... In the instant case, in determining the said rent it has to be kept in mind that the bank is located near to the High Court at Calcutta and although its accessibility could not be compared with the R.N. Mukherjee Road property but the fact remains that the bank is enjoying a prime location having a space 4000 sq. ft. at a meagre monthly rent of Rs.1 per sq. ft. per month. Even 15% increase of the said rent, i.e., Rs.4146.73 p. in 1995 would not be a fair rent in respect of the said property. It was precisely for that reason the bank had agreed to review the rent in the year 1995. The valuer appointed by the bank has given a report fixing rent at Rs.8.40 per sq. ft. per month in 1995.

...

"A comparative assessment of the nature, location, accessibility to the main road, amenities available in the suit premises on the one hand and similar characteristics of the premises surrounding on the other hand could be a relevant consideration for determination of rent. Even in the same locality, the rent may differ. A lower rent in a comparable unit may not always be a guiding factor in determining rent if it appears to be meagre and abnormally low. Considering the valuation report and other evidence on record it appears that the "existing rent" in 1995 could vary between Rs.14/- and Rs.18/-. Three properties were taken into consideration by the valuer on either side in giving their opinion. My conclusion is based on the assessment of the evidence on record and after taking into consideration the comparative advantage and disadvantage of the suit premises. I have taken into consideration the basic rent in respect of the R.N. Mukherjee Road property, namely, Rs.20 per sq. ft. per month and Rs.8.40 per sq. ft. per month in 1995 as determined by the valuer on behalf of the defendant on consideration of a property situated at Premises No.9, Old Post Office Street, Kolkata. The defendant was facing an eviction in 1990 which, however, was compromised on the basis of terms of settlement filed in Court and a compromise decree was passed on 24th August, 1990. The Bank never disputes that the bank was not obliged to enhance the rent."

...

"... In determining the said rent, some guesswork is to be made. The result of such guesswork would largely depend upon the factors as mentioned hereinabove more particularly in view of the complexities involved in such matter.

On a fair assessment of the pleading and evidence on record, I am of the view, that a fair and reasonable rent in 1995 would be Rs.14.50/- per sq. ft. in 1995. The said rent is, accordingly, determined at Rs.14.50 per sq. ft. in 1995 after taking into consideration the aforesaid factors as well as the basic rent in respect of the R.N. Mukherjee Road property, the letter dated August 23, 1982 of India Automobiles Ltd. (1960) and the determination of the rent by the valuer in respect of the suit premises in 1995.

It is evident that the trial court found that the rates of rent commanded by a property on Old Post Office Street near the High Court and another on R.N. Mukherjee Road would not be similar. As a consequence, the trial court noticed the rate of rent relied upon in the report of Talbot & Co. for the 20, R.N. Mukherjee Road property and founded the assessment of appropriate rent at the suit premises by scaling down the rate for the R.N. Mukherjee Road property. In the plaintiff seeking to rely on the two additional documents that were taken on record by the appellate court order of October 9, 2013, the plaintiff suggests that the basis for the trial court assessment was flawed. The two additional documents pertain to a 100-year old property at 1A, Old Post Office Street and a 50-year old property at 21, R.N. Mukherjee Road. Though the carpet areas and super built-up areas of the two units covered by the additional documents are identical - and comparable to the suit premises - the R.N. Mukherjee Road property commands a value of, roughly, 20 per cent less than the older Old Post Office Street property. Since the rate of rent that a property would command is directly proportional to the value of the property, it would appear from the additional documents that rent at a comparable property on Old Post Office Street would be substantially higher than the rent at a property on R.N. Mukherjee Road.

The plaintiff refers to a judgment reported at (2009) 11 SCC 141 (Mahesh Dattatray Thirthkar v. State Of Maharashtra) for the proposition that the minor inconsistencies in any testimony should be disregarded when a matter is decided on the principle of balance of probabilities and not on the basis of beyond reasonable doubt. In that case, involving the valuation of a property acquired under the Land Acquisition Act, 1894, the issue was whether the distance between the acquired property and the comparable property being in excess of 0.5 km and closer to 2 km made any material difference. The Supreme Court opined that the perceived inconsistency was insignificant as the properties were sufficiently close to each other. In such context, there does not appear to be any material basis for making a distinction between a property on Old Post Office Street and another comparable property on R.N. Mukherjee Road, even if the additional documents relied upon by the plaintiff were not taken into account.

The defendant prefaces its submission with the assertion that it is aggrieved by the Division Bench opinion that the suit was maintainable notwithstanding the mandate of section 47 of the code. The defendant also asserts that clause 1(iii) of the terms of compromise required the parties merely to review the rent in 1995 and not ascertain the market rent that the suit premises would have commanded at the relevant time.

Neither aspect as canvassed by the defendant can be gone into in course of the present reference. The limited scope of a reference under Clause 36 of the Letters Patent requires only the point of difference to be addressed and answered. The point of difference has been summarised in the question which has been framed by the Division Bench; and such question requires an assessment in this reference of "the actual rent in 1995 in respect of the suit premises".

The defendant suggests that the assessment made by the trial court as accepted by one of the Judges in appeal should be followed since there is no error in the methodology adopted for the assessment. The defendant says that several pages have been expended in the judgment of the trial court to indicate why a figure closer to the estimate of the defendant's valuer was justified and, if the method was not awry, it is such figure which should be accepted. The defendant says that the approach adopted in arriving at the figure of Rs.24 per sq. ft per month by one of the members of the Division Bench is exceptionable. According to the defendant if the two valuers had suggested even more disparate figures the assessment by court could never have been by taking the average of the two figures. The defendant maintains that it was not incumbent on the court to accept either opinion as long as a cogent methodology was applied; or else, the court could have relied more on one opinion and less on the other and made an independent assessment to arrive at a figure closer to the estimate of the more reliable opinion. The defendant submits that the approach of the trial court in such regard was proper and did not call for any interference.

Apropos the two additional documents that were taken on record by the appellate court order of October 9, 2013, the defendant says that since the admissibility of the documents was not pronounced upon, no cognizance thereof can be taken in course of this reference. In such context, the defendant places Order XLI Rule 27 of the Code and claims that none of the limbs of sub-rule (1) thereunder was satisfied for the appellate court to allow such documents to be produced or lend credence thereto. The defendant points out that the order of October 9, 2013 did not record any reason for the admission of the two documents and, indeed, the issue of admissibility was left undecided; and was ultimately not addressed. Order XLI Rule 27 of the Code provides as follows:

"Rule 27. Production of additional evidence in Appellate Court. - (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if -

(a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or

(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such evidence or document to be produced or witness to be examined.

(2) Whenever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."

The defendant argues that since clauses (a) and (b) of sub rule (1) of Order XLI Rule 27 could not have come into play in the two additional documents being sought to be admitted into evidence at the appellate stage, the prayer for inclusion of such documents must per force be seen to have been under clause (aa). The defendant says that the wording of clause (aa) would imply that the evidence was available at the time the decree appealed against was passed, but it could not be produced on account of one or more of the grounds as recognised in the clause. The defendant refers to the dates of the two documents, of September 27, 2013, and suggests that Order XLI Rule 27 (1)(aa) does not contemplate evidence which was not in existence at the time when the decree was passed may be relied upon in course of the appeal from the decree.

The provision cannot be read so narrowly as to imply that any material not in existence as at the date of the decree cannot be admitted into evidence at the appellate stage under clause (aa). In any event, the additional documents, the chargeability assessment slips relating to an Old Post Office Street property and an R.N. Mukherjee Road property, indicate the date when the queries were raised, which may not have been the date of the relevant transactions.

It is the other objection taken by the defendant as to the admission or admissibility of the two additional documents that requires to be considered. Though the words "admission" and "admissibility" originate from the same Latin root of admittere, in some contexts the apparent nexus of the two words with the same root may be deceptive. The word "admission" as it is used in Order XLI Rule 27(2) of the Code implies "receipt" or "introduction". That stage is over qua the two documents by virtue of the appellate court order of October 9, 2013. The word "admissibility" used in the penultimate paragraph of such order, in the context of deciding on the admissibility of the documents, refers to the validity or the acceptability of the documents and has to do with the quality thereof. The order of October 9, 2013 does not imply that the two documents were not admitted in the sense of "admission" within the meaning of the word as used in Order XLI Rule 27(2) of the Code, though no reason in terms of such sub-rule appears from the order. Once the two documents have been admitted, in the sense that they have been taken on record, the "admissibility" of the documents, in the sense of their validity or veracity, is an issue as to the quality of the documents. The defendant has not questioned the veracity of such documents.

The plaintiff has introduced the two additional documents to detract from the methodology adopted by the trial court in making the assessment of the rent that the suit premises would have commanded in the year 1995. The plaintiff questions the rationale in the judgment and decree that a property on R.N. Mukherjee Road would command a higher rate of rent than a comparable property on Old Post Office Street. The judgment in support of the decree observes that if a property at the crossing of R.N. Mukherjee Road and Bentink Street could command a monthly rent of Rs. 20 per sq. ft on the ground floor, the suit premises would command a rate "between Rs.14/- and Rs.18/- per sq. ft". The plaintiff demonstrates on the basis of the additional documents that a ground floor space of identical dimensions in a 100-year old property on Old Post Office Street is valued 20 per cent more than a ground floor space in a 50-year old building on R.N. Mukherjee Road. This evidence was not before the trial court; and, it does detract from the methodology of assessment as employed by the trial court in holding that a comparable property on Old Post Office Street is less valuable than one on R.N. Mukherjee Road.

The act of judging under the constitutional mandate in a system governed by the rule of law is subject to certain ground rules. Judging has to be in accordance with law and not on the basis of the personal perception of a Judge as to what is right or what it ought to be. The manner in which judicial authority may be exercised and the tools of the trade are well established. Most importantly, a judgment has to indicate the basis therefor for it to convey the rules of conduct to the litigants involved and the society at large; and, reveal the methodology adopted for it to be acceptable.

The nature of adjudication adopted by a referee Judge in a reference of the present kind, where there is a difference of opinion on a point in course of an appeal heard by a Division Bench of two Judges, would be as in the appeal from the order or decree. It is elementary that the approach in an appeal ought to be to ascertain whether the decision-making process and the impugned decision rendered are in accordance with law. The appellate court may step in, depending on the ambit of the appeal and the scope of the authority available in the appeal, if either the decision-making process or the decision is found to be not in accordance with law or erroneous. The approach in an appeal cannot be to make a fresh assessment by ignoring the order or decree impugned; unless cogent grounds exist and are indicated as to why the opinion of the trial court ought to be altogether disregarded.

It is, in such circumstances, that the decision-making process that culminated in the decision rendered by the trial court on the aspect which is relevant for the reference that falls for scrutiny herein. It has to be kept in mind that if the decision-making process that culminated in the decision cannot be flawed, and the decision involved an element of discretion or guesswork - as is always the case in assessing reasonable or market rate of rent - the appellate court would not intervene to supplant its discretion or guesswork unless the exercise of discretion or the guesswork involved is found to be perverse.

On such basis as indicated above, the assumption which is evident in the decision-making process of the trial court, in perceiving a comparable property on Old Post Office Street to command a substantially lesser rate of rent than one on R.N. Mukherjee Road, is found to be not substantiated by any cogent ground. There was no material before the trial court for it to conclude or deduce therefrom that a comparable property on Old Post Office Street would fetch substantially less rent than one on R.N. Mukherjee Road. On the contrary, the additional documents introduced by the plaintiff in the appeal, which indicate the values of the last transactions pertaining to a 100-year old building on Old Post Office Street and a 50-year old building on R.N. Mukherjee Road, suggest that the value of the Old Post Office Street property would be 20 per cent more than that of the R.N. Mukherjee Road property.

Since the figure arrived at by the trial court in the range "between Rs.14/- and Rs.18/- per sq. ft" per month is with reference to the rent at the R.N Mukherjee Road property of Rs.20 per sq. ft per month, on the basis of the additional evidence, the suit premises on Kiran Shankar Ray Road which has its entrance on Old Post Office Street should have commanded roughly 20 per cent more on account of rent than the comparable R.N. Mukherjee Road property at the relevant time. The rent of the R.N. Mukherjee Road Property was Rs.20 per sq. ft per month. The rent in respect of the suit premises in 1995 is thus assessed to be 20 per cent in excess of the value of rent at the R.N. Mukherjee Road property of Rs. 20; or, Rs.24 per sq. ft per month.

The question posed in the reference is answered accordingly by holding that the rent in 1995 in respect of the suit premises would have been Rs.24 per sq. ft per month.

In accordance with the mandate of Clause 36 of the Letters Patent, the majority view of the Judges who have heard the relevant point in the appeal is recorded as Rs.24 per sq. ft per month being the rate of rent in the suit premises in the year 1995.

The reference is disposed of. There will be no order as to costs.

Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(Sanjib Banerjee, J.)