Fruit & Vege· v. AUGUSTIN

the premises were outside the scope of the Act; that there had been a great increase in the cost of main tenance, as also of repairs and replacements of electric and other installations, that there had been a consider able enhancement of the charge for electricity supplied the Calcutta Electric Supply Corporation Ltd. and of Government duty on the same; that if the court held that these premises were governed by the 1 provi sions of the Act, the landlord was entitled to proportion inc; ease in respect of those charges; that the fact the Act does not make specific provision the charges increasing rent with aforesaid would also point to the conclusion Act was not intended to be applied to the tenancies in question. The Rent Controller after having inspec tions made of the premises in question fixed a standard Schedule A to the Act. The rent thus standardized· was to t.ake effect from September 1, 1950. The appellant preferred an appeal the Chief Judge of the Small Cause Court; Calcutta, against the aforesaid order of the Rent Controller. The Appellate Authority allowed the standard rent at a higher figure than that arrived at by Rent Controller by applying the provisions of cl. (g) of s. 9. The Appellate Authority aforesaid negatived landlord's contention in question ·providing the special services and amenities aforesaid were outside the ambit of the Act. It gave the landlord relief in respect of the higher charges for electric con sumption aforesaid. The· standard rent thus fixed by the appellate authority was in excess of the original parties. The tenant in each case moved the High Court of Calcutta in its revisional jurisdiction. The learned single Judge of the High Court who heard the revisional applications allowed in part, giving effect vir tually, though not entirely, to the decision of the Rent Controller and holding that cl. (g) of s. 9 of the Act was not attracted cases before the court. He relied upon a Division Bench ruling of the same Court in the case of Residence to the facts and circumstances of landlord's appeal in part by sc;.tting rent agreed between and Government the premises ;, - 1956 Karnani Properties Ltd. v. Augustin Sinha]. 24 SUPREME COURT REPORTS [1957J appellant's Ltd. v. Surendra Mohan(•), which, it is agreed at the Bar, is on all fours with the fa<;ts and circumstances of the present case. After the rejection by the High Court of Art. 133 of the Constitution, the appellant obtained from this Court special leave to appeal on common questions of law. Hence the appeals in each of these three cases have been heard together. certificate petition a In terms of the these appeals learned Solicitor General appearing on behalf of the appellant . raised substan tially two points for determination, namely, (!) that the Act does not apply to the premises in question in view of the special incidents of the tenancy as dl~dosed in the the standard form as .exhibited in Civil Appeal No. 42 of 1955 Exhibit J) between the appellant and Miss M. Augustin, and as found by the courts of fact below; and (2) alterna tively, that if the Court were to come to the conclusion that the premises in question were within the ambit of (g) of s. 9 should be applied to the the Act, clause tenancies in question as determined by the appellate authority aforesaid. Adverting to the first point raised on behalf of the appellant, we have to notice an argument which was raised for the first time before us, namely, definition of "premises" in s. 2(8) would not in terms if any apply to the tenements in question and provisions of the Act could be attracted to these cases, cl. (3) of s. 2 defining "hotel or lodging house" could more appropriately be applied question. As this point this form has not been raised in the courts below or even in the statement of the case in this Court, we refuse to go into that question, even assuming thus raised does not require any fresh findings of fact. These cases have not been fought on that ground and, in our opinion, is too late to raise for the first time a controversy that form. We have therefore to examine the question whether the definition of "premises" _as contained is not comprehensive enough to be s. 2(8) of the Act (1) A.I.R. 1951 Cal. 126. that the controversy tenancies . ·- 1956 K'arnani Pro pert~s Ltd. .., Augustin Sinha]. S.C.R. SUPREME COURT REPORTS 25 applicable to these cases. The definition terms:- is m these " 'premises' means any building or part of a build ing or any hut or part of a hut let separately and includes- ( a) the gardens, grounds and out-houses (if any) appertaining to such building or part of a building or hut or part of a hut, (b) any furniture supplied or any fittings affixed the landlord for use of the tenant in such building or part of a building or hut or part of a hut, but does not include a room or part of a room or other accom modation in a hotel or lodging house or a stall in a municipal market as defined in clause ( 44) of s. 3 of the Calcutta Municipal Act, 1923, or in any other market maintained by or belonging to a local authority or a stall let at variable rents at different seasons of the year for the retail sale of goods in any other market as defined in clause (39) of s. 3 of the Calcutta Municipal Act, 1923, or clause (30) of s. 3 of the Bengal Municipal Act, 1932". -' . tenants. In the previous to be supplied It has been contended the appellant include thus defined do not "premises" tenements with the special facilities and conveniences agreed by the landlord the definition of connection reference was made legislation "premises" as contained like the Calcutta Rent Act (Bengal Act III), 1920, Calcutta House Rent Control Order, 1943, the Calcutta Rent Ordinance (No. V), 1946 and the West Bengal (Temporary Provisions) Act, Premises Rent Control XXXVIU of 1948, which has been replaced by Act. to_ go into the the different pieces ramifications of the definitions in of legislation which ~eal with the same subject matter. We have to construe the Act as it stood. The Act has now been the West Bengal Premises Tenancy Act (Act XII), 1956. But it is agreed at the Bar· that we are concerned with the Act as it stood before it was replaced by the Act of 1956. The definition of "premises" set out above It will serve no useful purpose is in very wide replaced by 1956 Kamani Prrr pmus Lui. v. Augustin Sinha]. 26 SUPREME COURT REPORTS [1957] supplied by and includes not only gardens, grounds and outhouses, if any, appertaining to a building or part of a building, but also furniture tenants' use and any fittings affixed the building,. thus indicating that the legislature was providing .all kinds of letting. The definition of "premises'' and "hotel or lodging house" between them almost exhaust the whole field covered by the relationship of landlord tenant, subject .definition of "premises." landlord for the exceptions noted It is admitted at that the tenancies m question are regulated by terms and conditions .appearing in Exhibit J, the most important of which is clause ( 1) in the following terms :- the Bar "That the tenant shall occupy the said flat paying the Bank a monthly rent of Rs. 100 therefor unto including hire of 2 A.C. fans and extra Government reduction or duty on electric current without any abatement to be paid at the Bank on or before 7th of succeeding month for which the rent is due and that the said rent is inclusive of charges for current for fans, lights, radio and electric stove not exceeding 600 Watts for heating meals and making tea only, use lift, hot and cold water, the owner and occupier's shares of Municipal Taxes." stove. tenancy It is clear from the terms of the clause quoted above that the land!Ord was to place at the disposal of the tenants ·not only electric installation including fans but also electric current to be consumed in the use of those installations etc., besides radio and electric It comprised not only was argued fixtures but buildings and structures and permanent the supply of electric . power without any fresh charge for the same. s. 9 dealing with fixation of standard rent did not in terms ~ontemplate the enhancement or reduction of rent according ,a.s for electric current and Government duty thereon were enhanced or reduced. It is true that none of the els. (a) to ( f) of s. 9 has any reference to these considerations. Clause (b) makes a specific reference only to increase in municipal taxes, It was also pointed out the rates -.. 1956 K an11mi Pro ~erties Ltd. _y. ~llluslin Sinha]. S.C.R. SUPREME COURT REPORTS 27 itself to the control of legislature was conscious like electric power the case the Act. The Act It has defined "premises" the residuary cl. (g) rates or cesses. But then there is the question whether that clause applies to present cases will have to be discussed separately when the second point in controversy will be taken up for It is enough to point out at this stage consideration. that contingencies may arise which would not be covered by any of the the operative specific els. (a) to ( f) of s. 9 which section in the Act relating to fixation of standard rent. this : Under this head the question reduces whether, if by a stipulation between the landlord and the tenant the landlord agrees to provide for additional for consumption and amenities taken out of the such other facilities, operation of intended "to rents of make better provision premises." in very wide terms, as pointed out above. Hence it is difficult, if not impossible, to accept the contention that the legislature intended the provisions of the Act to have a limited application depending upon the terms which an astute In landlord may be able to im!1me upon his tenants. to the provisions of order fully statute, the court has to give them the widest appli cation possible within the terms of the statute. Having those considerations in view. we do not think that the supply of the amenities aforesaid would make difference to the application of the Act to the premises In this connection reference may be made in question. to the decision of the Court of Appeal in the case of Property Holding Co. Ltd. v. Clark( 1 ) and the case of Alliance Property Co. Ltd. v. Shaffer(•) which followed the earlier decision to the effect that if the stipulations landlord and tenant include payment of rent between for not only what may- properly be characterized :u premises within the ordinary acceptation of the term but also payment in respect of lighting, cooking equip ment, the furnishing and cleaning of haH and st~\ircasc total of and certain other similar amenities, the sum the payments in respect of the building or part of the building and other services and amenities constitute to give effect _ (1) [1948) '1 K.B. 630. (2) [1!)48) 2 K.B. 464. ) 1956 Karnani Properties Ltd. ''" Augustin Sinha]. 28 SUPREME COURT REPORTS [1957] In tenant landlord and the additional amenities and rent. the earlier case of Property Holding Co. Ltd. v. Clark (supra) the facts, shortly stated, were that the agreement between the . payment of £110 a year as writing provided for rent and an additional payment of £30 a year in respect lighting and. cooking equipments, furnishing and clean In an action for rent by ing of hall and staircase etc. the landlord at tenant contended that the rent proper was only £110 and not the total sum of £140 a year payable on all counts, as aforesaid. The Court of Appeal allowed the landlord's appeal and held. that the standard rent was £140 and In the course of his judgment Asquith L.J. not only £110. adopted the language of Younger L. J. in the case of Wilkes v. Goodwin( 1 ) to the following effect:- the rate of £140 a year conveniences "The first of these ( consideratiops) is that the word 'rent' in this exception surely means not rent in instru strict sense but the total payment under the 'rrnt' so ment of letting. The exception assumes tha· called may 'board', payment of include, for example, which is not rent. I · am here paraphrasing the statement -of Shearman J. in Nye v. Davis(') with which I agree." Their Lordships of t11e Court of Appeal repelled the .contention that the additional payment was not part -of rent and held that the payment in respect of the additional amenities aforesaid was also part of within the meaning of the English Act which corres ponds to the Bengal Act. Those English decisions are authorities for the proposition that "rent" included not -0nly what is ordinarily described as rent in an agree ment between a landlord and a tenant but also payment in respect of. special amenities provided by the landlord under the agreement between him and his tenant. The term "rent" has not been defined in the Act. Hence its ordinary it must be taken to have been used If, as already indicated, the term dictionary meaning. "rent" is comprehensive enough incltllle all pay ments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and (1) (1923] • K.B. rn5. (•) [•922] • K.B. 56. ' - -S.C.R. SUPREME COURT REPORTS 29 its appurtenances but also of furnishings, electric stallations and other amenities agreed between parties to be provided by and at the cost of the land lord, the conclusion is irresistible that all that is includ ed in the term "rent" is within the purview of the Act and the Rent Controller and other authorities had the power to control the same. In view of these considera tions we overrule the first contention raised on behalf of the appellant. 1956 Kamani Pro pertks IJll. "· Augustin Sinha ]. But the second contention raised on behalf of the appellant, in our opinion, is well founded. "Standard Tent" has been defined in cl. ·(10) of s. 2 as follows:- any premises "'standard relation rent' means- ( a) the standard rent determined in accordance with the provisions of Schedule A; (b) where the rent has been fixed under s. 9, the rent so fixed; or at which ilt would have been fixed if .application were made under the said section; .......... " This is a definition by incorporation of the· provisions of Schedule A and of s. 9. It is common ground that no standard rent had so far been determined in respect of the premises in question before the present proceed ings were commenced at the instance of the respective tenants. Schedule A to the Act in clause (1) defines "basic rent" and then cl. (2) lays down the formulae for determination of standard rent once has been arrived at. The tenant in each case in the the provisions of s. 9 read present appeals invoked with Schedule A of the Act for fixing the standard rent for their respective premises. The question arises which d~use or clauses apply to the terms of the tenancy as indicated above. Clause (a) cannot apply because it cannot be said that "There is no cause for the alteration of the rate of standard rent as determined according to the schedule for anv of the reasons mentioned in the following clauses, in a~cordance with the provisions of Schedule A." that electric It has not been denied charges and the Government duty thereon have been enhanced and that the municipal taxes also have been increased. Clause (b) also in terms cannot apply because the basic _. 1956 K "'11411i Pro /Jl'flils Lid. v. Sinha]. - 30 SUPREME COURT REPORTS [1957) it does not by itself entirely cover_ the cases in hand. There has been increase not only in municipal but also in electric charges, Gm·ernment duty on elec tric consumption and in the cost of the other services and amenities specially provided for by the agreement between the parties. Clause ( c) is out of the way of the parties because is no question of addition, alteration or imprm·ement in the premises. Clause ( d) is similarly that any furniture not already provided by lord has been supplied to any of the premises for use of the tenant. Clause ( e) also has not been claimed the special by either party circumstances contemplated these cases. Clause (f) is clearly inapplicable because the premises had been constructed admittedly much earlier than December 31, 1949. The only remaining clause is cl. (g) which is in these terms :- to be applicable because is nobody's therein are not found inapplicable because "Where no provisions of this Act for fixing stand- ard rent apply to any premises, by determining standard rent at a rate which is fair and reasonable." It will appear from the terms of the contract between landlord and the tenant in each case, particularly from clause ( 1) of the agreement quoted hereinbefore that the landlord has not only agreed to supply electric and other installations but also electric power and other services for which no separate payment has been stipu lated. It has not been denied-as a matter of fact, coun sel for tenants-respondents clearly admitted-that the rent fixed in each case included payment for those additional amenities and services, though the amounts in respect of them have been separately shown in the agreement. The rent fixea was a consolidated sum for all those amenities and services, as is clearly stated para. 1 of the agreement set out above. But even after making . that concession the learned . counsel for the respondents strongly relied upon the decision of a Division Bench of the Calcutta High Court given on Letters _Patent Appeal from a judgment of a single in Residence Ltd. v. Surendra Judge of that Court, Mohan('). It has been laid· down in that case that th'e (1) AJ.R, 1951 Cal. 126. -Earaaai Propmiu Lid. v. ..fu, rutia Sin/us]. S;C.R. SUPREME COURT REPORTS 31 Act is applicable to a tenancy the terms of: which included such additional conveniences _and facilities as have been provided by the landlord in these cases. W c have already indicated that we agree with that conclu sion. But the case also lays down the proposition that what is paid as rent for the flat does not include any payment for the additional facilities and convenienCC!I! provided by the landlord for the use of the tenant. In the High Court made the following this connection observations :- "In my judgment when a flat is let, with the land lord agreeing to provide certain free services, what let is th\! flat and what is paid is paid for the flat with the landlord providing certain amenities or performing rent for the flat certain obligation. What is paid is and no part of it can be truly regarded as payment for the services." With all due deference to the views thus expressed by that very experienced and learned Judge, we cannot that those observations correctly represent true legal position. As a matter of fact, the learned Judge has referred to with approval the judgments of the Ap~al Court and of the King's Bench :Pivision in the cases include not only ''rent" is comprehensive enough to rent in the narrower sense of the term as ordinarily understood but also payment in respect of the addi tional conveniences and amenities. The learned Judge goes on to make the following observations :- Jllentioned above to show that the "If he has undertaken obligations by the tenancy ~reement the monthly payment or the yearly pay ment as the case may be would be suitably adjusted. That, however, would not make the monthly or yearly payment any the less rent." The two parts of the observations quoted above can not be reconciled unless it can be said that the learned Judge is using the word "rent" not in the same sense but in its different connotations according to the con If the learned Judge used the word "rent" in text. its comprehensive sense in which the Act must be construed as having used that term, this part of the 3-75 S.C. India/59 Irarnani Pro· pmies Ltd. v. Augustin Sinha J. 32 SUPREME COURT REPORTS [1957] judgment cannot be said to be against the appellant's contention that the standard rent must be fixed with reference to all the constituents which made up lump sum as fixed in each case as rent. This position emerges not only from a consideration of the legal position in contemplation of the Act, but also from the terms of the agreement between the parties, as indi cated above. authorities the standard rent after The provisions of cl. (g) of s. 9 of the Act empower the other authorities under the Rent Controller and taking the Act to determine into consideration all the constituents which make up the total sum shown in the agreement as monthly rent. to determine Those are authorised In thus arriving at a fair which is fair and reasonable. and reasonable rent they are not pr; cluded from having . recourse to such of the provisions of the Act as may be found applicable either in their entirety or in so far as they can be made applicable. The Rent Controller gave the landlord credit only for the amount by which the municipal taxes had b~en increased and no more, by applying the provisions of cl. (b) of s. 9. The Appell the provi ate Authority on the other hand, applied. sio11s of cl. (g) of s. 9 by determining the fair and reasonable rent after taking into consideration the fact that electric charges as . also Government duty on increased. So consumption of electric power had been had the cost of providing for the other amenities and In view of our conclusion that the residuary services. cl. (g) applies to the terms of the tenancy in these cases, it follows that the decision of the Appellate Authority was more in consonance with the provisions of cl. (g) than that of the Rent Controller or of the High Court. As the figures arrived at by tne Appellate Authority have not been challenged before us, we would direct it should be restored and those of the High Court and of the Rent Controller set aside. the orders passed by The appeal is accordingly allowed in part as indi in view of the directions of _this cated above. But Court at the time of granting the special leave, even in this Court, he though the appellant is successful 1956 Karnani Ltd. ProfJtrties v. Augustin November 13 S.C.R. SUPREME COURT REPORTS 33 must pay the costs of the respondents, one .set of hear ing fee to be equally divided amongst th<! three pondents. Appeal allowed in part. - BARODA BOROUGH MUNICIPALITY v. ITS WORKMEN (BHAGWATI, VENKATARAMA AYYAR, s. K. DAS and GoVINDA MENON JJ.] Industrial Dispute-Bonus-One department of a municipality Jiaving surplus earnings-Whether workers engaged in that depart ment can claim bonus-Bombay Municipal Boroughs Act, 1925 (Bom. Act XVlll of 1925). the merger of the State made a gift of The Baroda Electric Supply Concern was owned and managed Immediately before by the State· of Baroda. State in the Province of Bombay, Concern to the Baroda Municipality to provide it with a new source of revenue as aid from the State might not be continued after the merger. Later in 1951, the workmen employed in the electricity the dispute was referred for <lepartment demanded bonus and adjudication. The bonus was claimed on the basis that the elec tric Concern was a commercial concern, that it was making huge profits and that the workmen were entitled to bonus as a share in inter alia, on the profits. The municipality resisted the demand, the grounds that the earnings of one department could not be treated as profits of the municipality, and that as a whole municipal budget for the relevant period was a deficit budget. Held, that the workers employed in the electricity department of the municipality were not entitled to the bonus claimed. Accord ing to the provisions of the Bombay Municipal Boroughs Act, 1925, under which the municipality is functions, the earnings of one• department cannot be held to be gross profits in the ordinary commercial or separate accounts were kept of the electricity department did not alter the position, as there was one budget for the municipality as a whole and income from and expenses of all departments consti tuted the income and expenses of the municipality. The different integrated whole, activities of the municipality constituted one trading sense. The mere fact constituted and