dated 20.10.2017 on the file of the IX Court of Small Causes, Chennai are both confirmed and the fair rent for the premises under the occupation of the revision petitioner is determined at Rs.10,00,999/- (Rupees Ten Lakhs Nine Hundred and Ninety Nine only) per month.

(ii) The Civil Revision Petition stands dismissed with costs.

(iii) Connected miscellaneous petition is closed.