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AJAY MOHAN GOEL, J. (ORAL) –

By way of this civil revision, the petitioner assails the judgment passed by the learned Appellate Authority in Rent Appeal No. 1 of 2021, in terms whereof, learned Appellate Authority while allowing the appeal filed under Section 24 of the H.P. Urban Rent Control Act by the respondent herein, has set aside the order passed by learned Rent Controller, Court No. 2, Mandi, in Rent petition No. 01/17/10, in terms whereof, the petition for determination/fixation of fair rent under Section 4 of the H.P. Urban Rent Control Act, 1987, was allowed by the learned Rent Controller.

2. Brief facts necessary for the adjudication of this petition are that an application was filed under Section 4 of the H.P. Urban Rent Control Act, 1987 (hereinafter to be referred as ‘the 1987 Act’), for determination/fixation of fair rent of premises, i.e. first floor of the building, situated in Municipal premises No. 2/3, Vijay Palace, Palace Colony, District Mandi, HP, measuring 634-25 Sq. meters, existing in Khewat Khatauni No. 651/813, Khasra Nos. 2331/2190, 2336/2229, Kitas 2, situated in Mauja Sain/366/1, Tehsil Sadar, (Mandi Town), District Mandi, HP.

3. The application was opposed by the respondent/tenant by filing reply.

4. On the basis of pleadings of the parties, learned Rent Controller framed the following Issues:-

1. Whether the petitioner is entitled to fixation of fair rent, if so as what rate, as prayed for? OPP

2. Whether petition of the petitioner is not maintainable, as alleged? OPD

3. Whether petitioner is estopped by his own act and conduct, as alleged? OPD

4. Whether petition is not properly valued for purpose of court fees and jurisdiction, as alleged? OPD

5. Whether petition is barred by order 2 Rule 2 of the CPC, alleged? OPD

6. Relief.

5. On the basis of evidence led by the parties in support of their respective contentions, the Issues were decided as under:-

6. The application was allowed by learned Rent Controller in the following terms:-

“17. Judged in the light of my above detailed discussion the instant petition for fixation of fair rent is allowed. The fair rent of demised premises having carpet floor area of 1384.36 square feet ( as mentioned in lease deed Ex. DA and DB) is held to be Rs. 35 square feet i.e. Rs. 35x1384.86 square feet=Rs.48,452.6/- per month from the date of filing of the present application. In peculiar facts and circumstances of the case, parties to bear their own costs. Memo of costs be prepared. The file after its due completion be consigned to the record room.”

7. Feeling aggrieved by the order so passed by learned Rent Controller, the tenant preferred an appeal. A copy of the grounds of appeal is appended with the petition as Annexure P-3 and a perusal thereof demonstrates that the order passed by learned Rent Controller was primarily assailed on the ground that the fixation of fair rent was exorbitant and on higher side. In terms of the impugned judgment, the order passed by learned Rent Controller has been set aside.

8. Learned Senior Counsel appearing for the petitioner/landlord has argued that the judgment passed by learned Appellate Authority is per se perverse. By referring to the contents of the same, learned Senior Counsel has submitted that the learned Appellate Authority has completely misread and misconstrued the provisions of the H.P. Urban Rent Control Act, 1987 and totally transgressed from the legal realms within which the appeal ought to have been adjudicated, which has resulted in grave injustice to the petitioner. After referring to the relevant statutory provisions of the H.P. Urban Rent Control Act, 1987, i.e. Sections 2 and 4 thereof, learned Senior Counsel submitted that the adjudication of the appeal ought to have been done within the statutory realms of the H.P. Urban Rent Control Act, 1987 and there was no occasion for the Appellate Authority to rely upon the provisions of the Transfer of Property Act, as was done by the learned Appellate Authority. Accordingly, he submitted that as the impugned judgment is perverse and not sustainable in law, the same be quashed and set aside.

9. Learned Counsel for the respondent-tenant, while defending the order passed by learned Appellate Authority submitted that the order passed by the learned Appellate Authority is strictly in consonance with law and as the learned Rent Controller erred in fixing the fair rent, the Appellate Authority correctly intervened in the matter and by correctly applying the provisions of various Acts, including the provisions of the Transfer of Property Act, returned the findings in para 49 thereof. Learned Counsel also submitted that as in the present case, lease entered into between the parties had expired in the year 1994 and thereafter, no lease determining the rights and liabilities of the parties was entered, therefore, in these circumstances, learned Appellate Authority rightly referred to the provisions of the Transfer of Property Act while arriving at the findings which have been returned by it. Accordingly, he prayed that the petition being devoid of merit be dismissed.

10. I have heard learned Counsel appearing for the parties and carefully gone through the pleadings as well as documents appended therewith, including the order passed by learned Rent Controller and judgment passed by learned Appellate Authority. Record of the proceedings which were called upon by the Court has also been perused.

11. As already mentioned hereinabove, the petition was filed by the petitioner before learned Rent Controller under Section 4 of the 1987 Act for determination/fixation of the fair rent qua the demised premises. In para 3(a) of the rent petition, particulars of landlord were mentioned and in para 3(b) that of the tenant. Reply filed thereto by the respondent demonstrates that the status of the parties was not disputed by it. In other words, though the respondent had disputed the amount that was being claimed by the landlord as fair rent but the relationship of landlord and tenant was not disputed by either of the parties. In fact, a perusal of the response filed to the petition demonstrates that as per the tenant after the year 1994, various requests were made to the landlord to extend the lease or re-enter into a fresh lease, which was not done by the landlord, which otherwise stands denied by the landlord in rejoinder filed to the reply of the tenant. Be that as it may, this Court is not making any further observation in this regard. The petition under Section 4 of the H.P. Urban Rent Control Act culminated into an order passed by learned Rent Controller dated 15.11.2019, relevant portion whereof already stands quoted by me hereinabove. This order was challenged in appeal by the tenant. While deciding the appeal, learned Appellate Court, after referring to Section of 4 of the 1987 Act, as well as the judgment of the Hon’ble Supreme Court, in Ishwar Swrup Sharma vs. Jag Mohan Lal AIR 2001 SC 370 as well as in Atma Ram Properties (P) Ltd. vs. Federal Motors (P) Ltd. 1 SCC 705, went on to hold as under:-

43. As per the law said down by the Hon'ble Supreme Court, the tenancy does not get terminated according to general law Le. under T.P.A., but the tenancy terminates only on the passing of eviction order.

44. In this context section 116 of Transfer of Property Act provides as under:

"If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as speed in section 106."

45. This section provides that if lessee remains in possession of demised premises after the determination of lease and lessor accepts rent from the lessee, the lease shall be renewed from month to month according to the purpose for which the property is leased, in the absence of any agreement to the contrary. There is nothing on record to show an agreement which is contrary to invoking the principle of holding over.

46. In the present case also, after the efflux of time, the tenancy of the appellant is determined in the year 1994. But even after that, the respondent/lessor continued to accept the rent from the appellant/lessee. So the lease is renewed in favour of appellants by the principle of holding over provided in section 116 of Transfer of Property Act.

47. So in these circumstances, when the tenancy can be terminated only after passing of the order of eviction and also there is renewed lease in favour of the appellant under Section 116 of Transfer of Property Act, I am of the view that the fair rent of the premises is required to be fixed at percentage basis and not at prevailing market rent in the locality.

48. It is clear from the Ex. DX that tenancy was renewable up to 1994 at the monthly rent of Rs.1313/-.

49. So the fair rent, after taking the agreed rent as basis as under:-

1. 1.10.1994 to 1.09.1999, Rs.1313 per month.

2. 1.10.1999 to 1.09.2005, Rs.1313+10% of Rs.1313 1313+131.3-Rs.1444.3.

3. 1.10.2005 to 1.10.2010, Rs.1444.3+10% of Rs.1444 = 1444.3+144.3=Rs.1588.6.

50. The fair rent of the premises is Rs.1,588.6 per month on the date of filing of the application. The findings of the Id. Trial court are not correct. So point no.1 is answered in affirmative.”

12. Section 2(j) of the H.P. Urban Rent Control Act, 1987 defines the tenant as any person by whom or on whose account rent is payable for a residential or non-residential building or rent land and includes a tenant continuing in possession after termination of the tenancy.

13. Section 4 of the H.P. Urban Rent Control Act deals with determination of standard rent. It inter alia provides that the Controller shall, on application by the tenant or the landlord of a building or rented land, and after holding such enquiry, as he may think fit, fix the standard rent for such a building or rented land etc.

14. Section 5 of the H.P. Urban Rent Control Act, 1987 provides for revision of standard rent in certain cases.

15. Thus, as per Section 2(j) of the H.P. Urban Rent Control Act, a person, who initially is a tenant and whose tenancy stood terminated, still continues to be a tenant if he is continuing in possession of the tenanted premises. Now, if we read the provisions of Section 2(j) of the Act harmoniously with Section 4 of the Act, there is no bar that such a person in his capacity as a tenant, besides the landlord, cannot approach the controller for determination of the fair rent.

16. Coming to the facts of this case, here it was the landlord, who approached the Rent Controller for determination/ fixation of fair rent and whose application was decided by Rent Controller in terms of order dated 15.11.2019. That being the case, when the tenant had approached the Appellate Authority, feeling aggrieved by the order passed by learned Rent controller, this Court is of the considered view that the Appellate Authority ought to have had determined/adjudicated the appeal on the basis of grounds which were raised before it and not on extraneous considerations and by applying the law which had no application as far as the adjudication of the appeal was concerned. As there is no dispute that the respondent herein falls within the definition of ‘tenant’ and that the Rent Controller was having the statutory right to pass order on an application filed before it either by the tenant or the landlord for determination of fair rent, all that the Appellate Authority was to do, was to adjudicate the appeal within the parameters of the statutory provisions of the H.P. Urban Rent Control Act, 1987 and there was no occasion for it to traverse this Act and fall back on the provisions of the Transfer of Property Act as the issue that was raised before the Rent Controller and which stood determined by the Rent Controller, was falling strictly within the statutory parameters that are provided under the H.P. Urban Rent Control Act, 1987, which is a Special law.

17. Therefore, in view of the above observations, this petition is allowed. The judgment dated 01.04.2022, passed by learned Appellate Authority in Rent Appeal No. 01 of 2021, titled as Oriental Insurance Company Ltd. vs. M/s Prem Sagar and Sons, is set aside and the matter is remanded back to the learned Appellate Authority with the direction that the appeal be decided strictly as per law, on the basis of grounds raised therein, as expeditiously as possible and preferably within a period of two months from today. It is clarified that this Court has not made any observation as far as merit either of the order passed by learned Rent Controller or of the grounds raised in the appeal are concerned. Registry is directed to forthwith return the record of the learned Courts below. Parties through their respective Counsel are directed to appear before the Court of learned Appellate Authority on 27.05.2024. Interim, if any, to remain in force till the parties appear before the learned Appellate Authority.

Pending miscellaneous application(s), if any, also stand disposed of accordingly.

Petition allowed.

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