CHAPSI UMERSI Vs. KESHAVJI DAMJI

JUDGEMENT

(1.) This suit relates to a godown situated on the ground floor of a house at Mandvi belonging to one Keshavji Damji. On the 28th of September 1916, an agreement Was entered into between Keshavji Damji and the plaintiffs for a lease of this godown for twenty three months, to Keshavji commence from 25th December 1916. At this time the building was being reconstructed and the ground floor was expected to be ready in December and so the lease was made to commence from 25th December. The godown, however, became ready in February 1917, and the plaintiffs commenced paying rent from 22nd February 1917. The plaintiffs sub-let the godown to the defendants for Bs. 275 per month as from the 22nd of February 1917 and the defendants entered into possession on that date. The plaintiffs never themselves entered into possession except through their sub- tenant, the defendants. The defendants commenced paying rent to the plaintiffs from the 22nd February 1917. The defendants paid the said rent of Rs. 275 up to 12th March 1918, but thereafter they refused to pay the stipulated rent and contended that Rs. 110 was the standard rent which, under the Rent Act, they were liable to pay. The defendants paid Rs. 1,474 as rent at the rate of Rs. 110 up to the 27th July 1919 which the plaintiffs took under protest. The plaintiffs claim in this suit Rs. 5,401, being the rent at the rate of Rs. 275 per month from 13th March 1918 to 20th March 1920 after giving credit for Rs. 1,474 paid as aforesaid by the defendants, and claim further rent at Rs. 305 per month, contending that that is the standard rent of the premises. By their letter of 14th February 1920, the plaintiffs had given notice to the defendants that they would claim, from March 1920, Rs. 305 from the defendants as the standard rent. The only issue in the case is, " What is the standard rent the defendants are liable to pay ?"

(2.) It appears that Keshavji Damji, the owner of the premises, tiled a suit against the present plaintiffs, in the Small Cause Court, to recover rent at the rate of Rs, 305 per month, for four months, from 13th March 1918 to 8th July 1918. The present plaintiffs contended in the said suit that Rs. 305 was not the standard rent, but the Small Cause Court held against the present plaintiffs that Rs. 305 per month was the standard rent and awarded the same. The said decree was confirmed by the Full Court of the said Court. The said Keshavji Damji instituted another suit against the present plaintiffs in the High Court, being Suit No. 2974 of 1919, to recover rent for thirteen months, subsequent to the 8th of July 1918, at the rate of Rs. 305 per month. The present plaintiffs had in that suit to submit to a decree for rent at that rate. In the present suit defendants in their written statement alleged that the Keshavji proceedings in the Small Cause Court and the High Court were collusive and that in any event they were not bound by the results of those suits. These charges of collusion were, in the course of the trial, abandoned.

(3.) One Narandas Mathuradas was, in January 1916, in occupation of the space comprised within the godown in suit as a tenant, and ho was then paying Rs 100 as rent as shown by the rent bill, dated 17th January 1916, produced by him (Ex. 4), but it is contended that the godown in suit is not the premises that were in the occupation of the said Narandas on the 1st of January 1916, but to all intents and purposes, it is new premises, and, therefore, the statutory standard rent must be taken to be the rent at which it was first let. The godown in suit is on the south, and there is another godown on the north which is now occupied by the said Narandas. It appears that Keshavji purchased the building on the ground floor of which the godown in suit is situated, in July 1915, in partnership with one Bhimji. Bhimji s interest was bought by Keshavji who, thereupon, became full owner in September 1915. When Keshavji bought the building, it was in a very dilapidated condition, and there were no tenants on the four upper floors and, except the godown on the ground floor, the building was unoccupied. Keshavji paid for this building Rs. 73,000. He was advised by his architect, Karani, to reconstruct the building, and he appears to have expended on such reconstruction Rs. 95,000. The rateable value of the old building, when Keshavji bought it, was Rs. 3,785, and the rateable value, now assessed by the Municipality, of the reconstructed building, is Rs. 18,381. The original building stood on 544 square yards of laud, and in the reconstructed building further 86 square yards of adjoining land, which was vacant and which belonged to Keshavji, were added. Three different applications were submitted to the Municipality at different times for reconstructing different portions of the building. These applications were submitted, under Section 342 of the City of Bombay Municipal Act, apparently in order to avoid the set-back and other requisitions which would have been made by the Municipality if the application had been in form for the construction of a new building under Section 337 of the City of Bombay Municipal Act, The work was begun in March or April 1916, the work on the ground floor was finished in February 1917, and the work on the whole of the building was finished in the beginning of 1918. The evidence of Karani, the architect, which I accept, makes it clear that the net result of the operations that he carried out has been to put up, for all practical purposes, a new building in place of new old building, and, if so, the portion let to the defendants, namely, the godown in suit, is a part of the new building. The whole building was practically re-walled, re-floored, and re-roofed, and a new Chowk to bring in more light and air was made. Free ventilation has been provided, and access to the D Souza Street has been given. Most of the old beams and joists were removed and new ones put in, and one can fairly say that there was now a new building. Taking the godown itself, the west and north walls are new. A large proportion of the posts, beams and joists in the godown are new, and the ceiling is also practically new. The floor of the godown has been re-laid. The present godown has more light and air than the old one, and has now access into the D Souza Street over the Otla constructed on the 36 square yards of the land added to the building. If, then, the premises in suit were not the premises that were let to Narandas on 1st of January 1916, the rent then paid by him cannot be regarded as the standard rent for the godown in suit. The standard rent is the rent at which these new premises were first let after the 1st of January 1916. They were so let by Keshavji Damji to the present plaintiffs at the rent of Rs. 305 per month. But it is contended that, assuming that these are new premises and they were not let on the 1st of January 1916, the letting by the plaintiffs to the defendants at Rs. 275 per month should be taken, as between them, as the rent at which the premises were first let, after the 1st of January 1916, within the meaning of Section 2(a)(ii) of the Bombay Rent (War Restrictions) Act. This involves the contention that there can be different standard rents for the same premises as between different individuals, and that, while the standard rent between Keshavji and the plaintiff s for these premises may be Rs. 305 per month, the standard rent as between the plaintiffs and the defendants is Rs. 275. This contention is based on the definition of the expressions landlord and tenant in the Rent Act. Landlord , according to the definition, includes a tenant who sub-lets any premises, and the expression tenant includes a sub-tenant. The argument is that, as between a tenant who is a landlord according to this definition and his sub-tenant who is regarded as tenant for this purpose, the letting to be looked to is the letting by the tenant to the sub- tenant. The only object to my mind of including in the definition of landlord a tenant, and in the definition of tenant a sub-tenant, is to extend the benefits of the Rent Act to sub-tenants, but I do not think that it was intended that the standard rent was to be determined by different standards between the original landlord and the tenant and between the tenant and the sub-tenant. Otherwise, the tenant, while himself getting the advantage of the Rent Act, would be able to profiteer as between himself and the subtenant. Supposing a tenant took certain premises in 1917 for a monthly rent of Rs. 200 and then sub-let them for Rs. 300 to another person, after the coming into operation of the Rent Act, he would be entitled to claim that he was liable to pay only the rent at which the premises were let on the 1st of January 1916 which, let us suppose, was Rs. 100 a month, while the sub-tenant would be obliged to pay to him Rs. 800 that being the rent at which the premises were first let after the 1st of January 1916 as between them. In Section 2(a)(i) standard rent in relation to any premises is defined as the rent at which the premises were let (not sub-let) on the 1st of January 1916. With reference to premises that were or shall be first let after the 1st of January 1916, standard rent is the rent at which they were or shall be first let (not sub-let). Standard means a rule or a model and can only be one. The whole object of the Rent Act is to prevent tenants being made to pay rent which the Legislature considers excessive or unreasonable. In regard to the same premises, rent which the law regards as unreasonable or excessive between the original landlord and tenant ought not to be regarded as reasonable between the tenant and the subtenant. Similarly, rent which the law regards as reasonable between the original landlord and tenant ought not to be regarded as unreasonable between the tenant and the sub-tenant. Standard rent must, I think, mean the rent at which the premises were originally let. The standard rent is to be fixed in relation to premises and not in relation to persons, and can, therefore, be only one and not varying as between different individuals. In the case of King v. York [1919] W.N.K.B. 59 the Court of Appeal in dealing with the provisions of the Increase of Rent & Mortgage Interest Act, 1915, said :-" The Act applied to houses, not to persons. The Act operated in rem, not in personam. It stereotyped the rent of a house". The present case is no doubt somewhat peculiar, because the original tenants (the plaintiffs) took the premises at a rent of Rs. 305 per month and sub- let them to the defendants at a reduced rent of Rs. 275. Such cases will always be rare : ordinarily there will be cases of sub tenants taking premises at an enhanced rent or the same rent as the tenant is paying. If the standard rent in relation to these premises is Rs. 305, being the rent at which they were first let after 1st of January 1916, then the defendants are liable to pay that rent. There will be a decree for the plaintiffs as prayed with costs and interest on judgment at 6 per cent.