Whether rent of a building includes charges paid towards fixtures and fittings?

Point of dispute in the instant matter was applicability of UP Rent Act of 1972. The tenancy was terminated after service of termination notice under Section 106 of the Transfer of Property Act. The trial court had decreed the Court holding that the tenancy was validly terminated.

The major point of difference was the amount of rent – tenant claimed it to be below Rs. 2000/- whereas landlord claimed to be above. This amount was the line diving applicability of Rent Act and Transfer of Property Act.
The rent receipts proved in the instant matter included payment towards house, water, sewer tax etc. and rental towards fixtures and fittings and sum amount was well above the above cap and the receipts thus clearly indicated the lump sum amount paid towards rent without any bifurcation of the amount towards house, water and other taxes or towards rent of fixtures and fittings.

It was held that even as a matter of common knowledge fixtures and fittings generally form part of the building and are not separable from it. Premises cannot be let out without its fixtures and fittings and the rent of the premises let out includes all fixtures and fittings unless specifically separated. Therefore, the rent of a building ordinarily includes charges, if any, paid towards fixtures and fittings. Rent is the consideration paid for use and occupation of property and in broader sense, it is the compensation or fee paid, usually periodically, for the use of the rented property, land, buildings, equipment and the like.

IN THE HIGH COURT OF ALLAHABAD

Civil Revision No. 265 of 2012

Decided On: 12.11.2014

Appellants: Baleshwar Singh
Vs.
Respondent: K.P. Singh

Hon'ble Judges/Coram:Pankaj Mithal, J.

1. This is a revision under Section 25 of the Provincial Small Causes Court Act, 1887 (hereinafter referred to as the Act) against the judgment, order and decree dated 16.9.2008 passed by the Additional District Judge exercising powers of the small causes court in SCC Suit No. 42 of 2003, K.P. Singh v. Baleshwar Singh.

2. The owner and the landlord of the premises No. 7/77-B, Raj Villa, Tilak Nagar, Kanpur now represented by his heirs and legal representatives instituted the above suit against the tenant/defendant-revisionist for his eviction from it after terminating his tenancy vide notice dated 1.7.2003 under Section 106of the Transfer of Property Act. The suit has been decreed by the court below holding that the tenancy has been validly terminated; there is no defect in the notice or its service and that the provisions of U.P. Act No. 13 of 1972 (hereinafter referred to as the Rent Act) are not applicable to the premises in dispute.

3. Sri B.P. Singh, Senior Advocate assisted by Sri A.N. Sinha and Sri Prateek Sinha, counsel for the defendant-revisionist contends that the court below has manifestly erred in law in excluding the premises in dispute from the purview of the Rent Act. In case the said Act is made applicable, the defendant-revisionist would not be liable for eviction and his tenancy would be saved under Section 20(4) of the Rent Act.

4. Sri A.D. Saunders, learned counsel appearing the respondents submits that at the time of institution of the suit the rent of the premises was more than Rs. 2000/- per month. Therefore, in view of Section 2(1)(g) of the Rent Act it was not governed by the said Act and the Court below has not fell in error in decreeing the suit.

5. The primary thrust of the argument of the parties is on the applicability of the Rent Act upon the premises in dispute.

6. The submission of learned counsel for the defendant-revisionist is that the finding about the rate of rent as returned by the court below is perverse. The evidence on record proves that the rent was less than Rs. 2000/- per month and that the court below by adding the rent paid in respect of the fixtures & fittings and all taxes treated it to be above Rs. 2000/-.

7. The finding with regard to the rate of rent and the applicability of the Rent Act upon the premises in dispute has been dealt with by the court below while deciding point No. 1 formulated by it.

8. The original tenant of the premises in dispute was Smt. Rajrani Devi, the mother of the tenant/revisionist. The revisionist became the tenant at her death in 1984. At that time the rent of the premises in dispute as per the rent note dated 31.1.1983 was Rs. 500/- per month plus Rs. 410 per month for fixtures & fittings and other amenities and Rs. 90/- per month towards water and house tax. Subsequently, various rent notes, paper No. 50-Ga to 53-Ga were executed and the last of them is said to have been executed on 31.1.1989 providing that the tenancy would be for a period of two years expiring in January, 1991 with the rent of Rs. 1210/- including rental towards accommodation, fixtures, fittings and amenities and water, sewer, drainage and house tax.

9. The tenancy of the defendant/revisionist as per the said rent note came to an end by efflux of time in January, 1991 but he continued to be in possession over the house in dispute even thereafter. The landlord, however, accepted the rent, thus converting the status of the defendant-revisionist into that of tenant by holding over. In other words, a new tenancy came into existence according to Section 116 of the Transfer of Property Act on month to month basis leaving the earlier terms and conditions of the tenancy meaningless.

10. The plaintiff-respondent filed affidavits and rent receipts supporting his pleadings in the plaint and the averments of the notice that the rent of the premises is Rs. 2,603/- per month. The rent receipts papers No. 23-Ga to 46-Ga were proved by him and in these receipts the rent of the premises in dispute has been mentioned as Rs. 2,570/- per month inclusive of house, water, sewer tax etc. and rental towards fixtures and fittings. The receipts No. 37-Ga to 46-Ga prove the rent to be Rs. 2603/- per month again inclusive of house, water, sewer tax etc. and rental towards fixtures and fittings. All these receipts are from July, 2002 to April, 2003 i.e. for the period just before the institution of the suit. The perusal of the said receipts demonstrates that it mentions the lump sum amount of the rent without any bifurcation of the amount towards house, water and other taxes or towards rent of fixtures and fittings. All receipts are consolidated receipts showing the total amount which has been received as rent including all taxes and rental for fixtures and fittings.

11. The son of the defendant/revisionist Shashi Bhushan Singh had filed his examination-in-chief on affidavit and in his cross examination admitted that the rent receipts which have been filed does not mention the rent of the accommodation, taxes and rent of fixtures and fittings separately and that the consolidated rent of Rs. 2603/- was sent by money order.

12. The defendant-revisionist in his cross-examination has accepted the evidence of his son Shashi Bhushan and the rent receipts on record to be correct and genuine.

13. Thus, the above evidence on record clearly prove that the consolidated rent of the premises in dispute was Rs. 2570/- and thereafter Rs. 2,603/- per month during the period immediately preceding the institution of the suit and none of the rent receipts establishes that the rent was only Rs. 500/- per month or less than Rs. 2,000/- p.m. or that the remaining amount was towards the taxes and fixtures & fittings.

14. The rent receipt paper No. 76-Ga also clearly proved that the monthly rent of the premises in dispute including all taxes, fixtures and fittings was Rs. 2,603/- only.

15. It is not the case of the defendant-revisionist that the rent of the premises in dispute and the other charges towards taxes and fixtures and fittings were being paid by him separately, rather the evidence, specially the cross-examination of Shashi Bhushan Singh and rent receipts prove that the entire consolidated amount was being paid as rent on monthly basis, meaning thereby that the defendant-revisionist accepted the taxes and the amount towards fixtures and fittings to be part of the rent.

16. It is common knowledge that the fixtures and fittings generally form part of the building and are not separable from it. A premises cannot be let out without its fixtures and fittings and the rent of the premises let out includes all fixtures and fittings unless specifically separated. Therefore, the rent of a building ordinarily includes charges, if any, paid towards fixtures and fittings.

17. Rent is the consideration paid for use and occupation of property. In a broader sense, it is the compensation or fee paid, usually periodically, for the use of the rented property, land, buildings, equipment and the like.

18. In P.L. Kureel Talib Mankab v. Beni Prasad and another MANU/UP/0087/1976 : A.I.R. 1976 Allahabad 362 it has been said that it is an established proposition that 'rent' includes not only what is ordinarily described as 'rent' but also payment in respect of special amenities provided by the landlord. Rent includes all payments agreed by the tenant to be paid to the landlord for the use and occupation not only of the building but also of furnishing, electric installation and other amenities.

19. In Karnani Properties Ltd. v. Miss Augustine and others MANU/SC/0084/1956 : A.I.R. 1957 SC 309 it has been observed that 'rent' is comprehensive enough to includes all payments agreed by the tenant to be paid to the landlord for the use and occupation not only in respect of the building and its appurtenances but also of furnishings, electric installations and other amenities agreed between the parties to be provided.

20. In Virendra Kumar Pandey v. Special Judge, Ghaziabad 1997 JRJ (Alld) 176 a learned Single Judge of this Court while dealing with the term 'rent' held that where "electrical charges" are paid by the tenant along with the rent it may form part of the rent if there is no agreement to the contrary. Thus, where water tax and electrical charges are paid together with the rent, they shall be part of the rent.

21. In view of the above decision, as in the present case taxes and charges towards fixtures and fittings were being paid together with rent, they will form part of the rent. Accordingly, the rent of the premises in dispute has rightly been determined to be above Rs. 2000/- per month. There is no flaw in the finding recorded by the trial court in this regard and in holding that the Rent Act is not applicable to the premises in dispute in view of Section 2(1)(g)of the Rent Act.

22. The other submission of learned counsel for the defendant-revisionist is that the provision of Section 2(1)(g) of the Rent Act was introduced vide U.P. Act No. 5 of 1995 w.e.f. 26.9.1994 and it would not apply to the tenancy which had commenced earlier.

23. The argument is bereft of any merit. The suit was instituted in the year 2003 when the aforesaid provision was very much in existence. As soon as the aforesaid provision was introduced, as the rent of the premises in dispute was more than Rs. 2000/- per month it automatically went out of the purview of the Rent Act irrespective of the date of commencement of the tenancy. Therefore, the question of applying it retrospectively does not arise. Moreover, the provisions of the Act are applicable to the building rather than to the tenancy.

24. In view of the aforesaid facts and circumstances, there is no merit in this revision.

25. Learned counsel for the defendant-revisionist had informed that the defendant-revisionist is an old aged man of 90 years and it would be very harsh to force him to shift from the premises in dispute at this juncture.

26. The law howsoever harsh is law and has to be applied as to do justice between the litigating parties. The defendant-revisionist cannot escape from his eviction on the ground of personal difficulty but on equitable consideration six months' time is allowed to him to vacate the premises in dispute provided he files a personal undertaking on affidavit before the court below within a period of one month from today that he will vacate and handover peaceful possession of the premises in dispute to the plaintiff-respondent on or before the expiry of the above period.

27. The revision is dismissed.

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