KRISHNA DEVI GANERIWALA Vs. DHAN RAJ SINGH

JUDGEMENT

(1.) The appellant owned a big hall at Kashmere Gate, Delhi, which was built in 1924. In about 1963 it was renovated and by putting up partition walls it was converted into 23 shops and let out to respondents and others at Rs. 80 per month. Respondent sued for fixation of standard rent which was fixed at Rs. 45.00. The order was upheld in appeal and appellant filed second appeal in High Court claiming that the shops were a,new construction and were exempt from the fixation of standard rent U/S 6 (2) (b) of the Rent Act and if not then standard rent should have been fixed U/S 6 (1) (B) (2) (b) and not U/S 9 (4) of the Act. After reciting S. 6 (2) (b) and S. 7 (I , the judgement proceeds ;

(2.) The increase of rent permitted by section 7(1), is in excess of the standard rent as defined in section 6. The scheme of the section is that with respect to properties constructed and let out prior to 2nd June, 1944, the rate at which they were let out, would subject to the additions calculated according to the second schedule of the Act, constitute the standard rent, but if any rent has been determined under the previous Rent Acts of 1947 and 1952, an increase of certain percentage has been permitted. Section 6 (1) (b) provides that in any other case the reasonable cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction would form the basis on which the rent would be calculated at a percentage provided in the statute. However, in respect of the premises that are constructed after 2nd June, 1951 but before 9th June, 1955 or after 9th June, 1955 the operation of the standard rent has been given a holiday, as is popularly known, for a specified period of 5 or 7 years. In this case the finding of the Additional Rent Controller as well as the Tribunal is that a large hall has been converted into 23 shops by putting up partition walls without any alteration in the roof or flooring or the main walls supporting the building. The newly let out shops are certainly not the same premises as each has been separately let for use and is distinct from the letting of the old building : See Sadhu Singh Vs. District Board, Gurdaspur 1962. P.L.R. 1 and M/s Sant Ram Des Raj Vs. Karam Chand 1962. P.L.R. 758. This, however, logically does not lead to the conclusion that because the premises are not the same they are necessarily newly constructed. The reference to newly constructed in section 6 partakes of the characteristics of its being a building or part of a building and, therefore, the building or part of the building must be newly constructed.

(3.) In the coatext of Section 6, I agree with the counsel for the appellant that construction would include re-construction and in legal effect, there is no difference between construction and re-construction for purposes of this Act which is distinct from the definition of the expression contained in the Delhi Municipal Corporation Act. Between the buildings which have been entirely constructed or re-constructed from the very foundations to the buildings which have merely been repaired or improved, there is a large variety of cases where structural alterations have been made or improvement or additions have been made, meriting increase in the standard rent under Section 7, but under what circumstances can it be called that a building is newly constructed ? Meggary in Rent Acts 10th Edition at page 114 has observed that if a house is subjected 10 substantial structural alteration, it becomes a new and separate dwelling house by reason of change of identity and then the new premises sheds all the attributes of the old. But to fall under this head, there must be something fundamental transforming the general structural character of the house as an entire entity ; the change must be more radical than mere improvements or structural alterations or mere functional change of making one dwelling into two. It has also been observed that the court must be astute to see that the landlord is not evading the restrictions upon increases of rent imposed by the statute by a small and possibly colourable alterations of the structure, or by a mere sub-division of the tenement. The House of Lords in Capital and Provincial Property Trust Vs. Rice 1952. AC. 142 observed on page 152 that the line of demarcation (between the premises which have changed their identity) has been plainly established ; there must have been some structural alterations before the dwelling can be said to change its identity and become a new entity. In the facts of the case Lord Porter observed that on the blocking of the connecting door a new flat came into existance which was different from the whole or part, but this was not found sufficient to establish the change of identity of the property. In an earlier decision Longford Property Company Ltd. Vs. Batten 1951. A.C. 223 Lord Radcliff observed on page 240, that two main causes must be responsible for change of identity-one is a physical change brought about by improvement or structural alteration of the premises and the other is alteration of the subject matter by including in a subsequent letting more than was previously let or, alternatively, by excluding some part formerly devised. Mere improvements or structural alterations do not constitute change of identity, but a certain percentage is allowed to the landlord upon the amount of expenditure on the improvements or structural alteration. Therefore, some change more radical than the mere fact of improvement or structural alteration must take place before it can be said that in effect the dwelling house newly let had previously not been let. The noble Lord observed that there was no simple general rule to provide an answer and in substance it remained a question of fact to be ascertained by the Court on the facts and circumstances of the case.