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     REPORTABLE

  IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4422 OF 2011

[Arising out of S.L.P. (C) No.6319 of 2007]

Mohammad Ahmad & Anr.          ....Appellants Versus

Atma Ram Chauhan & Ors.     ....Respondents

J U D G M E N T  Deepak Verma, J. 1.Leave granted. 2. One half of the  lis between landlord and  tenant would not reach courts, if tenant agrees  to pay the present prevalent market rate of  rent of the tenanted premises to the landlord.  In that case landlord would also be satisfied  that he is getting adequate, just and proper  return on the property. But the trend in the

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litigation  between  landlord  and  tenant  shows  otherwise. Tenant is happy in paying the meagre  amount of rent fixed years ago and landlord  continues to find out various grounds under the  Rent Acts, to evict him some how or the other.  This case appears to be another classic example  of the aforesaid scenario. 3. Thumb nail sketch of the facts of the case  are mentioned hereinbelow:-  Appellants herein are the tenants of two  shops admeasuring 10x12 feet each, equivalent  to 240 sq. ft., situated at National Highway  Chakrata  Saharanpur  (U.P.).  The  map  attached  alongwith counter affidavit of the Respondent  Nos.  1  to  3  (which  is  not  disputed  by  the  Appellants) shows that these shops are part of  the building known as Jaitpur Sadan, now coming  under commercial area. As per the sketch on  record, it is bounded by 110 ft. wide National

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Highway to the east, a 90 ft. wide Town Hall  Road  to  the  west,  a  20  ft.  by  lane  to  the  south, and nothing is shown and no construction  appears  to  be  there  in  the  north.  In  all,  Jaitpur Sadan has five shops of the same size  facing east and four shops of the same size and  one  adjoining  mini-store  (which  is  probably  another  smaller  shop)  and  staircase  for  reaching first floor, facing west.  4. Earlier  when  the  abovementioned  Jaitpur  Sadan was constructed, it appears that the same  was  about  20  Kms.  away  from  the  city  of  Saharanpur. Now with the passage of time, the  outer limits of the city have grown and have  come to include the said building.  Thus, it  can be called a commercial area. 5. Respondent No. 1 who was working as the  Medical  Officer  at  Zila  Parishad,  Saharanpur  retired  on  31.07.1992.  For  his  personal

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bonafide need he needed these two small shops,  i.e. an east-facing room (for consultation and  setting up medical equipment) and an adjoining  west-facing room (to serve as a waiting room  for patients).  The sketch map shows that one  of the shops facing western side is already in  his  occupation.  He  had  requested  both  Appellant No.1 and Respondent No.4, Shri Md.  Ahmad Iqbal, respectively, for release of any  one  pair  of  shops,  but  neither  of  the  two  acceded to his request. 6. Thus,  he  filed  an  application  under  Section 21(1)(a) of the U.P. Act No. 13 of 1972  (hereinafter shall be referred to as the 'Act')  against the Appellants/Tenants as well as the  Respondent No.4 praying for release of any one  pair of the said two pairs of shops in his  favour. At that time the Appellants were paying  rent at Rs. 40 and Rs. 20/- (total Rs. 60/- per

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month)  for  the  pair  of  shops  in  their  possession. 7. The matter was contested by the Appellants  before the Prescribed Authority/IV Additional  Civil Judge, Saharanpur, whereby and whereunder  the said authority allowed the application of  Respondents Nos.1 to 3  - landlords and on a  comparative  assessment  of  facts  and  circumstances, released the property (shown as  Item A in the Map annexed) in which Respondent  No.4 was a tenant, in their favour. 8. Feeling  aggrieved  thereof  Rent  Control  Appeals  were  preferred  by  both  the  parties,  i.e., Respondent Nos.1 to 3 - landlords and  Respondent  No.4  before  Additional  District  Judge,  Saharanpur.  Vide  judgment  and  order  dated  24.08.2004,  the  Appellate  Court  upheld  the decree of the IV Additional Civil Judge,  Saharanpur but modified it, to the extent that

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the  pair  of  shops  in  tenancy  of  present  Appellants be released (shown as Item B in the  Map annexed), instead of the pair of shops in  the possession of Respondent No.4 as decreed by  the Trial Court,  and furthermore, they were  directed  to  deliver  peaceful  and  vacant  possession thereof to the Respondent Nos. 1 to  3, within one month from the date of the said  order. Thus, the order of release passed by  Prescribed  Authority  came  to  be  partially  modified by the Appellate Authority in as much  as the order of release for two shops in their  favour was maintained. 9. Thus,  unsatisfied  and  feeling  aggrieved  thereof  the  Appellants  preferred  Civil  Miscellaneous Writ Petition No. 39727 of 2004  before learned Single Judge of the High Court  of Judicature at Allahabad. It appears while  considering  the  application  for  stay,  the

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learned  Single  Judge  directed  that  the  Appellants will not be dispossessed from the  shops  in  dispute  provided,  w.e.f.  September,  2005 onwards they pay the Respondent Nos. 1 to  3, rent at the rate of Rs. 600/- per month by  7th of each succeeding month. In case of two  defaults, the stay order would stand vacated  automatically. Non-payment of rent may also be  a ground for dismissal of the writ petition.  The said order was passed by learned Single  Judge  in  the  Appellants'  Writ  Petition  on  14.09.2005.  10. It  appears  that  the  said  writ  petition  continued to be pending before learned Single  Judge.  The  same  matter  again  came  up  for  hearing before another learned Single Judge on  13.02.2007. On the said date learned counsel  for Respondent Nos. 1 to 3 submitted that the  rent of the shops is too meagre looking to the

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present  rent  available  for  other  similarly  situated shops,so a prayer was made that it be  increased reasonably according to market rate.  On  this  offer  being  made,  learned  counsel  appearing for the Appellants submitted that the  case for enhancement of rent may be considered  by  the  court  according  to  the  condition,  location  and  situation  etc.  of  the  tenanted  shops. It was further submitted by the learned  counsel  for  the  Appellants  that  in  case  Appellants are evicted from the disputed shops  then  they  would  suffer  irreparable  loss  and  injury. Lastly, it was contended by them that  even though many accommodations are available  nearby but none would be available at the rent,  which is being paid presently by Appellants to  landlords. 11. In  the  light  of  aforesaid  offer  having  been  made  by  the  Respondents  and  duly

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considered  by  the  Appellants,  the  learned  Single Judge thought it fit to enhance the rate  of rent from Rs. 600/- per month for both the  shops to Rs. 2100/- per month, payable from  February 2007. 12. Even though, the Appellants' writ petition  was kept pending and directed to be listed in  the  month  of  July,  2007  for  reporting  compliance  of  the  aforesaid  directions,  the  Appellants  feeling  aggrieved  thereof  have  preferred this appeal on variety of grounds. 13. We have accordingly heard Mr. Dinesh Kumar  Garg for the Appellants and Mrs. Rachna Gupta  and Mr. R.C. Kaushik for the Respondents and  perused the record. 14. The  first  thrust  of  the  arguments  of  learned counsel for Appellant was that the rent  having been enhanced to Rs. 600/- per month  only on 14.09.2005, no case was made out for

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further enhancement from Rs. 600/- to Rs.  2100/- per month vide the impugned order dated  13.02.2007, within two years thereof. It was  then submitted that this Court has deprecated  severely the practice of enhancement of rent in  petitions filed under Articles 226/227 of the  Constitution of India, during the pendency of  those petitions on merits in the High Court,  that  too  without  any  valuation  report.  To  advance  contention  in  this  regard,  several  unreported  orders  of  this  Court  have  been  placed before us. They are judgment and order  dated 19.01.2009 passed in Civil Appeal No. 316  of 2009 titled Md. Iqbal Vs. Atma Ram & Ors.;  order dated 03.01.2008 passed in Civil Appeal  No. 14 of 2008 titled Md. Safi (D) Th. his LRs.  & Ors. Vs. Sri Farhat Ali Khan and order dated  20.10.2008 passed in Civil Appeal No. 6171 of  2008 titled Sadan Gopal Gautam Vs. Sushila Devi

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& Ors.

15. Critical  scrutiny  of  the  aforesaid  judgments/  orders  would  show  that  in  these  cases neither there was any offer made by the  landlord  nor  any  corresponding  acceptance  by  the tenant, still the High Courts, in each of  these cases, had enhanced the rates of rent  unilaterally. But in the case in hand it is  clearly  reflected  that  Respondents-landlords  made an offer to the Appellants/tenants which  they  agreed,  only  thereafter  the  rent  was  enhanced from Rs. 600/- per month to Rs. 2100/-  per month, for both the shops. Thus, the ratio  of  the  aforesaid  judgments  cited  by  learned  counsel for Appellants has no application to  the facts of the present case. 16. On  the  other  hand  learned  counsel  appearing for Respondents strenuously contended  that building known as Jaitpur house, with the

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passage of time has come within the market area  of Saharanpur and can therefore be called as  falling within the meaning of commercial area.  It was also contended that looking to various  factors such as the nature of construction, its  prime location in the city,  being situated on  the  main  highway,  and  thus  having  easy  accessibility to it and the availability of all  other amenities and facilities etc. even the  rent fixed by learned Single Judge at the rate  of Rs. 2100/- per month for both the shops is  on the lower side and too meagre. According to  her, the total area under occupation of the  Appellants would be 240 sq. ft. and with the  rent fixed at Rs.2100/-, the rent would come to  Rs.87.50 per sq. ft. This according to her is  too low,  keeping in mind the present trend and  the prevalent market rate of rent. She thus  submitted that no case for interference is made

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out and the appeal being devoid of merit and  substance deserves to be dismissed.  17. Thus,  looking  to  the  matter  from  all  angles we are of the considered opinion that  the  rent  as  has  been  fixed  by  the  learned  Single Judge for the two shops having total  area 240 sq. ft. to Rs. 2100/- per month is not  only reasonable but would be just and proper.  Any enhancement in rent will not ipso facto be  deemed  to  be  unreasonable  and  exorbitant,  unless  the  party  aggrieved  is  able  to  give  cogent reasons for the same.  In this context,  we  may  profitably  refer  to  the  judgment  pronounced by this Court, reported in (2005)1  SCC 705 titled Atma Ram Properties (P) Ltd. Vs.  Federal Motors Pvt. Ltd. The relevant portion  thereof is reproduced hereinbelow:-

“In the case at hand, it has to be  borne in mind that the tenant has been  paying Rs. 371.90/- rent of the premises

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since 1944. The value of real estate and  rent rates have skyrocketed since that  day. The premises are situated in the  prime commercial locality in the heart  of  Delhi,  the  capital  city.  It  was  pointed  out  to  the  High  Court  that  adjoining premises belonging to the same  landlord admeasuring 2000 sq. ft. have  been  recently  let  out  on  rent  at  the  rate of Rs. 3,50,000/- per month. The  Rent  Control  Tribunal  was  right  in  putting the tenant on terms of payment  of    Rs. 15,000/- per month charges for  use and occupation during the pendency  of appeal. The tribunal took extra care  to see that the amount was retained in  deposit  with  it  until  the  appeal  was  decided so that the amount in deposit  could  be  disbursed  by  the  appellate  Court  consistently  with  the  opinion  formed by it at the end of the appeal.  No fault can be found with the approach  adopted by the Tribunal. The High Court  has interfered with the impugned order  of  the  Tribunal  on  a  erroneous  assumption  that  any  direction  for  payment by the tenant to the landlord of  any  amount  at  any  rate  above  the  contractual rate of rent could not have  been  made.  We  cannot  countenance  the  view  taken  by  the  High  Court.  We  may  place on record that it has not been the  case of the tenant-respondent before us,  nor was it in the High Court, that the  amount of Rs. 15,000/- assessed by the  Rent Control Tribunal was unreasonable  or grossly on the higher side”.

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In  fact,  learned  Single  Judge  has  also  taken note of the aforesaid judgment of this  Court  and  only  thereafter,  the  rental  was  worked out from Rs. 600/- per month for two  shops to Rs. 2100/- per month. 18. No doubt, it is true that learned Single  Judge has applied his own yardstick in working  out  the  rent  but  only  after  both  parties'  contentions  were  taken  into  account  and  the  said yardstick appears to be absolutely correct  and perfect method of working out the present  market rental of the premises. 19. Even though, the report of the valuation  was not taken into consideration as there was  none but the assessment and judgment of the  learned Single Judge cannot be disallowed, even  though detailed reasons have not been assigned  by the learned Single Judge for enhancing the

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rate of rent because the ultimate conclusion  arrived  at  by  him  does  not  suffer  from  any  infirmity, illegality or perversity. 20. Thus in our considered opinion, the appeal  from  such  an  interim  order  of  the  learned  Single  Judge,   being  devoid  of  merit  and  substance  deserves  to  be  dismissed.   We  accordingly do so. 21. According to our considered view majority  of these cases are filed because landlords do  not get reasonable rent akin to market rent,  then on one ground or the other litigation is  initiated. So before saying omega, we deem it  our duty and obligation to fix some guidelines  and norms for such type of litigation, so as to  minimise  landlord-tenant  litigation  at  all  levels. These are as follows:-

(i) The tenant must enhance the rent  according to the terms of the agreement or

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at least by ten percent, after every three  years  and  enhanced  rent  should  then  be  made payable to the landlord. If the rent  is too low (in comparison to market rent),  having been fixed almost 20 to 25 years  back then the present market rate should  be  worked  out  either  on  the  basis  of  valuation report or reliable estimates of  building rentals in the surrounding areas,  let out on rent recently.  (ii) Apart  from  the  rental,  property  tax,  water  tax,  maintenance  charges,  electricity  charges  for  the  actual  consumption of the tenanted premises and  for common area shall be payable by the  tenant only so that the landlord gets the  actual rent out of which nothing would be  deductible. In case there is enhancement  in property tax, water tax or maintenance

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charges, electricity charges then the same  shall also be borne by the tenant only. (iii) The  usual  maintenance  of  the  premises,  except  major  repairs  would  be  carried  out  by  the  tenant  only  and  the  same  would  not  be  reimbursable  by  the  landlord. (iv)But if any major repairs are required  

to be carried out then in that case only  after  obtaining  permission  from  the  landlord in writing, the same shall be  carried out and modalities with regard  to  adjustment  of  the  amount  spent  thereon,  would  have  to  be  worked  out  between the parties.

(v) If  present  and  prevalent  market  rent  assessed  and  fixed  between  the  parties  is  paid  by  the  tenant  then  landlord  shall  not  be  entitled  to  bring

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any action for his eviction against such a  tenant at least for a period of 5 years.  Thus for a period of 5 years the tenant  shall  enjoy  immunity  from  being  evicted  from the premises. (vi) The parties shall be at liberty to  get  the  rental  fixed  by  the  official  valuer  or  by  any  other  agency,  having  expertise in the matter. (vii) The rent so fixed should be just,  proper  and  adequate,  keeping  in  mind,  location,  type  of  construction,  accessibility with the main road, parking  space  facilities  available  therein  etc.  Care ought to be taken that it does not  end up being a bonanza for the landlord.

22. These  are  some  of  the  illustrative  guidelines and norms but not exhaustive, which

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can be worked out between landlord and tenant  so as to avoid unnecessary litigation in Court.  23. As  mentioned  hereinabove,  the  aforesaid  appeal is dismissed with costs throughout. 24. Counsels' fee Rs. 10,000/-.

................... ..J.

[DALVEER BHANDARI]

.................. ..J.                  

[DEEPAK VERMA] New Delhi May 13, 2011