LexK. C. NAMBIAR versus THE IV JUDGE OF THE COURT OF SMALL CAUSES, MADRAS & ORS.
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K. C. NAMBIAR
v.
THE IV JUDGE OF THE COURT OF SMALL CAUSFS,
MADRAS & ORS.
August 18, 1969
[J.C. SllAll, ACTISG C.J., \'. RA~IAS\\'AMI AND A. N. GROVER, JJ.]
M11dr11s Ruildmgs (lease & Rent Cv11tro/) Act, 1960, s. 4(3)(b)(i)
(ii)-''Cost of cons1n1c11011' if orig11u1/ cost or autrket \'alue at the date
of enac/lnent of the Act.
By '· 4 of the MaJras Buildings (Lea-;e & Rent Co11trol) Act, 1960
A
B
the fair rent for any non-residential building is to be fixed on the total
C
cost of such building and uo<ler sub-s. 3(b) the total cost is to consist of
three componcnls : ( i) the cost of con~truction ai; calculated "according
to such rates tor such classes of non-residential building as may be pre.i;-
cribed, le~s depreciation
at 'Such rate~ ac; may be prescribed"; (ii)
tb.e
market v::i.luc uf th:it portion of the site or \1hich
the
non-residential
buiJding is con'itructed, and (iii) .such allowances not 1.:xcccding 25% of
the cost of constructiC'n as may be made for locality features of arcbitec¥
tural intcre-;t. acce~sibilitv 1(1 nlarket,
nc;1rnco;;s ro a raihvav station and
D
other amenities i!~ m;!y -be prescribeJ.
The State Govcrriment
framed
rules prc;cribing rates for the calculation of the cost Of construction of
different classes of non-residential buildingo;;.
The appellant, a lenant of a non-residential
building
applied to the
High Court of Madras for a y,.·rit of prohih11ion
against
the Controller
reslraining him from pro..:ccding \\'ith an application for fixation c:Ji fair
rent.
He contended lh<it
the cxpre ... -sion
.. co<;t
of
construction"
in
E
s. 4(3)(h)(i) meant the cost of the original
constn1c1l'on
and not the
market value of the structure at the date of enactment of the Act
and
therefore :he rules \i..-ere incon.,istcnt \Vith the intention and ?.mbit of the
Act : 111c Hir.h Cou•. t di:-n1is!-:ed the app!ic;!tion.
Allowing the appeal,
llELO: 'The C'<pression "co.:;t of con-.1rue1ion" in suh-s. 3(h) (i) when
used in juxtap0<;ition \\'ith the cxprcs-;i(1n "market \':tlue" in suh-s. J(b)(ii)
is used to denote not the n1arkct VJ!UC• hut the cost of the original cons-
1''
truction.
·rhe Legi·daturc could not have used l\\'O different exprCMionc;
for provirlTng that the market \'aluc of the building and the market nlue
of lhe site sh;dl form con1poncnrs of the total co:il of a building:.
If the
~xpres5ion "co~t
of const:-uction" j.:; equated
\Vith
the market value it
v.-ould necessarily ir.clude thi.' spl'Cial ;idv~ntagc'\ of the situation
of the
huildinl!, its amenilie'\ :ind ~rchitectural feature'\ and there i" no reason
v.-hy these allo,\·ancc'\ should hl' included f\\-·icc. 0:1c1 .. "" part of compo-
nent (i) and ;ig:ain <l'• pan of con1roncn1. (iii).
1\~ain, if the meanint of
G
the c'rrc~sion "cCK! of Ct)nsrr11c:ion" \VC:-c "market \';1]11~·· it \vould me~n
the market \';i_lue having: n .. ~ard to rhe market c0ndi1ions of rC'al propertv
''hich m.1v go on ch:inging yeJr after Yl':-tr.
Rut the .State h;id accept<.'d
hy r. 12 that the co-;t of con..rruction V.'<h ;i fixed qu;intity rclat~d to the
d;tte on \\hich the Ac! "'a' hrought in:c force. [912 n-C. G-11]
CIVIL APPEi.ATE JuRISDICT.ON:
Civil Appeal No. 2225 of
1966.
H
Appeal from the jud!!ment and order dated August 6, 1965 of
the Madras Hi~h Court in Writ Appeal No. 356 c{ 1964.
I.
'
t
K, C. NAMBIAR v. JUDGE, SMALL CAUSES COURT (Shah, Ilg. C.f)
907
A
B
c
D
E
F
G
H
K. K. Venugopal and R. Gopalakrishnan, for the appellant.
Lily Thomas, for respondent No. 3.
S. Govind Swaminathan, Advocate-General for the State of
Tamil Nadu, E. S. Govindan and A. V. Rangam, for respondent
No. 8.
The Judgment of the Court was delivered by
Shah, Ag. C.J. The Legislature of the State of Madras enacted
the Madras Buildings (Lease and Rent Control) Act,
1960.
Section 4 of the Act (insofar as it is relevant) provides :-
"(l) The Controller shall, on application by the
tenant or the landlord of a building and after holding
such inquiry as the Controller thinks fit fix the fair
rent for such building in accordance with the principles
set out in sub-section (2) or in sub-section (3), as the
case may be, and such other principles as
may be
prescribed.
(2)
(3)(a) The fair rent for any non-residential building
shall be at nine per cent, gross return per
annum on the total cost of such building.
(b) The total cost referred in clause (a)
shall
consist of-
(i) the cExcerpt shown. Read the full judgment & AI analysis in Lexace.