ORDER
1. The question which is res integra is whether the market value of the site is includible in the total cost of the building in fixing fair rent under Sec. 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, for brevity the Act, when the landlord is the owner not of the site, but only of the building.
2. In this revision, the tenant assails the fair rent fixed by the Rent Controller (VIII Judge, Small Cause Court, Madras) in R. C. O. P. 1644 of 1983 and affirmed by the appellate authority (IV Judge, Small Cause Court, Madras), in R. C. A. 829 611984 at Rs. 510 per month. The only point urged by the learned counsel for the tenant is that as the landlord is only a lessee of the site Kalikambal Kamateswara Devastanam but not the owner, the market value of the site should not be included in the total cost of the building. This requires examination of Sec. 4 of the Act.
'4. Fixation of fair rent (1) The Controller shall on application made by the tenant or the landlord of a building gland after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in the following subsections.
(2) The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building.
(3) The fair rent for any non-residential building shall be twelve per cent gross return per annum on the total cost of such building.
(4) The total cost referred to in sub-sec. (2) and sub-sec. (3) shall consist of the market value of the site in which the building is constructed, the cost of construction of-the building and the cost of provision of any one or more of the amenities specified in Schedule 1 as on the date of application for fixation of fair rent:
Provided that while calculating the market value of the site in which the building is constructed, the Controller shall take into account only that portion of the site on which the building is constructed and of a portion up to fifty per cent thereof of the vacant land, if any, appurtenant to such building the excess portion of the vacant land, being treated as amenity:
Provided further that the cost of provision of amenities specified in Schedule I shall not exceed-
(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 site in which the building is constructed, and the cost of construction of the building as determined under this section.
(5)(a) The cost of construction of the building including cost of internal water supply, sanitary and electrical installations shall be determined with due regard to, the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned. The Controller may, in appropriate cases, allow or disallow an amount not exceeding thirty per cent of construction having regard to the nature of construction of the building.
(b) The controller shall deduct from the cost of construction determined in the manner specified in clause (a), depreciation calculated at the rates specified in schedule II'
The provision as it reads will not support the above argument. Indeed, there is nothing in the Act to indicate that the landlord should own the building as also the site; on the other hand, it is so plain that the fair rent is fixed for the building alone. But such fixation should be in accordance with the principles, set out in the sub-sections. It is pertinent to notice that only in sub-section (4) of S. 4 there is reference to the site. It may be useful to notice that save in sub-section (4) of S. 4, other provisions in the Act and the rules make no reference to the site.
3. It is equally essential at this stage to notice the object of, and the scheme behind, the Act. They are to amend and consolidate the law relating to the regulation of letting in of residential and non-residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants there from in the State of Tamil Nadu. Thus, the Act is concerned with the buildings alone, but not the site on which the buildings are constructed. All these will point out in no unmistakable terms that while fixing the fair rent, the market value of the site on which the building is constructed, should also be, included in arriving at the total cost of the building for the simple reason that without the site, a building cannot exist. Again, I must point out that title to the site or building is alien to the Act, I have already referred to the fact that save section 4, neither in the provisions of the Act nor in the rules is there any reference to the site. In particular, it is relevant to notice the definition of building, landlord and tenant. Section 2(2) defines 'Building':
'Building means any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes and includes-
(a) the garden, grounds and outhouses, if any, appurtenant to such building, hut or part of such building or hut and let or to be let along with such building or hut,
(b) any furniture supplied by the landlord for use in such building or but or part of a building or hut, but does not include a room in a hotel or boarding house:
Section 2(6) defines landlord:
'Landlord includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account or on behalf of another or on behalf of himself and others or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant;
Explanation. - A tenant who sublets shall be deemed to be a landlord within the meaning of this Act in relation to the sub-tenant'.
Section 2(8) defines tenant:
'Tenant means any person by whom or on whose account rent is payable for a building and includes the surviving spouse, or any son, or daughter, or the legal representative of a deceased tenant who-
(i) in the case of a residential building, had been living with the tenant in the building as a member of the tenant's family up to the death of the tenant, and
(ii) in the case of a non-residential building, had been in continuous association with the tenant for the purpose of carrying on the business of the tenant up to the death of the tenant and continues to carry on such business thereafter, and
'Person continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building by its tenant or a person to whom the collection of rents or fees in a public market, cart-stand or slaughterhouse or of rents for shops has been farmed out or leased by a municipal council or a pinhead union council or the municipal Corporation of Madras.
Thus, it is patent that the landlord for the purpose of the Act need not be the owner of the building. For instance, to a sub-tenant his landlord is the chief-tenant of the building: in other words, a tenant under the Act has no concern about the title of his landlord even to the building. Again, in a case where the trespasser happens to be the landlord of the building, can it be said in such a case that the landlord is neither the owner of the building nor of the site and therefore in fixing the fair rent, the market value of both the site and the building should be excluded? If the above argument were to be accepted, the landlord cannot claim rent at all from the tenant. So too in a case where the owner of a building lets it out at a lower rate to his tenant, is the sub-tenant entitled to contend that the fair rent should he the rent paid by the chief tenant or that because the chief-tenant is neither the owner of the building nor the site, he cannot claim any rent from the tenant? My considered answer will be in the negative and against the tenant. For, what is contemplated in S. 4 is to arrive at the total cost of the building; while arriving at the total cost of the building, The section mandates that the market value of the site on which the building is constructed should also be taken into consideration. By way of completion, it has to be pointed out that even the appurtenant land has to be taken into account while assessing the total cost of the building - see proviso to sub-section (4) of S.4.
4. It is useful to recall the counterpart of S. 4 in the predecessor Act 1(Tamil Nadu Act XXV of 1949). S. 4 in Tamil Nadu Act of 1949 runs as follows:-
'4(l) The Controller shall, on application by the tenant or landlord of a building, fix the fair rent for such building after holding such inquiry as the Controller thinks fit.
(2) In fixing the fair rent under this section the Controller shall have due regard-
(a) to the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months prior to the 1st April, 1940;
(b) to the rental value as entered in the property tax assessment book of the municipal council, local board or the Corporation of Madras, as the case may be, relating to the period mentioned in clause (a);
(c) to the circumstances of the case, including any amount paid by the tenant by way of premium or any other like sum in addition to rent after the 1st April, 1940.
(3) In fixing the fair rent of residential buildings, the Controller may allow-
(i) if the rate of rent or rental value referred to in sub-sec. (2) does not exceed Rs. 25 per mensem, an increase not exceeding 1/3 per cent on such rate or rental value:
(ii) if the rate of rent or rental value exceeds Rs. 25 per mensem but does not exceed Rs. 50 per mensem, an increase not exceeding 12 1/2 per cent on such rate or rental value;
(iii) if the rate of rent or rental value exceeds Rs. 50 per mensem, an increase not exceeding 25 per cent on such rate or rental value;
Provided that in the case of a residential building which has been constructed after the 1st April 1940, the percentage of increase shall not exceed 25, 371/2 and 50 respectively.
(4) In fixing the fair rent of non-residential buildings, the Controller may allow-
(i) if the rate of rent or rental value referred to in sub-section (2) does sot exceed Rs. 50 per mensem, an increase riot exceeding 371/2 per cent on such rate or rental value;
(ii) if the rate of rent or rental value exceeds Rs. 50 per mensem, an increase not exceeding 50 per cent on such rate or rental value:
Provided that in the case of a nonresidential building which has been constructed after the 1st April, 1940, the percentage of increase shall not exceed 50 and 100 respectively.
(5) In the case of a building for which the fair rent has been fixed before the 1st October 1946, the Controller shall on the application of the landlord allow such increase in the fair rent as in the opinion of the controller, the landlord is entitled to under this section'.
This will show that a different basis was contemplated by the predecessor Act in the fixation of fair rent. Even that act did not contemplate that the landlord should own either the building or the building and the site. Thus in my anxious consideration, the fair rent has to be fixed on the basis of total cost of the demised building; according to the plain meaning of sub-section (4) of S. 4 of the Act, such total cost will include not only the market value of the site in which the building is constructed, but also the cost of construction of the building besides the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent, irrespective of the fact whether the landlord is the owner of the building alone.
5. About the two decisions, viz.. Sherwood Education Society v. Hussainy Begam Namazie. (1985) 98 Mad LW 213 and Rajavelan v. Parasuram Iyer, (1970) 83 Mad LW 524 cited by the learned counsel for the petitioner, straightway I have to point out that the question as posed before me did not fall for consideration in the above cases. In Sherwood Education Society v. Hussainy Begam Namazie, (1985) 98 Mad LW 213, Mr. Justice Gokulakrishnan as he then was, held that in computing the fair rent for a building under Tamil Nadu Act 18 of 1960, it is not correct to include within the term 'building' the superstructures constructed by a tenant 'after the letting, and the area of the land on which the tenant has raised the super structure, and evaluate for arriving at the total cost referred to in S. 4(3)(a). The learned Judge simply followed the decision of Mr. Justice Ramaprasada Rao as he then was in Rajavelan v. Parasuram Iyer, (1970) 83 Mad LW 524. According to Mr. Justice Ramaprasada Rao the word 'building' and the word 'constructed' obviously refer to the building constructed by the landlord and not the superstructures to be constructed by the tenant after letting and that it cannot be said that the land on which the tenant has raised superstructures for his convenient enjoyment or otherwise ought also be reckoned and evaluated for purpose of fixing the total cost referred to in section 4(3)(a) of the Act. A careful reading of the said decision will disclose that the learned Judge was construing S. 4 of the Act before it underwent an amendment in 1973 by S. 6 of Amending Act 26 of 1973. It is important to notice that the whole S. 4 has undergone a change by virtue of the said Amending Act. Before amendment. S. 4 of the Act ran as follows:-
'4. Fixation of fair rent.- (1) The Controller shall, on application by the tenant or the landlord of a building and after holding such inquiry as the Controller thinks fit fix the fair rent for such building in accordance with the principles set out in sub-section (2) or in sub-section (3), as the case may be, and such other principles as may be prescribed.
(2) (a) The fair rent for any residential building shall be at six per cent gross return per annum on the total cost of such building.
(b) The total cost referred to in clause (a) shall consist of (i) the cost of the construction as calculated according to such rates for such classes of residential buildings as may be prescribed less the depreciation at such rates as may be prescribed;
(ii) the market value of that portion of the site on which the residential building is constructed: and shall include such allowances as may be made for considerations of locality in which the residential building is situated, features of architectural interest, accessibility to market, dispensary or hospital, or nearness to the railway station or educational institution and such other amenities as may be prescribed :
Provided that such allowances shall not exceed ten per cent of the cost of construction as calculated in the manner specified in sub clause (i). (3) (a)
The fair rent for any non-residential building shall be at nine per cent of gross return per annum on the total cost of such building.
(b) The total cost referred to in clause (a) shall consist of-
(i) the cost of construction as calculated according to such rates for such classes of non-residential buildings as may be prescribed less the depreciation at such rates as may be prescribed;
(ii) the market value of that portion of the site on which the non-residential building is constructed;
and shall include such allowances as may be made for considerations of locality in which the non-residential building is situated, features of architectural 1 interim accessibility to market, nearness to the railway station and such other amenities as may be prescribed and of the purpose for which the nonresidential building is used :
Provided that such allowances shall not exceed twenty-five per cent of the cost of construction as calculated in the manner specified in sub-clause (i) ''.
It is thus clear that under section 4 before it underwent an amendment by Act 23 of 1973, the total cost of a building consisted of the cost of construction and the market value of that portion of the site on which the residential building is constructed and shall include such allowances as may be made for considerations of locality in which the residential building is situated, features of architectural interest, accessibility to market, dispensary or hospital, nearness to the railway station or educational institution and such other amenities as may be prescribed (Emphasis by me) (Emphasis not given in original- Ed.) Even with reference to a non-residential building, the total cost of the building included the cost of construction and the market value old that portion of the site on which the non-residential building is constructed. Thus, S. 4 before it underwent an amendment, did not take into consideration the appurtenant land. Further, it is pertinent to recall that in Rajavelan v. Parasuram Iyer. (1970) 83 Mad LW 524, the facts are that under the lease deed, the tenant was permitted to put up at his own cost any superstructure or building in the vacant ground of the leased premises without in any way affecting or touching the non-residential building let out by the landlord to the tenant and on termination of tenancy, the tenant had the option to remove such constructions put up by him, but if he failed to remove the same within six months from the termination of tenancy, the said structures or building shall become the property of the landlord. Thus, the ratio laid down in the said decision had to be understood on the facts in that case and on the interpretation of S. 4 as it then was. In the latter case, it is pertinent to notice that the rent control proceeding was instituted after the Amending Act 23 of 1973, as is obvious from the reference No. H. R. C. 1856 of 1979. The fact that S. 4 underwent an amendment by the Amending Act 23 of 1973 was apparently not brought to the notice of Mr. Justice Gokulakrishnan as he then was in Sherwood Educational Society v. Hussainy Begum Namazie, (1985) 98 Mad LW 213 With great respect to the learned Judge, I am constrained to say that the ratio laid down in Sherwood Educational Society v. Hussainy Begum Namazie, (1985) 98 Mad LW 213 may not be good law. As a matter of fact, the learned Judge has only referred to the unlamented provision, viz., S. 4(3)(a) as noticed by Mr. Justice Ramaprasada Rao in the other case. Further take a case where the tenant had no permission to put up a building in the appurtenant land, hut then he puts up a building in the appurtenant land. Can it be then said that the landlord will not be entitled to claim the cost of the land as it forms part of the total cost of the building within the meaning of S. 4 of the Act? According to the ratio laid down in Sherwood Educational Society v. Hussainy Begum Namazie, (1985) 98 Mad LW 213, the landlord will not be entitled to claim the value of the appurtenant land as amenity albeit the proviso to S. 4(4) of the Act. This will demonstrate that a tenant wrong-doer will be crowned with an advantage for the wrong done to his landlord. The law is quite clear that no person can take advantage of his own wrong and claim a right on that basis. Secondly, the ratio in (1985) 98 Mad LW 213, is opposed to the very provision, viz, the proviso to sub-sec. (4) of Sec. 4 of the Act. Thus, neither the decision in Rajavelan v. Parasuram Iyer, (1970) 83 Mad LW 524, nor Sherwood Flectional Society v. Hussainy Begum Namazie, (1985) 98 Mad LW 213 will be of any assistance to the learned counsel for the petitioner.
6. In the rest, the civil revision petition fails and is dismissed, but in the peculiar circumstances without costs.
7. Petition dismissed.