LexV.S. KANODIA ETC. ETC. versus A.L.MUTHU (D) THR. LRS. & ANR
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A B [2012) 6 S.C.R. 570 V.S. KANODIA ETC.· ETC. V. A.L.MUTHU (D) THR. LRS. & ANR. (Civil Appeal Nos. 5218-22 of 2012) JULY 16, 2012 [G.S. SINGHVI AND SUDHANSU JYOTI MUKHOPADHAYA, JJ.] TAMIL NADU BUILDINGS LEASE AND RENT C (CONTROL) ACT, 1960: ss. 4(2) to 4(4) - Fixing of monthly rent - Non-residential premises - Held: In view of sub-ss.(2) to (4) of s.4, the market value of the site on which the building )s constructed is an 0 imporlant factor to be taken into consideration for fixing the fair rent of the building - In the cases in hand, it was not open to the appellate authority to ignore the market value of the adjacent land already determined by the Rent Controller, on the ground of pendency of an appeal - The matter is remitted E to the appellate authority for determination of limited issue relating to the market value of the land on which the building premises are situated, taking into consideration the evidence on record including Exh.A-4, Exh.A-9 and the market value of the adjacent land as was determined by the Rent Controller - The findings of the appellate authority with respect to F 'classification of building', 'depreciation', 'plinth area', 'construction charges' and of basic amenities of the petition building as affirmed by the High Courl are upheld. The respondents-landlords owned three non- G residential properties. In respect of the 1st property, for the purpose of fixing the monthly rent, the Rent Controller determined the valuation @ Rs.25 lakhs per ground. Appeals thereagainst remained pending. In respect of H 570 V.S. KANODIA ETC. ETC. v. A.L.MUTHU (D) THR. 571 LRS. 2nd and 3rd properties, the Rent Controller fixed the rent A after taking into consideration the market value of the land @ Rs.50 lakhs per ground. The appellate authority fixed the rent on the basis of valuation of the land @ Rs.65 lakhs per ground. The High Court dismissed the ~evision petitions of the tenants. B In the instant appeals, it was contended for the appellants-tenants that the valuation of land as was determined in respect of 1st property @ Rs.25/- lakhs per ground should have been taken into consideration for determination of the fair rent. C Allowing the appeals in part, the Court HELD: 1.1 From the principles set out in sub-ss. (2) to (4) of s.4 of the Tamil Nadu Buildings Lease and Rent 0 (Control) Act, 1960, it is apparent that market value of the site on which the building is constructed is an important factor to be taken into consideration for fixing the fair rent of the building. [para 14] [579-D] 1.2 The two rented premises, which are the subject E matter of the instant appeals, are situated in the building adjacent to the 1st property, in respect of which the Rent Controller (small Causes Court) determined the market fair rent on accepting the market value of the. land at Rs.25 lakhs per ground. Against the said judgment, F appeals have been preferred by both the appellant- tenants and the respondents-landlords but no order of stay has been passed by the appellate authority and the matter is still pending. The mere fact that the appeals filed by the appellants and the respondents remain pending G for disposal for more than 8 years and during the pendency the respondents-landlords filed two petitions u/s 4 of the Tamil Nadu Buildings Lease and Rent (Control) Act, 1960, before the Rent Controller, cannot be made a H 572 SUPREME COURT REPORTS [2012] 6 S.C.R. A ground to deprive the appellants-tenants of their legitimate right to rely on a market value of adjacent land already determined by the Rent Controller. Even if the appeals are dismissed by the appellate authority, the market value of the adjacent land as determined will B remain Rs. 25 lakhs per ground. In the cases in hand, it was not open to the appellate authority to ignore the market value of the adjacent land already determined on the ground of pendency of an appeal. The High Court failed to appreciate this fact though it was a fit case for c interference under Art. 227 of the Constitution of India. [para 15] [579-E-H; 580-A-C] 1.3 The impugned judgments of the appellate authority dated 14.10.2006 as affirmed by the High Court, to the extent they relate to "market value of the land", are D set aside. The appeals are remitted to the appellate authority for determination of limited issue relating to the market value of the land on which the building premises ar
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