RAJA BAHADUR MOTILAL BOMBAY MILLS LTD. AND ANOTHER. versus M/S. GOVIND RAM BROTHERS (P) LTD., AND ANOTHER

Citation: [1974] 3 S.C.R. 577 · Decided: 12-03-1974 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed

Judgment (excerpt)

B 
c 
0 
F 
G 
H 
577 
RAJA BAHADUR MOTILAL BOMBAY MILLS LTD. 
AND ANOTHER 
v. 
M/S. GOVIND RAM BROTHERS (P) LTD., AND 
ANOTHER. 
March 12, 1974. 
[V. R. KRISHNA IYER AND R. S. SARKARIA, JJ.] 
Bombay Rent Hotel mul Lodging House Ratts Control A.ct (57of1947), s. 11 (I) 
(c) -Applicability of principle of apportionment. 
On September l, ·19"40, the basic date under the Bombay Rents, Hotel and Lodg-
ing House Rates Control Act, 1947, the properties in dispute were parts of a larger 
entity comprised in a single lease. In March 1948, the respondent took a fresh lease 
of the properties in dispute, Thereafter, the respondent filed applications in the court 
of Small Causes for fixation of standard rent on the ·basis of apportionment. The 
trial court dismissed the applications holding that the premises, on account of 
structural alterations, had undergone such a change that they could no longer be 
identified with the property that existed in Septermber 1940;.that the mode of deter~ 
mining the rent 
by 
apportionment 
was 
not avai1ab1e to tl:e tenant; 
and 
that 
there 
was 
no 
sufficient 
material 
for 
asc:ertainina 
the 
standard rent in any other way. This order was set aside in revision and the 
case was remanded to the trial court. After remand, the trial court held that except 
with respect to three items of the premises in dispute, which were new structures, 
there was no change of identity in the rest of the properties; that the new structures 
beJonged to the respondent who was consequently liabJe to pay rent only for the land 
underneath; and on that basis, applying the principle of apportionement, fixed the 
standard rent. With respect to one item the trial court took into consideration the 
investment made by the landlord inclusive of the cost of structures, estimated the 
value of the land underneath as in 1940, and fixed the standard rent on that basis. 
In revision it was held that the ownership of the three new structures also vested in 
the appellant, that he was entitled to get a fair return on that investment also and that 
the value of the land should be taken as in 1948 and not in 1940, and the standard 
rent was fixed on that basis. Further revisions to the High Court were dismissed with 
some arithmetical corrections. 
In appeal to this Court, 
HELD : The principle of apportionment is applicable to the fixation of standard 
rent of the premises in dispute and the principle had been rightly invoked and 
applied. [584 F-0] 
. 
(a) One of the primary objects of the Act is to curb exaction of extortionate 
rent. Section 11(1) empowers the Court to fix the standard rent at such amount, as 
having regard to the provisions of the Act and the circumstances of the case, the Court 
deems just, If on the basic date the premises were not let out separately but were a 
part of the subject matter of a larger demise then s. I l(l)(c) comes into operation. 
If the standard rent of a whole was a specific amount it stands to reason that the 
standard rent of a part or sub-division of the whole should not ordinarily exceed 
that amount. Therefore, if in the circumstances of a given case the court feels that for 
securing the ends of justice and giving effect to the provisions and policy or the Act 
it is reasonably necessary and feasible to work out the standard rent by apportion-
ment, it can legitimately do so. The language of the Act consistently with its scheme 
and inbuilt policy is elastic enough to permit the fixation of standard rent on appor-
tionment basis. At the same time, caution and circumspection are necessary in apply-
ing the principle to the particular circumstances of a case. For example, if after the 
material date, the landlord has made investments and improvements in the premises 
it will be just and reasonable to take that factor also into account and give him a 
fair return on such investment. Similarly, in apportioning the rent, the Court must 
also consider other relevant circumstances and advantages enjoyed by the tenant 
-0f the·premises of which the standard rent' is in question as compared with the rest 
'"· 
578 
SUPREME COURT REPORTS 
[ 1974 J 3 S.C.R. 
of the property in which ~tis comprised. Fu.rt her, where after the basic date the pre-
A 
mises completely changed their identity, apportionment as a method of determining 
just standard rent loses its efficacy and may be abandoned altogether.[583E-585Cj 
NcrC!)'an~c.l Bansila/ v. Venkatrao Anant Rai 61 Born. L.R. 352, Bainbridge v

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