The Officer Commending 4(TN) Batalian N.C.C. No.3 v. VEDACHALAM CHETTIAR)

The Officer Commending 4(TN) Batalian N.C.C. No.3, Race Course Road Coimbatore-641 018. .. Respondents in W.P.16576 of 1991 and W.P.No.4421 and 4422 of 19991. Government of Tamilnadurep by Secretary, Law Department, Fort St. George, Chennai-9.2. The X Rent Controller, Small Causes Court MadrasHigh Court Compound, Chennai-104.3. K.J. Bastian & Co.,23 Vanniar Street, Chennai-1.... Respondents in W.P.No.2550 of 19991. The State of Tamilnadurepresented by itsChief Secretary, Fort St. George, Chennai-9.2. The XIIth Judge, Court of Small Causes, Chennai- 600 001.3. Dr. N. Krishnamurthy RaoNo.108, Bells Road, Triplicane, Chennai- 600 005.... Respondents in W.P.No.7134 of 20001. The Government of Tamilnadurep by Secretary to Government, Law Department, Fort St. George, Chennai-9.2. National Textiles Corporation (TN & P)rep by its Branch Manager,N.T.C. show room, Adyar, Chennai-20... Respondents in W.P.No.20910 of 20001.State of Tamil Nadurep. by its Secretary to Government https://hcservices.ecourts.gov.in/hcservices/ Law Department, Fort St.

While enacting the 1946 Act, the statement of the objects andreasons stated therein that the conditions which compelled the passingof the Madras House Rent Control Order, 1941, and the Madras GodownRent Control Order, 1942, had not ceased and anyway improved and "isnot likely to improve for sometime to come". Hence, it was necessaryto continue control of rent and eviction till such time as thesituation improved. It also stated that provision had been made forincrease of rents above the rates prevailing before 1st April 1940 witha view to prevent hardship to landlords.

This Act was subsequently replaced by the Madras Buildings(Lease and Rent Control) Act, 1949, containing similar provisions, tobe replaced ultimately by the 1960 Act. The significant changesintroduced in all these enactments related to the concept on thefixation of fair rent. Fixation of fair rent under the 1942 and 1949 Acts was related to rents prevailing in April, 1940 and allowed afixed percentage of increase from 8 1/3% to 50%, and for thosebuildings constructed after 1st April 1940, the increase was from 37½%and 75%.

The 1960 Act, however, replaced the 1949 Act to have a newscheme of its own. It provided for a fixation of fair rent - a returnon the basis of cost of construction, amenities provided and the costof the land at certain percentage. It also provided for increase inrent depending on its locational advantages. In the decision reportedin (1974) 1 SCC 424 (RAVAL & CO. Vs. K.G.RAMACHANDRAN), the Apex Courtheld that a perusal of the provisions showed that the legislature hadapplied its mind to the problem of housing and control of rents andprovided a scheme of its own. “It did not proceed on the basis thatthe legislation regarding rent control was only for the benefit of thetenants. It wanted to be fair both to the landlord as well as thetenant.” Thus the Rent Control Act is a piece of beneficiallegislation that the rights of the landlord as well as that of thetenants are protected. A balance was struck within the rights of thelandlord and the rights of the tenant.

Section 4 of the 1960 Act relating to fixation of fair rentwas substituted by Section 6 of the Amending Act 23 of 1973. Thisconcept of fair rent as per the amendment is determined on "apercentage on the" gross return on the total cost of the buildings. The basis of working of such return is guided by the provisions of Section 4.6. Under the present provision, the fair rent for any residentialbuilding shall be 9% gross return on the total cost of such buildingand 12% in the case of non-residential building. The market value of https://hcservices.ecourts.gov.in/hcservices/ the site in which the building is constructed, cost of construction, cost of providing of amenities specified in the Schedule are to beworked out in accordance with the guidelines provided under the Section. The Section provides that while calculating the market valueof the site, the Controller shall take into account only that portionof the site on which the building is constructed and a portion upto50% thereof of the vacant land appurtenant to such building, theexcess portion of the vacant land treated as an amenity. Section 4also contained a proviso putting a ceiling on the amenities to bevalued at 15% in the case of residential building and in the case ofnon-residential building, 25% of the cost of the site in which thebuilding is constructed. The amenities that go for valuation is givenunder Schedule-I. The cost of construction is to be calculated atthe rates adopted for purposes of estimation by the Public WorksDepartment of the Government public area concerned. It also permittedelasticity for the Controller to allow or disallow an amount notexceeding 30% of the cost of construction, depending on the nature ofconstruction, apart from deducting depreciation as calculated at therates specified in Schedule-II.

For the purpose of considering the contentions in these writpetitions, we need to draw our attention to Section 4, Section 5 and Section 6. These provisions deal with fixation of fair rent. WhileSection 4 prescribes the methodology on the fixation of fair rent, Section 5 states that the fair rent fixed would not be subjected tofurther increase except under stated circumstances. Section 5 statesthat at any time subsequent to the determination of fair rent by the Rent Controller, if some addition, improvement or alteration iscarried out at the landlord’s expense and at the request of thetenant, the landlord could go for re-fixation. The re-fixationshall be comparable to the fair rent payable for a similar building inthe same locality with such addition, improvement or alteration. Whilereserving such a right for the landlord, the Act is careful enough totake care of the interest of the tenant in that, where there is adecrease, diminution in the accommodation or amenities provided afterthe fixation of fair rent, a tenant can approach the Rent Controllerfor a re-fixation by a reduction in the fair rent. It may be noted atonce the re-fixation of fair rent is related to the amenitiesprovided, added or improved and certainly not on account of the effectof market forces on land value. The Act (Section 5 (3)) also reservedthe right for those landlords or tenants to have the fair rent fixedunder this amended provision, if in case, the fair rent was fixedbefore the date of commencement of this Amending Act, 1973 Section 5(3). The Act prohibits entertaining a second petition for revision offair rent except on the grounds stated in the statute.

Section 6 enables the landlord to recoup excess tax payable on https://hcservices.ecourts.gov.in/hcservices/ the property from the tenants. The Section comes to the rescue of thelandlord where there is an increase of taxes, to be collected from thetenant. It must be noted that the increase in the taxes is notrelatable to increase of rent in respect of the building. Where theamount of taxes payable for any half year commencing on the 1st April1950 or any later date exceeds the taxes payable for the half yearending 30th September 1946 or for the first complete half year afterthe date on which the building was first let, whichever is later, thelandlord is entitled to claim such excess from the tenant in additionto the rent payable for the building under this Act. 9. In the decision reported in (1987) 1 MLJ 385, at 386 (SHADHANRAJ CHUNILAL Vs. VEDACHALAM CHETTIAR), this Court clearly heldthat in view of the rigid terms of Section 5, there is no scopefor entertaining a second petition for revision of fair rent ongrounds of equity and good conscience. The economic changes make noimpact on the fair rent fixed under this provision, except to theexception of cases given in sub section (1) under stated circumstancesor under sub section (3) where the fair rent was fixed even prior tothe introduction of the amendment under the Amending Act, 1973.

In the context of the restricted avenues open to a landlordto have the fair rent fixed and considering the provision of Section 5(3), disputes are raised before this Court challenging the provisionsof this Act as arbitrary and hence, violative of Article 14 of the Constitution of India. The challenge made are to Section 4 and Section 5. Writ petitions herein are W.P.Nos.16576 of 1991, 2550 of1999, 4421 and 4422 of 1999, 7134 of 2000, 20910 of 2000, 20912 of2000, 43116 of 2002, 3399 of 2004, 3285 of 2005, and 7696 of 2005.

The facts in each of these cases are as follows:W.P.No.2550 of 1999:The writ petitioners herein are the owners of the property at Chennai-1 in occupation of the third respondent. The total extent ofthe tenanted property is of 2500 sq.ft. (2 godowns each measuring 1250sq.ft.) 1600 sq.ft. for loading and unloading activities. Theoriginal rent of Rs.200/- was re-fixed at 946/-, the appellate Courtreduced it to Rs.788/- and confirmed by this Court under orders in the Civil Revision Petition dated 17.11.1981 with effect from 24.2.1976.The said fair rent was fixed under the amended Act 23 of 1973. Thegrievance of the petitioners herein is that the revised rent of 1976remains as it is even today since fair rent fixed is relatable to thedate when the landlord or the tenant chooses to file the applicationunder the 1973 Act. Confronted by the statutory restriction in Sections 4 and 5, the petitioners challenge the arbitrariness in theseprovisions as violative of Article 14 inasmuch as fixation of fairrent varies from time to time, tenant to tenant and from landlord to https://hcservices.ecourts.gov.in/hcservices/ landlord.

Referring to Section 5, the petitioners referred to Section 5(1) as an objectionable portion which reads

no further increase insuch fair rent should be permissible except in cases where someadditions, improvements or alterations have been carried out at thelandlord’s expenses and if the building is then in occupation of thetenant at his request.

According to the petitioners, if the above https://hcservices.ecourts.gov.in/hcservices/ objectionable portion is struck down, the first proviso to Section 5(1) becomes unworkable. Hence, the entire Section 5(1) with thefirst proviso deserved to be struck down as constitutionally invalid, it being violative of Article 14 of the Constitution of India.W.P.Nos.4421 and 4422 of 1999 and 16576 of 1991:

These writ petitions concern with leasing of property to Government Departments. The petitioners herein state that the Government, as per the order dated G.O.No.753, Public WorksDepartment, dated 7.4.1984, directed the Chief Engineer (Buildings),Public Works Department, Chepauk, Chennai, to advise the officers ofthe Public Works Department to fix a reasonable rent for the buildingstaken on lease by the Government Departments once in three years. Thefair rent for the said property was fixed as early as 6.12.1985,taking note of the value of the land and building as on 15.9.1980. Itis stated that taking into consideration the Government guideline, thevalue of the said land and building as on the date of filing the writpetitions was to the tune of Rs.1,92,84,180/-. The fair rent fixedtaking the value of the property at Rs.6,86,146/- was at Rs.6,000/-.The petitioners had preferred W.P.No. 16576 of 1991 for a writ of Mandamus to direct the second to fourth respondents namely, ChiefEngineer, Public Works Department, Revenue Divisional Officer, Accommodation Controller, Coimbatore, Divisional Engineer (Buildings),Public Works Department, Coimbatore, to implement the Government Orderdated 7.4.1984 and to continue to do so once in three years and toconsequently direct respondents-5 and 6 to pay a reasonable rent asfixed by the respondents. The petitioners state that the writ petitionis still pending before this Court. W.P.No.7134 of 2000:

As far as W.P.No.7134 of 2000 is concerned, the petitioner inthis case is the owner of the premises in which the first floor is letout to a Doctor to run his eye clinic. He was charging a monthlyrental of Rs.300/- since 1973. In the year 1982, he filed a petitionfor fixation of fair rent. The fair rent was fixed by the RentController by April, 1983, fixing the fair rent at Rs.392/-. It isstated that after much pursuasion, the petitioner convinced thetenant, the third respondent in the writ petition, for an enhancedrent, and it is stated that at present, Rs.1,000/- is paid as rent. The petitioner contends herein that the property tax had been revisedtwice and he was paying half yearly tax of Rs.1,285.35 from the year1983; thereafter from 1993, at Rs.2,173/-. It is now stated that heis paying a property tax of Rs.4,652/-. The petitioner states thatthe approved valuer’s valuation for monthly rent fixed for year 1999based on the formula fixed under the Act, was arrived at Rs.7,725.29.The petitioner filed a R.C.O.P. for fixation of fair rent and the same https://hcservices.ecourts.gov.in/hcservices/ is now pending. The tenant, third respondent, has filed the counteraffidavit that the monthly fair rent would be approximatelyRs.2,213/-. Having regard to the bar under the provisions of the Act, the petitioner had sought for a writ remedy to declare Section 5 ofthe Act as amended by Act 23 of 1972 and Act 1 of 1980 as void andhence, to strike down the same as ultra vires the Constitution. Thegrounds taken therein is, Section 5 had no reasonable relation to theobject sought to be achieved or for the purpose of the saidlegislation. The petitioner states that there is an irrationaldiscrimination between the landlord who had filed petition forfixation of fair rent before 1973 Amendment Act and the one who filesafter the Amendment Act of 1973. Pointing out to the steep increasein the market price of the properties in Chennai, the petitionersubmits that the statutory bar under Section 5 in applying for re-fixing the fair rent is discriminatory. W.P.No.3399 of 2004:

W.P.No.3399 of 2004 is filed by the owners of the premises in Angappa Naicken Street, Chennai. It is stated that the petitionerfiled R.C.O.P.No.341 of 2000 for fixation of fair rent. However, taking note of the fact that the petitioner had already preferred asimilar petition on earlier occasion in H.R.C.No.4549 of 1991, thetenant, third respondent herein, resisted this application as barredin view of Section 5. The Rent Controller dismissed the same, and itis stated that by way of abundant caution, he had filed an appeal andthe same is numbered as R.C.A.No.868 of 2004, now pending on the fileof the VII Judge, Small Causes Court, Chennai. The challenge to theprovisions are on similar grounds as in other writ petitions. Pointingout to the arbitrariness and discriminatory treatment of theprovisions creating different classes among the landlords and thetenants for all times to come, the petitioner has sought for adeclaration that Section 5(1) read with proviso of the Act is ultravires the Constitution and hence, to strike down the provision.W.P.No.20910 of 2000:

In W.P.No.20910 of 2000, the petitioner is an absolute ownerof the property, the ground floor portion of which was leased out tothe second respondent for non-residential purpose in the year 1974 ona monthly rent of Rs.1,173/-. It is stated that he filed a petitionfor fixation of fair rent in the year 1983 and that since 1983, he hasbeen paying a rent of 1,950/-. It is stated that the property issituated in a commercial area. Hence, the petitioner filed a secondfair rent petition in 1995. However, the same was dismissed as notmaintainable in view of Section 4 of the Act. The petitionersubmitted that the said legal position causes irreparable loss, hardship and injustice. Questioning the arbitrariness in theclassification evidenced in the operation of the provisions of the https://hcservices.ecourts.gov.in/hcservices/ Act, the petitioner has sought for a writ of declaration to declareSection 5(1) as ultra vires and to set aside the order dated 28.4.2000passed by the XV Judge, Small Causes Court, in R.C.O.P.No.1871 of1996. W.P.No.7696 of 2005:

In W.P.No.7696 of 2005, the petitioner as the owner of theproperty filed an R.C.O.P. for fixation of fair rent in respect of theproperty situated at Anna Salai. By order dated 11.12.1986 inC.R.P.No.3787 of 1986, this Court fixed the fair rent at Rs.12,500/-,on a compromise made between the parties. It is stated that thecompromise was reached in respect of a property belonging to a minorwithout obtaining the permission of the Court. Consequently, a freshrevision was filed and the same was dismissed in view of Sections 4and 5 of the Rent Control Act. The appeal preferred also failed. Consequently, the writ petition has been preferred challenging theprovisions, apart from filing a revision before this Court. Thepetitioner states that considering the guideline value, the monthlyrent fixed is unfair and unreasonable and that property tax had beenrevised, however, without a corresponding increase in the rent. It isstated that the provisions contained in Sections 4 and 5 are arbitraryand unjust that the fair rent could not be a specific figure unalteredand the Rent Control Act was silent regarding changed circumstances. Consequently, the prayer is made to declare the provisions asunconstitutional. W.P.No.14525 of 2001:

W.P.No.14525 of 2001 is filed by the hereditary trustee ofthe private family temple, who is the owner of the property leased outto him. The tenancy was on a monthly rent of Rs.160/- from the year1974. By order dated 25.11.1986, the Rent Controller fixed the fairrent at Rs.419/-. The respondents herein are the legalrepresentatives of the original owner who died. This Court, by orderdated 11.2.1997 in C.R.P.No.3462 of 1996, fixed the fair rent atRs.1,000/- as on the date of the application. It is stated that thetotal extent of the land is 1789 sq.ft. and the total built-up area onthe ground floor and first floor is 2060 sq.ft. It is stated that the Corporation had proposed to revise the property tax on the basis ofthe fair rent of Rs.6,610.61 per month, calculating the same as perthe provisions of the Rent Control Act and the tax was proposed to beraised from Rs.802/- to Rs.2,186/- per half year. Faced with this, the petitioner called upon the respondents to pay a rent of Rs.3,000/-which they refused. This necessitated a fresh filing of a petition on20.4.2000 for fixation of fair rent. The petitioner states thathaving regard to the provisions of Sections 4 and 5, this Court hadalready determined the fair rent earlier. This petition has beenpreferred taking note of the objection of the respondent herein. The https://hcservices.ecourts.gov.in/hcservices/ grounds of attack in these petitions are similar to the ones made inthe other petitions.

A counter affidavit has been filed contending that the saidGovernment Order was not applicable to the buildings taken on leaseunder the Tamil Nadu Buildings (Lease and Rent Control) Act, in viewof G.O.No.2043, Public Works Department, dated 15.10.1987. Apart fromthis, the respondents also deny the allegations stated therein andpray for dismissal of the writ petition.

Learned counsel appearing for the writ petitioner inW.P.No.3399 of 2004, submitted that the prohibition contained in Section 5 creates a permanent class of tenant and landlord therebyconferring permanent benefit to the tenant. He further submitted thatwhen there had been a considerable increase in the value of theproperty, there is no corresponding revision in the rent. He furthersubmitted that the fixation of fair rent is based on gross return perannum on the total cost of the building which shall consist of themarket value of the site and the cost of construction of the building. The prohibition contained in Section 5 for a second petition for arevision of the fair rent commensurate with the concept in Section 4is arbitrary and violative of Article 14. Learned counsel furthersubmitted that when the property tax gets revised on the market valueconcept, the rent which is based on a return without any amendment isdiscriminatory and arbitrary. learned counsel also brought to theattention of the Court similar provisions in the Andhra Pradesh Act. In this connection, learned counsel placed reliance on the decision inAIR 1984 S.C. 121 (MOTOR GENERAL TRADERS Vs. STATE OF A.P.), AIR 1998SC 602 (MALPE VISHWANATH ACHARYA Vs. STATE OF MAHARASHTRA), 1995 (2)KLJ 555:1995 (2) KLT 848 (ISSAC NINAN Vs. STATE OF KERALA) affirmed in(2002) 10 SCC 180 (K.N.RAGHAVAN Vs. HABEEB MOAHMMED AND OTHERS).Learned counsel also placed reliance on the decision of this Court in(2002) 1 MLJ 568 (KETHMUL Vs. HUSAINI BEGUM) wherein, the need foramending these provisions was emphasised by this Court.

Mr.Jagadev, appearing for the petitioner in W.P.No.20910 of2000, submitted that the fair rent was fixed as early as 1983, butafter 12 years, the second petition was filed which was dismissed. Itis submitted that Sections 4 to 6 form a single code; while the Actrecognised a revision where the fair rent was fixed prior to 1973, therent fixed after 1973 under Section 4 remained frozen for all times tocome; that even as per the calculation done under Section 4, thevalue of the land and the returns to be calculated are far more thanwhat was prevailing, when the fair rent got fixed at the firstinstance revealing glaring arbitrariness in continuing a rent totallymismatching with the realities. While Section 6 permits an increasein fair rent when the property tax increases, Section 5 is apparently https://hcservices.ecourts.gov.in/hcservices/ inconsistent with Section 4. He further submitted that the rentpayable cannot be a stagnant one, particularly in a case where aproperty consists of two portions in the same building and the rentfixed for one portion 15 years back or so, the second portion in thesame building having a fair rent fixed thereafter, projecting totallyincomparable rent thus showing anomaly in respect of two portions inthe self-same building.

Mr.Srinath Sridevan, appearing for some of the petitioners, brought to our attention the Assembly debates and the objects of theamending Acts which showed the shift in the policy in the amendingActs. Mr.Vijay Sundar, appearing in W.P.No.14525 of 2001, alsoemphasized on the arbitrariness in the working of the provisions. Learned counsel also placed reliance on the decision of the SupremeCourt reported in AIR 1977 SC 2191 (MIRAN DEVI Vs. BIRBAL DASS), that Courts have the power to fix the fair rent from any particular date, even though the petition may relate to an anterior date. He alsoreferred to the decision reported in (2003) 7 SCC 589 (INDIANHANDICRAFTS EMPORIUM Vs. UNION OF INDIA) that law once declared validmay become otiose by efflux of time. He also placed reliance on thedecisions reported in (1986) 3 SCC 385 (RATTAN ARYA V. STATE OF TAMILNADU), (2003) 6 SCC 611 (JOHN VALLAMATTOM Vs. UNION OF INDIA) and(1974) 1 SCC 424 (RAVAL & CO. Vs. K.G.RAMACHANDRAN) to submit that thesaid decisions do not settle the issue.

Mr.K.V.Rajan, appearing for the petitioner in W.P.No.16576 of1991, referred to the differential treatment meted out to Governmentbuildings which enjoy revision of rent once in three years at 15%, butwhereas in the case of building owned by the citizen, except for one-time revision under the Act, no right is protected under Section 5 fora revision in fair rent. In these circumstances, petitioner prayedthat the provisions be declared unconstitutional.

Mr.Vijayaraghavan, appearing for the tenants in W.P.No.3399of 2004, pointed out to the fundamental differences between the MadrasAct and the Bombay Act and relied on the decision reported in AIR 1998SC 602 (MALPE VISHWANATH ACHARYA Vs. STATE OF MAHARASHTRA) toemphasise on the difference in language between Section 9-B of the Bombay Act and Section 5 of the Madras Act. He further submitted that Section 5 permits a revision of the fair rent whenever there wereadditions to the building and that there cannot be a mandamus to thelegislature for an amendment as prayed for. That would be intrudinginto the legislative field. He placed reliance on the decision of the Supreme Court reported in (1998) 8 SCC 275 (C.N.RUDRAMURTHY Vs.K.BARKATHULLA KHAN) and (1995) 1 SCC 104 (D.C.BHATIA Vs. UNION OFINDIA) and submitted that it is for the legislature to decide itspolicies to be laid for protecting the section of the people. He also https://hcservices.ecourts.gov.in/hcservices/ emphasised that the provision of the State Act could not be comparedwith the other State provisions. For this, he relied on the decisionof the Supreme court in (1988) 1 SCC 366 (SANT LAL BHARTI Vs. STATE OFPUNJAB).

Learned Government Pleader appearing for the State submitsthat the decision in (1974) 1 SCC 424 (RAVAL & CO. Vs.K.G.RAMACHANDRAN), fully covers the issue; as such, the petitionersare not entitled to challenge the same.

The submission of the petitioner may be summed up as follows: The grievance of the petitioner herein is that while the RentControl Act was originally introduced as a wartime measure and as apart-time measure, the continuance of the same disregarding thechanged circumstances particularly to one aspect in the components offair rent fixation is arbitrary and unnatural. The restriction under Section 5(3) snaps the rights of the landlord to have the fair rentfixed in tune with the enhancement in the land value and thus hasblocked the rights of the landlords to have a fair return from theproperty let out. The vast variation in the fair rent fixed inrespect of similarly placed properties by reason of invoking of theprovisions under Section 4 at different points of time rings adiscordant note that there exists no reasonable basis in Section 5(3)of the Act prohibiting the right of the landlord to have a refixationof the fair rent done. As for example, a property having a fair rentfixed under the Rent Control Act, say in 1980, and the propertysituated in the same building having its fair rent fixed in 1985stands in no comparison with each other or even with similarlysituated properties having the same characteristics in the locality. The property subjected to two different fair rents ceases to enjoyfairness in the treatment and protection from the enactment; thus theprovision really is unfair and arbitrary to the detriment of thelandlord. Hence, the restriction contained in the provisions scheme of Sections 4 and 5 really work hardship on the rights of the owners ofproperties let out and hence, arbitrary and violative of Article 14 ofthe Constitution of India.

The petitioners also attack the constitutionality of theprovisions, the provisions having failed to satisfy the principles ofreasonableness under Article 14 of the Constitution of India.

The petitioners submit that the restriction in the provisionthat in respect of the fair rent fixed post 1973, a landlord could notgo for a revision taking note of the changes from time to time withreference to the locality and the prevailing rent and the facilitiesavailable would certainly have a serious impact on the rights of thelandlord, since once inducted as a tenant, the eviction on any other https://hcservices.ecourts.gov.in/hcservices/ ground than the stated one under the Act is a near impossibilitywithout any better return from the property. The grievance of thepetitioners is, given the fair rent concept designed as a gross returnfrom the property, the provision in Section 5(3) is really anunfair restriction on the rights of the petitioners offendingArticle 14. Hence, the proviso to sub section (4) of Section 4 thatthe fair rent is fixed on market value of the site is totally anillusory provision.

The petitioners also point out that the concept of fair rentfixation under Section 4 is dependent on a fair return. The working ofa fair rent itself is on the basis of the market value concept. Sincethe market value is not a static concept, changes in the market valuenecessarily must have its reflection in fair rent fixation too. Insofar as the Act puts an embargo on a fair rent fixationcommensurate with changes in market value, the provisions contained in Section 5(3) is totally arbitrary and hence, offensive of Article 14.

At this stage, before going into the rival contentions, wemay usefully extract Sections 4 and 5 of the Rent Control Act. Theprovisions under challenge are highlighted: Section 4:" Fixation of fair rent.-(1) The Controller shall on application madeby the tenant or the landlord of a building andafter holding such enquiry as he thinks fit, fixthe fair rent for such building in accordance withthe principles set out in the following sub-sections. (2) The fair rent for any residentialbuilding shall be nine per cent gross return perannum on the total cost of such building. (3) The fair rent for any non-residentialbuilding shall be twelve per cent gross return perannum on the total cost of such building. (4) The total cost referred to in sub-section(2) and sub-section (3) shall consist of themarket value of the site in which the building isconstructed, the cost of construction of thebuilding and the cost of provision of anyone ormore of the amenities specified in Schedule I ason the date of application for fixation of fairrent: Provided that while calculating the marketvalue of the site in which the building isconstructed, the Controller shall take intoaccount only that portion of the site on which the https://hcservices.ecourts.gov.in/hcservices/ building is constructed and of a portion uptofifty per cent, thereof of the vacant land, ifany, appurtenant to such building the excessportion of the vacant land, being treated asamenity: Provided further that the cost of provisionof amenities specified in Schedule I shall notexceed --(i) in the case of any residential building, fifteen per cent; and(ii) in the case of any non-residential building, twenty-five per cent, of the cost of the site in which the building isconstructed, and the cost of construction of thebuilding as determined under this section.

While considering the merits of the submissions of thepetitioner, it is necessary that we keep in mind that the Rent Act isa piece of social legislation enacted to protect the tenants fromcapricious and frivolous eviction. The legislation extends statutoryprotection to the tenants who could not be evicted or rent thrust onexcept in the manner provided under the Act. It may be noted that the Rent Act is not a statutory protection having one-sided running of thebenefit to the tenants alone. The Act provides for fixation of fairrent and also for enhancing/reducing the same under the given set ofcircumstances. Therefore, it prescribes protection both to theaggrieved landlord as well as to the tenant. In short, it affordslegal protection against any excesses either from the side of thelandlord or the tenant.

A perusal of Section 4 shows that the fair rent shall befixed in accordance with the principles set forth in Section 4. In thecase of residential buildings, the fair rent is quantified by 9% onthe "gross returns on the total cost of the building as on the date ofthe application for fixation of fair rent". In the case of non-residential building, it is stated to be 12% on the gross return. Thetotal cost of the building referred to in Sub Sections (2) and (3)consist of the market value of the land and cost of construction ofthe building and cost of the amenities specified as on the date of theapplication for fixation of fair rent. The cost of construction andthe market value of the building as on the date of application istaken as per the proviso of Sub Section (4). As per Section 4(5)(a),the cost of construction adopts the value worked out by the Public https://hcservices.ecourts.gov.in/hcservices/ Works Department of the Government for the area concerned. It furtherstipulates that the Controller shall deduct from the cost ofconstruction determined in the manner specified in clause (a),depreciation calculated at the rates specified in the Second Schedule. The market value of the site in which the building is constructed forthe purpose of fair rent fixation, takes note of the portion of thesite on which the building is constructed and a portion of 50%thereof, of the appurtenant land in excess of the vacant land beingtreated as an amenity.

A perusal of the Section 5(1) shows that the fair rent fixedonce shall not undergo a further increase or a reappreciation exceptin cases of alteration, improvement or addition to the building. Further, the Section enjoins that the building should be in theoccupation of a tenant and at his request the said modification hasbeen carried out at the expense of the landlord. Under Sub Section(3) where the fair rent of the building has been fixed before thecommencement of the Act of 1973, then the refixing of fair rent inaccordance with Section 4 is available to a landlord.

It is no doubt true that the rent fixed at different pointsof time for two properties in the same building lead to differentresults. The rent fixed under Section 4 is a fair working on themarket value of the property assuring a certain return from theproperty to the landlord. But at the same time, it must not beforgotten that the fair rent fixed is a gross return at a percentageon the "total cost of the building". It may go for a rise or anincrease wherever there is a case of an addition, improvement, or analteration carried out at the instance of the tenant and at theexpense of the landlord. Further, under Section 6, where the amountof tax in cases payable by the landlord in any half year commencing on1.4.1950 or any later date, exceeds the one payable for the first halfyear ending 30th September 1946 or the first complete half year afterthe date on which the building was first let, whichever is later, thelandlord shall be entitled to claim such excesses from the tenant inaddition to the rent payable for the building under the Act. 35. In the background of the scheme under the Tamil Nadu Act, the decision relied on need to be noted on the law laid down therein.

Learned counsel appearing for the writ petitioners laid greatstress on the decision of the Apex Court in AIR 1998 SC 602 (MALPEVISHWANATH ACHARYA Vs. STATE OF MAHARASHTRA). This decision arises outof a decision from the Bombay High Court under the Bombay Rents, Hoteland Lodging House Rates Control Act. Considering the provisions ofthe Bombay Act, the Apex Court held that the provisions of the BombayRent Control Act relating to the determination and fixation of the https://hcservices.ecourts.gov.in/hcservices/ standard rent could no longer be considered to be reasonable. Referring to the increase of rents being frozen with effect from 1stSeptember 1940, the Apex Court held that the restriction on the rightof the landlords was no longer a reasonable restriction and theprovision had become discriminatory, arbitrary and unreasonable. TheApex Court further referred to the 1987 amendment and pointed out thatthe said amendment did not do away with the principle of pegging downof the rent at a rate when the premises was first let out.

At paragraph 28 of the judgment, the Apex Court referred tothe object behind the social legislation like a Rent Controllegislation. Referring to the statistics given as regards the changesin the standard of living, the burden on the landlords by reason ofvarious demands under the statutory provisions and the restrictionthereon, the Apex Court noted that the amendments brought forth in1987 indicated the fact that the State legislature was conscious ofthe need for increasing the standard rent. However, the amendingAct merely consolidated and re-arranged the Sections withoutmaking any substantive change to the pegging down of the rent at arate when the premises was first let out. The Court called thisamendment as cosmetic in character and thus the provisions were heldto be bad in law. The Court, however, felt that it was not necessaryto strike down the same, since the provisions of the Rent Act were tocome to an end from 31.3.1998 and the new bill was underconsideration. Ultimately, the Apex Court, without striking down theprovisions, held that the decision of the High Court was not correct. The judgment dated 19.12.1997 expressed hope that a new Rent ControlAct would be enacted with effect from 1st April 1998, keeping in viewthe observations made in the judgment insofar as fixation of standardrent is concerned. However, it made clear that any further extensionof the existing provisions without bringing them in line with theviews expressed in the judgment, would be invalid as being arbitraryand violative of Article 14 of the Constitution of India.

In the course of argument, learned counsel for thepetitioners referred to the decision of the Kerala High Court reportedin 1995 2 KLT 848 (ISSAC NINAN Vs. STATE OF KERALA). Referring to thedecision of the Supreme Court reported in AIR 1987 SC 2016 (GANPAT RAMVs. GAYATRI DEVI), dealing with the Rent Act in the State of Kerala, the Kerala High Court held that the Rent Control Act is a beneficiallegislation; yet, the legislation does not confer any vested right onthe tenants. Even though there is a presumption as to theconstitutionality of a provision of an enactment, the Act should beread so as to prevent it from being exposed to the vice ofunconstitutionality. Referring to the word "control" and theinterpretation of the said term in the decisions of the Supreme Courtreported in (1972) 4 SCC 600 (SHAMRAO VITHAL CO-OP. BANK LTD. Vs. https://hcservices.ecourts.gov.in/hcservices/ K.P.MALLYA), AIR 1974 SC 1863 (STATE OF MYSORE Vs.

The decision reported in (2002) 10 SCC 180 (K.N.RAGHAVAN Vs.HABEEB MOAHMMED AND OTHERS) relied on by the petitioners is a casewherein the Apex Court, referring the decision of the Kerala HighCourt reported in 1995 KLJ 555:1995 (2) KLT 848 (ISSAC NINAN Vs. STATEOF KERALA) and the findings recorded therein, dismissed the appealfiled by the tenant who was found to be in arrears of tax. Withoutgoing into the merits of the decision of the High Court, the SupremeCourt held that where the tenant had fallen into arrears, thecontention that the tenant was not a party to the proceedings andhence not binding, has no merit. When any provision is held to beultra vires, it covers the field as against all its subjects who arewithin the jurisdiction of the said legislation and the Court.

The Apex Court, in (1984) 1 SCC 222 (MOTOR GENERAL TRADERS V.STATE OF A.P.), had an occasion to consider the Andhra Pradesh RentControl Act, 1960. This relates to the continuance of an exemptiongranted under Section 32(b) of the Andhra Pradesh Act, whereunderthere is a classification of the rent exemption Clause.42. In the course of this judgment, the Supreme Court noted thatthe exemption granted in respect of buildings constructed after 1957continued for more than quarter of a century. The amendment attemptedon, however, did not materialise owing to the dissolution of thelegislative assembly. The Supreme Court noted that the provisionsgranting exemption per se was discriminatory and held theclassification of buildings for the purposes of Section 32(b) did notsatisfy the test of valid classification as per the standards laiddown by the Supreme Court in the case of RAM KRISHNA DALMIA Vs.JUSTICE TENDOLKAR (AIR 1958 SC 538). The Supreme Court further heldthat what may be unobjectionable as a transitional or temporarymeasure at an initial stage https://hcservices.ecourts.gov.in/hcservices/ can still become discriminatory and violative of Article 14 of theconstitution if it persisted in over a long period without anyjustification. Referring to the decision of the Apex Court in RAMKRISHNA DALMIA Vs. JUSTICE TENDOLKAR (AIR 1958 SC 538) on the questionof Article 14 with reference to continuance of a provision where theconsideration of necessity and expediency had either becomeobliterated or irrelevant by passage of time, the provisions weredeclared as violative of Article 14. The cases referred to were underthe State Reorganisation Act. Ultimately, the Court held that therewas no material to strike down the provision, although the Court feltthat a non-discriminatory piece of legislation may, in course of time, become discriminatory and exposed to a successful challenge on theground that it violated Article 14. The Court further noted that ifby striking down the provision, the class which is going to beaffected is enlarged, the Court cannot strike down the impugnedprovision. Referring to the decision in D.S.NAKARA Vs. UNION OF INDIA(1983 1 SCC 305), the Apex Court held that by adopting the principleof severability by striking down the words of limitation in theenactment, the provision can still be upheld.

The Apex Court held that the principles of Section 32(b)should be declared as violative of Article 14, since the continuanceof the provision will imply creation of a privileged class oflandlords. The Court held that the provisions of the Act will beapplicable to all buildings except to those falling under Section 32(a), exempted under Section 26 of the Act, irrespective of the date oftheir construction. In the circumstances, the Court reversed thejudgment earlier by the Andhra Pradesh High Court.

The sum and substance of these decisions cited may be statedas follows:A statute is a valid piece of legislation having regard to thepresumption of constitutionality. The legislature understands andappreciates the need of the people and direct itself to the problems. The discrimination that it imposes based on the necessities or thepolicies which brought forth the legislation is valid, justifiable inlaw. The legislature having full knowledge of the demands of thesociety, act in reasonableness to the needs of time. Yet, thepresumption of constitutionality cannot be carried on or extended forsome presumed reasons to a degree of breaking, that legislation wouldonly be called bad, discriminatory offending Article 14. Consequently, a provision of law which was valid at the inception ofits enactment may nevertheless become obselete and arbitrary under aset of changed circumstances. Considerations of necessity andexpediency on the grounds which justify the special treatment maycease to exist, thus making the very provision unconstitutional. https://hcservices.ecourts.gov.in/hcservices/

Learned counsel appearing for the petitioner brought to theattention of this Court the decision of the Supreme Court to impresson the fact that a law which was originally valid, by efflux of time, may become arbitrary and hence, deserves to be declared so. In thisconnection, learned counsel appearing for the petitioners referred tothe decision in (2003) 7 SCC 589 (INDIAN HANDICRAFTS EMPORIUM Vs.UNION OF INDIA). The Supreme Court held: " There cannot be any doubt whatsoever that a law whichwas at one point of time constitutional may berendered unconstitutional because of passage of time. "The Supreme Court held in the same decision: " An enactment which is enacted in public interestcannot be struck down on the ground that Courtthinks it unjustified; that the function of the Court is only to expound and not to legislate. "

A perusal of the contentions of the petitioners herein showthat in almost all cases, there had been a fair rent fixed once andthat the second round of litigation in respect of the petitioners wereprompted by similarly placed properties going in for fixation of fairrent yielding a better result.

In considering the above submissions based on Article 14violation, the guiding principles enunciated in some of the decisionsof the Supreme Court need to be noted. In the decision of the SupremeCourt in SHRI RAM KRISHNA DALMIA Vs. SHRI JUSTICE S.R.TENDOLKAR ANDOTHERS ((1959) SCJ 147), which need to be noted herein, the SupremeCourt held: " Two principles have been enunciated as regards Article14, namely: (i) the presumption in favour of theconstitutionality of an enactment; and(ii) a presumption that the legislature understands andcorrectly appreciates the need of its own people. The legislature is presumed to have knowledge of thefacts and conditions which render a particular piece oflegislation beneficial. The Supreme Court held, "to make out a case of denial of equalprotection of the laws under Article 14, a plea of differentialtreatment, by itself, would not be sufficient. The party must showthat he had been treated differently from the persons similarlycircumstanced, without any reasonable basis, and that this wasunjustified. " https://hcservices.ecourts.gov.in/hcservices/

On the question of violation of Article 14, the Supreme Courtheld that "when we are confronted with the problem of a legislationbeing violative of Article 14, we are not concerned of the wisdom orlack of legislative enactment, but we are concerned with theillegality of the legislation. ... The Courts are not concerned withthe unwisdom of legislation. " -- ((1987) 4 SCC 238) (PRABHAKARAN NAIRVs. STATE OF TAMIL NADU).

The Supreme Court, in the decision reported in (1987) 4 SCC238 at 256: AIR 1987 SC 2117 (PRABHAKARAN NAIR Vs. STATE OF TAMILNADU), quoted from the decision of Justice Krishna Iyer in MURTHYMATCH WORKS Vs. ASSISTANT COLLECTOR OF CENTRAL EXCISE (AIR 1974 SC497):" In short, unconstitutionality and not unwisdom ofa legislation is the narrow area of judicialreview. "

In STATE OF A.P. Vs. McDOWELL & CO. ((1996) 3 SCC 709), the Apex Court held that the parliament and legislature, composed as theyare of the representatives of the people, are supposed to know and beaware of the need of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom.

In DISTRICT MINING OFFICER Vs. TATA IRON & STEEL CO., ((2001)7 SCC 358), the Apex Court held: " Legislation in a modern State is actuated with somepolicy to curb some public evil or to effectuate somepublic benefit. The legislation is primarilydirected to the problems before the legislature basedon the information derived from past and presentexperience. "

It is an admitted fact that the object of the rentlegislation is held as a piece of social legislation having twoprinciples: (i) Regulation of letting; (ii) Control of rent; The intent and purpose of the Act is a welfare legislation extendingprotection to the landlords as well as to the tenants.

It may be noted that the entire scheme of the Act is anintegrated one and one part of it has its reflection on the other. Hence, the different aspects of the legislative policy reflect on eachother that there need to be a fair emphasis put on the policy behindthe introduction of this Act. The inter-relation of the object, purpose and policy cannot be lost sight of in the matter of https://hcservices.ecourts.gov.in/hcservices/ considering the validity of these provisions. In the background ofthis policy and given the basis for calculation in which the landvalue is only one aspect of the fair rent fixation, we do not findmerit in accepting the challenge made under Article 14 of the Constitution of India.

A cumulative reading of the scheme of Sections 4, 5 and 6make it clear that the entire system is so balanced that the fixationof fair rent is stated to be a fair return on a percentage on thetotal cost of the building calculated on certain guiding principles. It is relevant to note that the First Schedule appended to the Actgives a list of amenities which go with the property leased out in thematter of fixation of amenities. Hence, the fair rent fixation is notsolely dependent on the market value of the site, but has severalother factors which are provided for under Section 4.

As we have stated earlier, Article 14 does not authorisestriking down of a law of one State by a process of comparative studyof the provisions of two enactments in two different states. Eachlegislature has provided the method of determination of fair rent. Itmay be noted that the provisions under Section 5 is not a transitoryprovision unlike in the Bombay Act there is no pegging down of therent at a rate when the premises was first let out. It may further benoted that this is not a provision which is made for the particularsection of the society. The rent control legislation is a welfaremeasure. The fair rent fixation procedure is introduced with a view toobviate the chance of exploitation by the landlords. Hence, inenacting Section 5 and in continuing the same as one enabling re-fixation of fair rent under stated circumstances, there is noarbitrariness, since any fixation of fair rent with reference to aproperty is one calculated on the well formulated guidelines touchingon several aspects of the building let out, one of which necessarilyhas to be the market value of land. Being a fair rent worked on thetotal cost of the building, the statute provides for re-fixationdepending on the improvement, addition or alteration made to thebuilding; hence are different from the provisions of the Bombay Actconsidered by the Supreme Court in the case of AIR 1998 SC 602 (MALPEVISHWANATH ACHARYA Vs. STATE OF MAHARASHTRA).

It may be seen that the provisions of the Bombay Rent ControlAct pegged down to the rates prevailing on 1st September 1940. Therestriction on the rights of the landlords to have the rents increasedin the context of the same frozen as on 1st September 1940 or at thetime of first letting was held to be a bad provision, it having goneso with the passage of time. The Supreme Court also noted theamendment in 1987 amendment and pointed out that the said amendmentdid not do away with the principle of pegging down of the rent. Whiletaking note of the fact that such restriction only led to landlords https://hcservices.ecourts.gov.in/hcservices/ taking recourse to pagli system in view of the low rents, the Courtexpressed serious concern over the disgruntled landlords takingrecourse to extra legal methods. In the circumstances, the Courtexpressed the view that the legislation like the Rent Act must strikea balance between the rival interest and it should be just to all.

It may be noted that the provisions of the Bombay Act are notthe same as the Tamil Nadu Act for this Court to accept the pleaof the petitioners that the decision of the Supreme Court in AIR 1998SC 602 (MALPE VISHWANATH ACHARYA Vs. STATE OF MAHARASHTRA) has astrong bearing on the issue to hold the Tamil Nadu provisions asunconstitutional. We do not find any merit in accepting the case ofthe petitioners that the provisions of the Tamil Nadu Act deserveto be considered in the light of the decision of the Supreme Courtin the case reported in AIR 1998 SC 602 (MALPE VISHWANATH ACHARYA Vs.STATE OF MAHARASHTRA).

So too, the decision of the Supreme Court reported in (1995)1 SCC 104 (D.C.BHATIA Vs. UNION OF INDIA), the decision reported in(1986) 3 SCC 385 (RATTAN ARYA Vs. STATE OF TAMIL NADU) operate ontotally different issues and hence have no bearing, considering thestatutory provisions therein. In the case of RATTAN ARYA Vs. STATE OFTAMIL NADU reported in (1986) 3 SCC 385, the situation is a totallydifferent one, wherein, the Court was to consider theconstitutionality of the provision in respect of exemption to tenantspaying rent exceeding Rs.400/-. In the context of the saidarbitrariness, the Court declared the same as unconstitutional.

Referring to the Rattan Arya's Case, the Supreme Court heldin D.C.BHATIA Vs. UNION OF INDIA ((1995) 1 SCC 104) that it is amatter of legislative policy and it is not for the Court to questionthe validity on the ground of lack of legislative wisdom. The Courtheld that the legislature must consider the latitude of makingclassification having regard to certain circumstances.

In the decision reported in (2002) 1 MLJ 568 (KETHMUL Vs.HUSAINI BEGUM), this Court considered a similar plea with regard torent control provision arising out of a proceedings wherein, theappellate authority held that a second application for fixing the fairrent is maintainable. The tenant challenged that order before this Court. This Court, after referring to the decision of the SupremeCourt in the case of MALPE VISHWANATH ACHARYA Vs. STATE OF MAHARASHTRAreported in AIR 1998 SC 602, as well as the decision in RATTAN ARYAVs. STATE OF TAMIL NADU reported in (1986) 3 SCC 385, summed up theconclusion holding that the Tamil Nadu Act is different. This Courtfurther held that: https://hcservices.ecourts.gov.in/hcservices/ " The Bombay Act which came up for consideration in Malpe Viswanath Acharya's case pegged down therates prevailing on 1.9.1940. The Andhra Actwhich was struck down in Mohd. Ataur Rahman Khanv. Mohd. Kamaladdin Ahmed (1987) 1 A.L.T. 216,froze the rents at a rate prior to 5.4.1944. Butthe Tamil Nadu Act is different. "The learned single Judge had an occasion to consider the variousdecisions cited, including those which are cited before this Court andultimately came to the conclusion referred to above. We do not findany ground to differ from the view expressed by the learned singleJudge. It may not be out of place to state here that except for thecommonness of the object between the two legislations viz., the TamilNadu Buildings (Lease and Rent Control) Act and the Bombay Rents, Hotel and Lodging House Rates Control Act, the provisions aredissimilar and not comparable for applying the decision of the SupremeCourt to understand the scope of the provisions to strike down thesame.

While as a matter of principle it cannot be denied that byefflux of time, the policy which compelled the enactment may lose itsvitality or the continuance of the provisions would introducearbitrariness, yet, by the same token, the said principle cannot beextended to the case on hand as a strait jacket formula, particularly having regard to Section 5 Sub Section (3). Thesubmission that the rent fixed, which was originally the fair rent, ceases to be so since it disregards the various other social andcommercial aspects of the building, is totally not supported by thescheme given in Sections 4, 5 and 6.

It may be noted that fixation of fair rent is stated to bethe percentage of gross return per annum on the "total cost of suchbuilding". The provision fixes a variable return depending on thenature of the building. Hence, the emphasis is more on the aspect ofthe building leased out rather than a return focused on the landaspect alone. The value of the site taken in the computation is onlyone of the several aspects in the fixation of fair rent. It is amatter of general knowledge that in all cases of lease, the rent underan agreement is a reflection on the building and amenities it providesfor, rather than on the site aspect of the building. The value of thesite as such alone does not get into the reckoning of the rent. Bythat, we do not undermine the locational benefits of a building. Yet, when the rent is fixed through the intervention of the Court, itbeing a fair return on the property let out, necessarily, the fixationhas to have some acceptable, logical basis that the end product is ajust rent having regard to all the circumstances. Hence, Section 4 https://hcservices.ecourts.gov.in/hcservices/ provides for a guideline which does not lean favouring one party noris it so one-sided that it introduces an element of arbitrariness inthe computation. Consequently, the one aspect of the valuation, viz.,the land undergoing change by market forces, cannot be viewed asintroducing an element of arbitrariness on the rent fixation solely byreason of Section 5(3) limitation. Hence, other things remaining thesame, the variation in value on the land does not per se introduce anelement of arbitrariness to defeat the provisions of Section 5(3).Hence, if under normal circumstances such forces do not have an impacton the rent fixed, we do not find any justification in the contentionof the petitioners that in so far as the legislature has failed toprovide for re-fixation of fair rent on the changes occurring in oneaspect of valuation, there exists arbitrariness in the provision, thusviolating Article 14.

The emphasis on the matter of fair rent fixation is not onthe land, but on the building which is the subject matter of thelease. As had already been noted, it is worked on the total cost ofthe building and not on the total cost of the property. That is whySection 5(1) provides for or takes note of the situation likeimprovement, addition and alteration in the building, calling forenhancement and revision of fair rent. Hence, having regard to theabove and considering the fact that the test of arbitrariness has tobe made on the strength of the provision of the particular enactment, this Court finds no ground to declare the provision asunconstitutional. What is true of the facility in a building may notbe true of another unit of the same building. In the absence of anysuch details, just on the score of the properties situated in the samelocality or in the same block enjoying better fair rent fixed, onecannot accept the plea of the petitioners herein to declare theprovision as unconstitutional.

It is relevant to note that even under Section 5, consciousof the fact that the return has to have a correlation to theinvestment in providing amenities or addition to the building let out, the statute itself recognises the right for a second fixation of fairrent and does not close the entry for a landlord to approach the RentController for re-fixation of the return on the investment. There isalso a reason for providing for re-fixation on the basis ofimprovement, addition and alteration done to the leased out building. The land let out as it is, does not go for a value revision on anyefforts of a person. This is more of a reflection of the marketforces. It means, without any additional investment from the personowning the property, market forces determine the appreciation anddepreciation in value of land. However, unlike in the case of a land, the appreciation and depreciation of the value herein is related tothe investment that the person makes on the building. Consequently, https://hcservices.ecourts.gov.in/hcservices/ we do not find any arbitrariness in the provision relating to fairrent fixation, particularly in the light of the provision made under Section 5. The legislative wisdom in keeping this aspect is a wellinformed knowledge on the subject of leasehold properties. There isno reason for reading any element of arbitrariness to declare the sameas violative of Article 14.

It is true that whenever a welfare measure like a RentControl Act is made for a section of the society, it could be at thecost of another. However, it may be noted keeping in mind the largerinterest of the society as well, continuance of such a law isnecessary. An eviction becomes unreasonable when the object is toexploit the situation arising out of the letting of a property at anunreasonably high rent and the rules of extortionate premium. At thesame time, there may also arise circumstances which would justify theinference that the tenant is trying to take an undue advantage of thesituation where the rent is abnormally low. By prescribing theguidelines as regards the fixation of fair rent under Section 4 andthe further enabling provision under Section 5(1) affording refixationunder the stated circumstances therein, the interests taken care of, the question of holding the provisions as unconstitutional does notarise.

There are no factual details to show that the provisions actarbitrarily. It may be seen that in some of the petitions, thepetitioners have stated that similarly situated properties, be it inthe same street or in the same block, are treated differently. Thereare no details as to how the fair rent in all other cases is fixed tostrike arbitrariness and incomparability.

It may not be out of place to point out that a fair rentfixed is a fair rent for the building. Jagadeesan,J. Pointed out inVENKATASWAMI Vs. ABDUL RAHIM AND BROTHERS ((1962) 1 MLJ 408) that allfair rent is essentially a just rent having regard to all thecircumstances. It is not a rent favourable to the landlord orfavourable to the tenant as such. In the case reported in AIR 1974 SC818 (M/s.RAVAL AND CO. Vs. K.G.RAMACHANDRAN), the Supreme Court heldthat: " A close reading of the Act shows that the fairrent is fixed for the building and it is payableby whoever is the tenant whether a contractualtenant or statutory tenant. What is fixed is notthe fair rent payable the tenant or to thelandlord who applies for fixation of fair rent butfair rent for the building, something like anincident of the tenure regarding the building. " https://hcservices.ecourts.gov.in/hcservices/

Considering the view that we have taken, we reject the prayerof the petitioners to declare the provisions as unconstitutional andviolative of Article 14.

In W.P.No.2550 of 1998 the petitioners have sought for a writof Declaration declaring the whole of sub section (1) of Section 5along withthe first proviso thereto, of the Tamil Nadu Buildings(Lease and Rent Control) Act (Act 18 of 1960) as amended by Act 23 of1973 and 1 of 1980 as ultra vires the Constitution of India and tostrike down the same insofar as the petitioners are concerned. Forthe reasons stated above, the writ petition stand dismissed.

In W.P.Nos.4421 and 4422 of 1999 and 16576 of 1991, thepetitioners have prayed for a writ of mandamus to direct therespondents to implement the Government Order in G.O.No.753, PublicWorks Department, dated 7.4.1984 C.No.(RT) 2043 PWD dated 15.10.1987and to pass appropriate orders. Considering the scope of this Government Order, the respondents are directed to consider therepresentation and pass orders in accordance with law. For thereasons stated above, these writ petitions are dismissed.

In W.P.No.7134 of 2000 the petitioner has sought for a writof declaration declaring Section 5 of the Tamil Nadu Buildings (Leaseand Rent Control) Act 1960, as amended by Act 23 of 1973 and Act 1 of1980 as null and void and consequentially to strike down the saidprovision as ultra vires the Constitution of India so far as thepetitioner is concerned. For the reasons stated above, this writpetition stands dismissed.

In W.P.No.3399 of 2004 the petitioners had sought for theissue of a writ of Declaration declaring sub section (1) of Section 5along with 1 proviso thereto, of the Tamil Nadu Buildings (Lease and Rent Control) Act, (Act 18 of 1960) as amended by Act 23 of 1973 and 1of 1980 as ultra vires the Constitution of India and to strike downthe same insofar as the petitioners are concerned. For the reasonsstated above, this writ petition also stands dismissed.

In W.P.No.20910 of 2000, the petitioners have sought for awrit of Declaration declaring sub section (1) of Section 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act as ultra vires the Constitution of India and to strike down the same as unconstitutionaland further set aside the order dated 28.4.2000 passed by the XVJudge, Small Causes Court, Madras in R.C.O.P.No.1871 of 1996 andremand the said case for fresh disposal in accordance with Section 4of the Tamil Nadu Buildings (Lease and Rent Control) Act of 1960. For https://hcservices.ecourts.gov.in/hcservices/ the reasons stated above, this writ petition is also stands dismissed.

In W.P.No.7696 of 2005, the petitioners have sought for awrit of Declaration, declaring the provisions of Sections 4 and 5 ofthe Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, asunconstitutional, unjust, unreasonable and violative of constitutionalrights to hold the property. For the reasons stated above, this writpetition is also dismissed.

In W.P.No.14525 of 2001, the petitioner had sought for a writof Declaration declaring sub section (1) of Section 5 of the TamilNadu Buildings (Lease and Rent Control) Act, 1960, as amended by TamilNadu Act 23/73 and 1/80 as invalid and void and of no legal effect asbeing arbitrary and in contravention of Article 14 of the Constitutionof India insofar as the petitioner is concerned. For the reasonsstated above, this writ petition is also dismissed.

C.R.P.No.686 of 2002 is filed under Section 25 of the TamilNadu Buildings (Lease and Rent Control), Act as amended by Act 23 of1973 and Act 1 of 1980 against the order and decreetal order dated21.3.2002 made in R.C.A.No.129 of 2000 on the file of the Rent ControlAppellate Authority (VIII Judge, Court of Small Causes, Chennai),reversing the order and decreetal order dated 20.12.1999 made inR.C.O.P.No.3108 of 1996 on the file of the Rent Controller (XII Judge, Court of Small Causes, Chennai). For the reasons stated above, this Civil Revision Petition stands delinked and posted separately forhearing.

C.R.P.No.1662 of 2005 is filed under Section 25 of the TamilNadu Buildings (Lease and Rent Control), Act as amended, against thedecree and judgment dated 6.1.2005 made in R.C.A.No.1611 of 2003 onthe file of the Rent Control Appellate Authority (VIII Judge, Court of Small Causes, Chennai), confirming the order dated 12.12.2003 made inR.C.O.P.No.161 of 2001 on the file of the Rent Controller (XVI Judge, Court of Small Causes, Chennai). For the reasons stated above, this Civil Revision Petition also stands dismissed.

Taking note of the facts and circumstances, we have nohesitation in rejecting the contention of the petitioners that theprovisions of Sections 4 and 5 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, suffer from arbitrariness to declare them asviolative of Article 14 of the Constitution of India and hence, unconstitutional.

Having thus upheld the provisions of the Act, we feel that asocial legislation like the Rent Control Act needs to have a balance https://hcservices.ecourts.gov.in/hcservices/ struck to accommodate the changing needs of the society. The SupremeCourt, in the decision reported in AIR 1998 SC 602 (MALPE VISHWANATHACHARYA Vs. STATE OF MAHARASHTRA), held that "insofar as sociallegislation like the Rent Contrlol Act is concerned, the law muststrike a balance between rival interest and it should try to be justto all. ... It is not as if the Government does not take remedialmeasures to try and offset the effects of inflation. ... Thelegislature is not shackled by the same constraints as the Courts oflaw. But its power is coupled with the responsibility. "

The public policy in a welfare state needs to be dynamic andcannot afford to be static in a growing economy. It is time that the State takes note of the desire expressed by the Apex Court that "thiscountry very vitally and very urgently requires a national housingpolicy if we want to prevent a major breakdown of law and order andgradual dissolutionment of people; after all shelter is one of ourfundamental rights .... A fast changing society cannot operate withunchanging law and pre-conceived judicial attitude. -- (AIR 1987 SC2117 (PRABHAKARAN NAIR Vs. STATE OF TAMIL NADU).

Unlike the constraints that the Courts of law have, legislature has wider space to legislate on to take into account thedemands of changing situations. There is greater need to approach theproblem from a holistic perspective in matters of this nature. In thecourse of the arguments, we were given to understand by the learnedSpecial Government Pleader that the Government was contemplating anamendment to the provisions of the Rent Act. We hope that keeping inmind the sentiments expressed, the State will take remedial actionsoon to fine-tune the provisions of the Act to match the changes intime.

There will, however, be no order as to costs.W.P.M.P.Nos.6329 and 6330 of 1999, W.P.M.P.No.10591 of 2000 areC.M.P.No.14003 of 2003 are closed.ksvSd/Asst. Registrar/true copy/Sub Asst. Registrar https://hcservices.ecourts.gov.in/hcservices/ To:1. The Secretary to Govt State of Tamilnadu Education Department Fort St. George Madras-600 009.2. The Chief Engineer (Buildings) Public Works Department Chepauk, Madras-600 005.3. The Revenue Divisional Officer and Accommodation Controller State Bank Road Coimbatore-641 018.4. The Divisional Engineer (Buildings) Public Works Department Big Bazaar Street Coimbatore-641 001.5. The Director N.C.C.Directorate Tamilnadu and Pondicherry Fort St.George, Madras-600 009.6. The Officer Commanding 4(TN) Batalian N.C.C. No.3, Race Course Road Coimbatore-641 018. 7. The Chief Secretary to Government State of Tamil Nadu Fort Saint George, Chennai 600 009.8. The Secretary to Government Law Department, Government of Tamil Nadu Fort St. George, Chennai-9.9. The X Judge(Rent Controller,) Small Causes Court Madras High Court Compound, Chennai-104. https://hcservices.ecourts.gov.in/hcservices/

10. The XII Judge Court of Small Causes, Chennai11. The VIII Judge, Small Causes Court Chennai-104 Appellate Authority under Act, 18 of 1960, High Court Compound, Chennai 600 10412. The Secretary to Government Housing and Urban Development Department, Secretariat, Chennai 600 009.13. The Branch Manager The National Textile Corporation (TN & P) N.T.C. Showroom Adyar Chennai 600 020.+ 2 cc to Shah and Shah Advocate sr no. 28081 and 28082+ 1 cc to Mr. K. Bijai Sundar Advocate sr no. 28133+ 1 cc to Mr. K.V. Sundararajan, Advocate sr no. 28485+ 1 cc to Mr. K. Yamunan Advocate sr no. 28090+1 cc to M/s. S. Vijayaraghavan, Advocate sr no. 28041+ one cc to M/s. G. Devi Advocate sr no. 28154+ 1 cc to Mr. K.V. Rajan Advocate sr no. 28229Pre-delivery order inW.P.Nos.16576 of 1991, 2550,4421, 4422, of 1999, 7134 and 20910 of 2000, 14525 of 2001, 43116 of 2002, 3399 of 2004 and 7696 of 2005 and C.R.P.No.1662 of 2005 BP,KK,KM,NM/8.8.06Delivered on: AK(CO)30.06.2006