ISHWAR SWAROOP SHARMA versus JAGMOHAN LAL

Citation: [2000] SUPP. 5 S.C.R. 51 · Decided: 24-11-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed

Judgment (excerpt)

ISHWAR SWAROOP SHARMA 
v. 
JAGMOHAN LAL 
NOVEMBER 24, 2000 
[S. RAJENDRA BABU AND RUMA PAL, JJ.] 
Rent Control and Eviction 
Haryana Urban (Control of Rent and Eviction) Act, 1973-Section 
2(h) and 4-Fixation of fair rent-Rent Controller ftxing fair rent of shop 
based on market rate-Appellate authority reftxing the fair rent on the basis 
A 
B 
c 
of percentage increase on agreed rent-Decision of appellate authority 
affirmed by High Court-Held, since there is a prior agreement for rent, the 
agreed rent is the basic rent and landlord entitled only to percentage D 
increase and not market rent. 
Words and Phrases-'agreed rent'-Meaning of 
The Appellant filed an application under Section 4 of the Haryana Urban 
(Control of Rent and Eviction) Act 1973, before the Rent Controller, Haryana E 
for fixation of fair rent of his shop. The Rent Controller considering the 
evidence of similar premises in the locality, determined the fair rent payable 
in respect of the shop at Rs. 1,000 per month. The Respondent preferred an 
appeal before the Appellate Authority. The Appellate Authority held that the 
Appellant having agreed to accept Rs. 200 from the Respondent, was not 
entitled to the market rent but to a percentage increase on the agreed rent. F 
The Appellate Authority calculated the percentage of increase under Sertion 
4(3) of the Act of 1973 and determined the fair rent of the shop to be R~. 328 
per month with effect from the date of the application. This decision was 
affirmed by the High Court on revision. 
In appeal to this Court the Appellant contended that the phrase 'rent 
agreed upon' in Sertion 4 (2) (b) does not cover monthly tenancies, that if 
that is the case then no landlord would ever be in a position to avail of the 
benefit of the later part of Section 4(2) (b), namely, the determination of basic 
rent prevalent in the locality for similar buildings, that since the tenancy in 
51 
G 
H 
52 
SUPREME COURT REPORTS [2000) SUPP. 5 S.C.R. 
A question was a monthly tenancy, the agreement regarding rent came to an 
end with each month, and that when the application was made there was no 
'agreed rent' within the meaning of Section 4 (2) (b). 
The Respondent contended that the shop had initially been let out to the 
Respondent at a monthly rent of Rs. SO, which was increased to Rs. 200 in 
B 1976 and an endorsement was made by the tenant on the back of the rent 
receipt, that after having mutually increased the rent from 1.1.76 the landlord 
was bound to accept and had continued to accept the sum of Rs. 200 and that 
this was the rent agreed upon within the meaning of Section 4(2) (b) and this 
was the rent paid by the Respondent upto the date when the application under 
C Section 4 was made. 
Dismissing the Appeal, the Court 
HELD : 1. By using the words 'agreed rent' the Legislature intended to 
indicate that the word 'rent' must be construed in a wider sense to include, 
apart from the narrow connotation, any payment made for use of land where 
D the quantum may have been fixed otherwise than by agreement. (55-DI 
2. There is no warrant for drawing any distinction between a monthly 
tenancy and tenancies for longer periods. Nor is it necessary that the 
agreement should have been entered into immediately preceding the date of 
E the application. Section 4(2) (b) uses the word 'proceeding' without any 
limitation. This may be contrasted with Section 3 where the word 'preceeding' 
is qualified by the word 'immediately'. [56-81 
3. Even though the agreement may have been entered into in 1976, since 
the tenancy was continuing until the date of the application, the Rent 
F Controller was obliged to take the rent agreed to in 1976 as the basic rent 
under the first limb of Section 4(2)(b). It is only after the fair rent is fixed 
that the landlord could seek re-fixation under the second limb subject to the 
limitations provided in the Act, as the rent would then cease to be the agreed 
rent. (56-DI 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6755 of2000. 
From the Judgment and Order dated 26.11.99 of the Punjab and Haryana 
High Court in C.R.P. No. 5261of1998. 
Neeraj Kumar Jain, Anil Khetarpal and Ugra Shankar Pd. for the Appellant. 
H 
H.L. Narula and K.L. Metlla & Co. for the Respondent. 
L 
> 
l.S. SHARMA v. JAGMOHAN LAL [RUMA PAL. .I.) 
53 
The Judgment of the Court was delivered by 
A 
RUMA PAL, J. Leave granted. 
This appeal has been preferred from the decision of the High Court of 
Punjab and H

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