REPORTABLE  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1237 OF 2004

Trust Jama Masjid Waqf No. 31 …. Appellant  

Vs.

M/s Lakshmi  Talkies and Ors.              …  Respondents  

WITH

CIVIL APPEAL NO. 6175 OF 2004

JUDGEMENT

R.M. Lodha,J.  

   These two appeals  are  directed  against  the  judgment  

and order dated September 10, 2003  passed by the High Court of  

Judicature at Allahabad.  The High Court by that  order modified  the  

order  of  Rent  Control  and  Eviction  Officer,  Mathura  (for  short,  

1

‘RCEO’) dated March 13, 1991 and fixed the rent of the subject  land  

at  Rs. 2500/- p.m.  w.e.f. June 1, 1984 instead of Rs. 12,808/- p.m.  

fixed by the RCEO w.e.f. June 2, 1977.   

2. The brief facts are these.  Trust of Jama Masjid Nawab  

Abdul Nabi Khan Chauk Bazar, Mathura (hereinafter referred to as  

‘landlord’) owns a piece of land admeasuring 914.89 sq. yds. situate  

in Mohalla Naugaza,  Mathura (for short, ‘the said land’/ ‘the demised  

land’).  Prior to June 1, 1970, the said land was let out to some other  

tenant  who,  with  the  consent  of  the  landlord,  built  a  Cinema Hall  

thereon.  M/s Laxmi Talkies, a registered partnership firm   purchased  

the super structure  (Cinema Hall ) from the erstwhile tenant and took  

the said land on lease from the landlord for a rent of Rs. 70/- p.m.  

from June 1, 1970 for a term of 7 years vide lease deed  executed on  

June 2, 1970.  For brevity, we shall refer M/s Laxmi Talkies – lessee  

as ‘tenants’.    The lease provided that in case one month’s  prior  

notice for renewal before the expiry of the lease was given by the  

tenants  and landlord  fails to renew  then the lease shall continue for  

another term.  The lease also provided that tenants  will have a right  

of renewal of lease on the terms and conditions  as agreed upon but  

on every renewal, the tenants shall be bound to enhance the rate of  

2

rent at 5% on total rent of the year at the time of every renewal.    The  

landlord claims that on expiry of 7 years  of lease,   there was no  

agreement between the parties with respect to renewal of lease and  

the  rent.  On the other hand,  the   tenants claim that on expiry  of  

first term,  the lease was renewed from June 1, 1977 at the increased  

rent of Rs. 105/- p.m.  and thereafter got automatically renewed from  

June 1, 1984.  

3.  The U.P. Urban Buildings (Regulation of  Lettings, Rent  

and Eviction)  Act, 1972  (for short,  ‘1972 U.P. Act’)  came to be  

amended  by  U.P.  Act   28  of  1976  whereby   Section  29-A   was  

inserted.   The newly inserted Section 29-A  came into force on July  

5, 1976.   In the light of the provisions contained in Section 29-A,  the  

landlord made an application for determination of the annual rent for  

the demised land before the RCEO, Mathura  stating therein that the  

cost of the land leased out to the tenants  was not less than Rs. 20  

lakhs and, accordingly, they are   entitled to have the rent fixed at  

Rs. 16,666.66 p.m. from July 5, 1976.  The tenants contested the  

said application and  raised the plea that the lease  stood renewed  

from June 1, 1977 automatically and was  operative upto 1991 and,  

therefore,  no rent  can be increased.   They also disputed that  the  

3

market  value  of  the  land  was  Rs.  20  lakhs  as  suggested  by  the  

landlord.   

4. The landlord submitted affidavits in support of their  claim  

along with a valuation report.  The tenants filed  affidavit in rebuttal.   

5. In  his  order  dated  March  13,  1991,  RCEO  held  that  

market value of land was not  less than Rs. 1400/-  per sq. yd.  He  

thus computed  the total cost of land at  Rs. 12, 80,846/-  and  fixed  

the rent at Rs. 12,808/- p.m.   Against this decision, the tenants filed  

a writ petition before the High Court.  As  noticed above, the High  

Court allowed  the writ petition in part and fixed the rent at Rs. 2500/-  

p.m. payable from June 1, 1984.  

6. Mr.  H.C.  Kharbanda,  learned  counsel  for  the  landlord  

urged that the High Court  erred in modifying the rent fixed by the  

RCEO  on the basis of  the circle rates fixed by the District Magistrate  

under  Stamp Rules   by holding that  such rates  are fixed  on the  

higher side.   Learned counsel would submit that the RCEO  on the  

basis  of  the  available  material  and substantive  assessment  of  the  

factual position viz., that  no land is available for sale in the area; the  

demised land is situate on the main Mathura-Agra Road in the heart  

of the city and the valuation report given by the government approved  

4

valuer,  recorded a finding of fact that market value  of the demised  

land was not less than Rs. 1400/- per sq. yd. and accordingly fixed  

the rent at Rs. 12808/- p.m. and, therefore, there was no justification  

for the High Court to interfere with the order of the RCEO.   

7. On  the  other  hand,   Mr.  Rajiv  Dutta,  learned  senior  

counsel  for  the  tenants  heavily  relied  upon  the  terms  of  lease  

(particularly  clauses 4 and 5)  and submitted that  in  view of  these  

terms,  the  lease  stood  renewed  automatically  and  rent  had  been  

enhanced w.e.f. June 1, 1977 and, therefore, Section 29-A of 1972  

U.P. Act was not attracted.      

8. Section  29-A  of  1972  U.P.  Act  which  came  into  force  

w.e.f. July 5, 1976 reads thus:

“S.29-A.  Protection against eviction to certain   classes  of tenants of land on which building exists. – (1)  For the  purposes of  this section,  the expressions ‘tenant’  and  ‘landlord’  shall  have  the  meanings   respectively  assigned to them in Clauses (a) and (j) of Section 3 with  the substitution of the word ‘land’ for the word ‘building’.  

(2)   This  section  applies  only  to  land  let  out,  either  before  or  after  the  commencement  of  this  section,  where  the  tenant,  with  the  landlord’s  consent  has  erected any permanent structure and incurred expenses  in execution thereof.

(3)  Subject to the provisions hereinafter  contained in  this section, the provisions of Section 20 shall apply in  relation to any land referred to in sub-section (2) as they  apply in relation to any building.

5

(4)   The tenant of any land to which this section applies  shall be liable to pay to the landlord such rent as may  be mutually agreed upon between the parties,  and in  the  absence  of  agreement,  the  rent  determined  in  accordance with sub-section (5).  

(5)    The District Magistrate shall on the application of  the  landlord  or  the  tenant  determine  the  annual  rent  payable in  respect of such land at the rate of ten per  cent  per annum of  the prevailing market value of  the  land,  and  such  rent  shall  be  payable,  except  as  provided in sub-section (6) from the date of expiration of  the  term  for  which  the  land  was  let  or  from  the  commencement of this section, whichever is later.  

(6)(a)    In  any  suit  or  appeal  or  other  proceeding  pending immediately before the date of commencement  of this section, no decree for eviction of a tenant from  any land to which this section applies, shall be passed  or executed  except on one or more  of  the grounds  mentioned in sub-section (2) of Section 20, provided the  tenant,  within  a  period  of  three  months  from  the  commencement of this section by an application to the  Court, unconditionally offers to pay to the landlord the  enhanced rent of the land for the entire period in suit  and onwards at the rate of ten per cent per annum of  the  prevailing  market  value  of  the  land together  with  costs of the suit (including costs of any appeal or of any  execution of other proceedings).

(b)   In  every  such  case,  the  enhanced  rent  shall,  notwithstanding anything contained in sub-section  (5),  be determined by the Court seized of the case at any  stage.  

(c)   Upon payment against a receipt duly signed by the  plaintiff  or  decree-holder  or  his  Counsel  or  deposit  in  Court  of  such enhanced rent  with  costs  as  aforesaid  being made by the tenant within such time as the Court  may fix in this behalf, the Court shall dismiss the suit, or,  as the case may be, discharge the decree for eviction,  

6

and the tenancy thereafter  shall  continue annually  on  the basis of the rent so enhanced.  

(d)   If the tenant fails to pay the said amount within the  time so fixed (including any extended time, if any, that  the Court may fix or for sufficient cause allow) the Court  shall  proceed  further  in  the  case  as  if  the  foregoing  provisions of this section were not in force.  

(7)  The  provisions  of  this  Section  shall  have  effect  notwithstanding  anything  to  the  contrary  contained  in  any contract    or instrument or in any other law for the  time being in force.  

Explanation.  –  For  the  purposes  of  sub-section  (6)  where a case has been decided against a tenant by one  Court and the limitation for an appeal therefrom has not  expired  on  the  date  immediately  before  the  commencement of this section,  this section shall apply  as it applies to pending proceedings and the tenant may  apply  to  that  Court  for  a  review  of  the  judgment  in  accordance with the provisions of this section.”

 9. For  applicability  of  Section  29-A  as  provided  by  sub-

section (2),  two conditions must be satisfied, namely, (one) that land  

alone has been let out  and (two) that permanent structure  has been  

constructed by the tenant with landlord’s consent incurring his own  

expenses.    It is not important  whether the land has been let out  

either  before  or  after  the  commencement  of  Section  29-A.   Sub-

section  (4)   provides  for  the  liability  of  the   tenant  to  pay  to  the  

landlord mutually agreed rent and in the absence of such  agreement,  

the rent as  may be determined under  sub section (5).    The  District  

7

Magistrate is empowered under sub-section (5)  to  determine  the  

annual rent payable in respect of such land at the rate of 10% per  

annum of its  prevailing market value.   Such  determination of annual  

rent can be made by the District  Magistrate at the instance of the  

landlord or the tenant and the rent so determined is payable   from  

the date of expiration of the lease period or from the commencement  

of Section 29-A, whichever is later.  By virtue of sub-section (7), the  

provisions   contained  in  Section  29-A  override  any  term  to  the  

contrary in the contract between the landlord and tenant or instrument  

or any other existing law.  That the  conditions stated in sub-section  

(2) of Section 29-A are satisfied is not in dispute before us.  What has  

been  argued  by the learned senior counsel for the tenants is that the  

lease provides for automatic renewal on expiry of its term  and since  

rent  was  mutually  enhanced  to  Rs.  105/-  p.m.,  the  lease  got  

automatically renewed and, therefore, Section 29-A is not attracted.  

We fail to perceive any force in the argument of the learned senior  

counsel for tenants.   Clauses  4 and 5 of the Lease Deed  upon  

which  reliance  was  placed  by  the  learned  senior  counsel  for  the  

tenants read  as follows:

“4.   That  if  the  lessee duly  observe  and perform the  conditions  and covenants  herein contained in that case  

8

the lessees will have a right of renewal of the lease on  the same terms and conditions or agreed upon, but on  every renewal on existing rate of rent, the lessees shall  be bound to enhance rate of rent @ 5% on total rent of  the year at the time of every renewal.  

5.    That at  least one month before the expiry of  the  lease the lessees shall  communicate to the lessor for  getting the lease renewed.  In case the lessor fails to  get  executed  the  renewed  lease  the  lease  “shall  continue for another terms.”     

It is true that under the  aforenoted clauses of lease,  tenants have  

been given right of renewal by giving  notice of at least one month  

before the expiry of the lease to the landlord  for getting the lease  

renewed but what is seen from the material on record is that initial  

rent as provided in the lease was enhanced to Rs. 105/- p.m. and the  

tenants   continued  to  remain  in   possession  of  leased  premises.  

Such  possession  of  the  tenants  does  not  render  Section  29-A  

inoperative.   In the absence of any agreed rent between the parties  

for the land let out to the tenants,  after expiry of lease, it is open to  

the landlord or tenant  to get the annual rent determined  in respect of  

such land  under sub-section (5) on the basis of the prevailing market  

value. Seen thus, there remains  no doubt that rent of the said land is  

determinable under Section 29-A (5).  As a matter of fact,  on this  

aspect the finding of the High Court is  against the tenants and we do  

not find any error in that finding.   

9

10. As to the extent of rent payable by the tenants  to the  

landlord for the demised  land,  the High Court  referred  to the rate of  

Rs.  350/-  per sq. yd.  fixed by the District  Magistrate under Stamp  

Rules   and  held  that  the  circle  rate  determined  by  the  District  

Magistrate  under  Stamp  Rules  is  rather  on  the  higher  side  and  

accordingly fixed the market value of the demised land on that basis.  

We are unable to subscribe to the view of the High Court.  The circle  

rate fixed under  the Stamp Rules is ordinarily  general  rate for a  

particular  area   and  may  provide  some  indication  but  such  rate  

cannot be decisive of  the prevalent market value of the concerned  

land.    An  exemplar   showing  sale  of  nearby  land  may  help  in  

determining the market value of the demised land  but there is no  

exemplar  here.    The  valuer’s  report,  however,  shows  that  the  

demised   land  is  situate  on  the  main  road  from  Holy  Gate  to  

Collectorate  and  Civil  Lines  near  the  Roadways  Bus  Stand  and  

Mathura-Cantt., Railway Station.   The High Court has not taken into  

consideration  the  valuer’s  report  and  the  evidence  let  in  by  the  

landlord at all.  We are, thus, satisfied that the High Court was not  

justified in fixing the rent of the said land at the rate of Rs. 2500/- p.m.  

10

solely based on the circle rate fixed under the Stamp Rules.  The  

consideration of the matter by the High Court  suffers from legal  flaw  

and cannot be sustained.  The order of  RCEO also suffers from a  

fundamental  error.   Even if  it  is  assumed that  RCEO was right  in  

fixing  the  market  value  of  demised  land  at  Rs.  12,80,846/-,   the  

annual rent at the rate of 10% of that value comes to Rs. 1,28,084/-  

and, therefore, monthly rent determined by the RCEO at Rs. 12,808/-  

is clearly erroneous.  

11. By way of  foot-note,  we may state  that  we granted an  

opportunity to the parties to settle the dispute amicably as we thought  

that it was the best way to bring an end to already two-decade old  

litigation  but,  unfortunately,  the  parties  failed  to  arrive  at  mutually  

agreed rate of rent.   

12. In  the  circumstances,   the  order  dated  September  10,  

2003 passed by the High Court and the order dated March 13, 1991  

passed by the Rent Control  and Eviction Officer,  Mathura  are set  

aside and Case no. 146 of 1988, Trust Jama Masjid, Mathura Vs. M/s  

Laxmi Talkies and Ors.,  is restored to the file of Rent Control and  

Eviction Officer, Mathura, for  determination of the annual rent of the  

demised land afresh in accordance with law.  Needless to say that  

11

annual rent so determined shall be payable from the date stated in  

Section 29-A (5).   We further direct  that  until  the determination of  

annual rent under Section 29-A (5) and subject thereto, the tenants  

shall pay rent to the landlord at the rate of Rs. 10,000/- p.m. from the  

month of September, 2010 provisionally.  The provisional rent so paid  

by the tenants shall be adjusted against the rent that may be finally  

determined under Section 29-A (5) of 1972 U.P. Act.  The appeal of  

the  landlord  is  allowed  to  the   extent  indicated  above  while  the  

tenants’ appeal is dismissed.  No  order as to costs.  

……………………..J.    (Aftab Alam)     

…………………… J. New Delhi,            (R.M. Lodha) August  16, 2010

12