law relating on rent

MOOT COURT AND INTERNSHIP PROJECT

LAW RELATING TO RENT, LEASE AND

EVICTION

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

ACKNOWLEDGEMENT

under the guidance of:Mr. Anshuman

project submitted by:SHASHI SHEKHAR KASHYAP

ROLL NO.- 3264SEMESTER- 10TH

SESSION- 2008-13COURSE- B.A. LL.B.

I take this opportunity to express my humble gratitude and personal regards to Mr.

Anshuman for inspiring me and guiding me during the course of this project work

and also for his cooperation and guidance from time to time during the course of

this project work on the topic

“LAW RELATING TO RENT, LEASE AND EVICTION”

“I EXPRESS MY GRATITUDE TO THE FACULTY OF, ‘MOOT COURT AND

INTERNSHIP’ FOR THE CONCEPTS GIVEN BY HIM IN THE SUBJECT WHICH

HAS BEEN THE BASE FOR THIS SMALL PIECE OF WORK.”

YOURS SINCERELY

SHASHI SHEKHAR KASHYAP

ROLL NO. 3264

RESEARCH METHODOLOGY

Aims and Objectives:

The aim of the project is to present a detailed study of the topic LAW RELATING TO RENT,

LEASE AND EVICTION through decisions and suggestions and different writings and

articles.

Scope and Limitations:

Though the topic LAW RELATING TO RENT, LEASE AND EVICTION is an immense

project and pages can be written over the topic but because of certain restrictions and limitations

I was not able to deal with the topic in great detail.

Method of Writing and Mode of Citation:

The method of writing followed in the course of this research project is primarily analytical. The

researcher has followed Uniform method of citation throughout the course of this research

project.

Content

s

INTODUCTION............................................................................................................................................6

GENERAL CONCEPT ABOUT LEASE.....................................................................................................7

Lease..........................................................................................................................................................7

License.......................................................................................................................................................7

Principles To Distinguish Lease From License.........................................................................................7

Statutory Provisions In Respect of Lease of Immovable Property............................................................9

Definition of lease under S. 105 of the Transfer of Property Act, 1882...................................................9

Duration Of Certain Leases In Absence Of Written Contract Or Local Usage........................................9

Making Of Lease [S. 107 Of The Transfer Of Property Act, 1882].......................................................10

Rights and liabilities of lessor and lessee................................................................................................10

Rights of lessor's transferee.....................................................................................................................13

Exclusion of day on which term commences [S. 110 Of The Transfer Of Property Act, 1882]............14

Determination of lease [S. 111 Of The Transfer Of Property Act, 1882]...............................................14

Waiver of forfeiture [S. 112 Of The Transfer Of Property Act, 1882]...................................................15

Waiver of notice to quit [S. 113 Of The Transfer Of Property Act, 1882].............................................15

Relief against forfeiture for non-payment of rent [S. 114 Of The Transfer Of Property Act, 1882]......15

Relief against forfeiture in certain other cases [S. 114A Of The Transfer Of Property Act, 1882]........16

Effect of surrender and forfeiture on underleases [S. 115 Of The Transfer Of Property Act, 1882]......16

Effect of holding over [S. 116 Of The Transfer Of Property Act, 1882]................................................16

Exemption of leases for agricultural purposes [S. 117 Of The Transfer Of Property Act, 1882]...........17

Relevant Statutory Provisions About The Protection Of Tenants Against Harassment And Exploitation

By Avaricious Landlords.........................................................................................................................17

Rights and remedies available to the landlord against tenant and vice-versa.........................................18

"CONTRACTUAL TENANCY" AND "STATUTORY TENANCY".......................................................19

Tenant At Sufferance, Tenant At Will And Tenant By Holding Over....................................................19

Heritability Of Statutory Tenancy...........................................................................................................24

The principles laid down in Gian Devi's case with regard to heritability of tenancy..............................36

RENT CONTROL LEGISLATION............................................................................................................39

Provisions regarding rent with special reference to the Delhi Rent Control Act, 1958..........................39

The procedure for the landlord to increase the rent contracted with the tenant......................................41

Premises: Exemption From Applicability Of Rent Control Legislation.................................................44

GROUNDS OF EVICTION........................................................................................................................48

1. Non-Payment of Rent/Arrears of Rent............................................................................................48

2. Sub-letting the Rented Out Premises...............................................................................................51

3. Non-user of the Rented Premises for more than six months...........................................................53

4. Impermissible User of the Rented Premises....................................................................................54

3. Tenant Acquiring Vacant Possession of or has been Allotted a Residence........................................55

5. Use of premises in violation of conditions of lease stipulated by DDA/MCD................................55

Difference between section 14(1)(c) and section 14(1)(k).................................................................56

SUMMARY PROCEDURE........................................................................................................................62

REMEDY AGAINST CUTTING OFF OR WITHHOLDING ESSENTIAL SUPPLY OR SERVICE.....65

CONCLUSION............................................................................................................................................67

BIBLIOGRAPHY........................................................................................................................................68

INTODUCTION

The basic objective of the rent control legislation is to protect the tenant against exorbitant rents,

arbitrary increases in the rent and ensure him security of tenure. The legislation has been

necessitated by conditions of scarcity prevailing in rental housing markets of urban areas. As

housing is a State subject, different State Governments have framed their own rent control laws.

By 1972, almost all the States in the country had enacted Rent control Acts (RCA).

Rent control was conceived as a short term measure to overcome the problem of temporary

shortages during World wars. The Acts were therefore enacted for short and limited durations.

This practice has continued and the rent control Acts in most States are temporary Acts and are

extended every few years. The State Governments have periodically amended the Acts either in

response to changing market conditions or to plug some loopholes and improve the functioning

of the Acts.

Under the Indian Constitution, housing (provision of) is a state subject. Thus, the enactment and

enforcement of rent control laws is the responsibility of the individual states. While this is in

accordance with the federal nature of the Indian Republic, it makes a comparative analysis of the

rent control laws that much more difficult.

The common thread running through almost all rent control Acts and legislations is that they are

intended to serve two purposes:

1. To protect the tenant from eviction from the house where he is living except for defined

reasons and on defined conditions; and

2. To protect him from having to pay more than a fair/standard rent.

The rent control Acts are generally applicable to all urban areas in the States and to most of the

residential and non-residential premises in these urban areas. The exempted premises include

those belonging to the Union Government, State Government and local authorities. Some states

also exclude from the preview of the Act properties falling below or above certain rental values,

newly constructed properties, as also properties belonging to charitable Trusts etc. In each city

these exemptions account for a significant proportion of the total rental housing stock. Under the

common law, tenancy is governed by the Transfer of Properties Act, 1882.

GENERAL CONCEPT ABOUT LEASE

'Tenancy' or the 'lease' has its origin in contract, entered into between the landlord and the tenant

for a consideration of a price paid or promised (called premium) or of money, a share of crops,

service or any other thing of value (called as rent) to be rendered periodically or on specified

occasions.

LEASE

Under the common law, tenancy is governed by the Transfer of Properties Act, 1882. Section

105 defines 'lease' as a transfer of a right to enjoy immovable property, made for a certain time,

expressed or implied, or in perpetuity, in consideration of the aforementioned premium or rent.

To understand the meaning of the term 'lease' properly one needs to distinguish it from the term

'license', because in both the cases, transferor permits the transferee to use his property.

LICENSE

Where one person grants to another, or to a definite number of other persons, a right to do, or

continue to do, in or upon the immovable property of the grantor, something which would, in the

absence of such right, be unlawful, and such right does not amount to an easement1 or an interest

in the property, the right is called a license.2

PRINCIPLES TO DISTINGUISH LEASE FROM LICENSE

From a bare perusal of the aforesaid definitions of the term 'lease' and 'license' it is apparent that

license is merely a permissive right. It is purely a personal privilege granted by the transferor to

the transferee and it does not create an interest in the immovable property. For example, right to

catch fish from the pond, right to pluck coconuts, mangoes, or any other fruit or vegetable for a

particular period. Similarly, a hosteller stays in a Hostel as a licensee. But in the case of lease an

interest in the property is created, which is apparent when possession of the immovable property

1 "Easement" defined. _ An easement is a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and continue to prevent something being done, in or upon, or in respect of, certain other land not his own.2 Section 52 of the Indian Easements Act, 1882

is transferred to the transferee. Therefore, this handing over of exclusive possession by the

transferor to the transferee reflects the intention to create a lease and not the license, which is

purely of permissive nature. However, the difficulty arises in those cases where despite exclusive

possession having been handed over to the transferee interest in the property is not created. In

such cases, it is very difficult to distinguish between the lease and license. Therefore, though, the

distinction between the two concepts is very clear, but sometimes, the dividing line becomes

very thin or even blurred.

At one time it was thought that the test of exclusive possession was infallible and if a person was

given exclusive possession of a premises, it would conclusively establish that he was a lessee.

But there was a change and the recent trend of judicial opinion is reflected in Errington v.

Errington, wherein Lord Denning reviewing the case law on the subject summarizes the result of

his discussion as: “The result of all these cases is that, although a person who is let into exclusive

possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so

if the circumstances negative any intention to create a tenancy.”3

The Court of Appeal again in Cobb v. Lane, considered the legal position and laid down that the

intention of the parties was the real test for ascertaining the character of a document.4

Denning, L.J., said much to the same effect: “The question in all these cases is one of intention:

Did the circumstances and the conduct of the parties show that all that was intended was that the

occupier should have a personal privilege with no interest in the land?”5

The following propositions may, therefore, be taken as well-established:

1. To ascertain whether a document creates a licence or lease, the substance of the document

must be preferred to the form;

2. The real test is the intention of the parties-whether they intended to create a lease or a

licence;

3. If the document creates an interest in the property, it is a lease; but, if it only permits another

to make use of the property, of which the legal possession continues with the owner, it is a

licence; and

3 Errington v. Errington, (1952) 1 All ER 149 p. 155.4 Cobb v. Lane, (1952) 1 All ER 1199 p. 12015 Ibid. p. 1202

4. If under the document a party gets exclusive possession of the property, prima facie, he is

considered to be a tenant; but circumstances may be established which negative the intention

to create a lease.6

STATUTORY PROVISIONS IN RESPECT OF LEASE OF IMMOVABLE PROPERTY

Lease of immovable property is governed by Chapter V of the Transfer of Property Act, 1882,

which contains provisions from 117. These provisions are essential to understand the concept of

lease under the said Act, which for the sake of convenience, in our country, is referred to as

"Contractual Tenancy", vis--vis the tenancy under the special piece of legislation in respective

States (for example Delhi Rent Control Act, 1958 in Delhi), which is referred to as "Statutory

Tenancy".

DEFINITION OF LEASE UNDER S. 105 OF THE TRANSFER OF PROPERTY ACT, 1882

A lease of immovable property is a transfer of a right to enjoy such property, made for a certain

time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of

money, a share of crops, service or any other thing of value, to be rendered periodically or on

specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined: The transferor is called the lessor, the transferee is

called the lessee, the price is called the premium, and the money, share, service or other thing to

be so rendered is called the rent.

DURATION OF CERTAIN LEASES IN ABSENCE OF WRITTEN CONTRACT OR LOCAL

USAGE

In the absence of a contract or local law or usage to the contrary, a lease of immovable property

for agricultural or manufacturing purposes shall be deemed to be a lease from year to year,

terminable, on the part of either lessor or lessee, by six months' notice expiring with the end of a

year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to

be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days'

notice expiring with the end of a month of the tenancy.

6 Associated Hotels of India Ltd. v. R.N. Kapoor, AIR 1959 SC 1262.

Every notice under this section must be in writing, signed by or on behalf of the person giving it,

and either be sent by post to the party who is intended to be bound by it or be tendered or

delivered personally to such party, or to one of his family or servants at his residence, or (if such

tender or delivery is not practicable) affixed to a conspicuous part of the property.7

MAKING OF LEASE [S. 107 OF THE TRANSFER OF PROPERTY ACT, 1882]

A lease of immovable property from year to year, or for any term exceeding one year or

reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered instrument or by oral

agreement accompanied by delivery of possession.

Where a lease of immovable property is made by a registered instrument, such instrument or,

where there are more instruments than one, each such instrument shall be executed by both the

lessor and the lessee:

Provided that the State Government from time-to-time, by notification in the Official Gazette,

direct that leases of immovable property, other than leases from year to year, or for any term

exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by

unregistered instrument or by oral agreement without delivery of possession.

RIGHTS AND LIABILITIES OF LESSOR AND LESSEE

In the absence of a contract or local usage to the contrary, the lessor and the lessee of immovable

property, as against one another, respectively, possess the rights and are subject to the liabilities

mentioned in the rules next following, or such of them as are applicable to the property leased:-

(A) Rights and liabilities of the lessor

(a)The lessor is bound to disclose to the lessee any material defect in the property, with

reference to its intended use, of which the former is and the latter is not aware, and which

the latter could not with ordinary care discover;

(b)the lessor is bound on the lessee's request to put him in possession of the property;

7 S. 106 Of The Transfer Of Property Act, 1882

(c)the lessor shall be deemed to contract with the lessee that, if the latter pays the rent

reserved by the lease and performs the contracts binding on the lessee, he may hold the

property during the time limited by the lease without interruption.

The benefit of such contract shall be annexed to and go with the lessee's interest as such,

and may be enforced by every person in whom that interest is for the whole or any part

thereof from time to time vested.

(B) Rights and liabilities of the lessee

(d)If during the continuance of the lease any accession is made to the property, such

accession (subject to the law relating to alluvion for the time being in force) shall be

deemed to be comprised in the lease;

(e)if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible

force, any material part of the property be wholly destroyed or rendered substantially and

permanently unfit for the purposes for which it was let, the lease shall, at the option of the

lessee, be void:

Provided that, if the inquiry be occasioned by the wrongful act or default of the lessee, he

shall be entitled to avail himself of the benefit of this provision;

(f)if the lessor neglects to make, within a reasonable time after notice, any repairs which

he is bound to make to the property, the lessee may make the same himself, and deduct

the expense of such repairs with interest from the rent, or otherwise recover it from the

lessor;

(g)if the lessor neglects to make any payment which he is bound to make, and which, if

not made by him, is recoverable from the lessee or against the property, the lessee may

make such payment himself, and deduct it with interest from the rent, or otherwise

recover it from the lessor;

(h)the lessee may even after the determination of the lease remove, at any time whilst he

is in possession of the property leased but not afterwards all things which he has attached

to the earth; provided he leaves the property in the State in which he received it;

(i)when a lease of uncertain duration determines by any means except the fault of the

lessee, he or his legal representative is entitled to all the crops planted or sown by the

lessee and growing upon the property when the lease determines, and to free ingress and

egress to gather and carry them;

(j)the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any

part of his interest in the property, and any transferee of such interest or part may again

transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any

of the liabilities attaching to the lease;

nothing in this clause shall be deemed to authorise a tenant having an untransferable right

of occupancy, the farmer of an estate in respect of which default has been made in paying

revenue, or the lessee of an estate under the management of a Court of Wards, to assign

his interest as such tenant, farmer or lessee;

(k)the lessee is bound to disclose to the lessor any fact as to the nature or extent of the

interest which the lessee is about to take of which the lessee is, and the lessor is not

aware, and which materially increases the value of such interest;

(l)the lessee is bound to pay or tender, at the proper time and place, the premium or rent

to the lessor or his agent in this behalf;

(m)the lessee is bound to keep, and on the termination of the lease to restore, the property

in as good condition as it was in at the time when he was put in possession, subject only

to the changes caused by reasonable wear and tear or irresistible force, and to allow the

lessor and his agents, at all reasonable times during the term, to enter upon the property

and inspect the condition thereof and give or leave notice of any defect in such condition;

and, when such defect has been caused by any act or default on the part of the lessee, his

servants or agents, he is bound to make it good within three months after such notice has

been given or left;

(n)if the lessee becomes aware of any proceeding to recover the property or any part

thereof, or of any encroachment made upon, or any interference with, the lessor's rights

concerning such property, he is bound to give, with reasonable diligence, notice thereof

to the lessor;

(o)the lessee may use the property and its products (if any) as a person of ordinary

prudence would use them if they were his own; but he must not use, or permit another to

use, the property for a purpose other than that for which it was leased, or fell or sell

timber, pull down or damage buildings belonging to the lessor, or work mines or quarries

not open when the lease was granted, or commit any other act which is destructive or

permanently injurious thereto;

(p)he must not, without the lessor's consent, erect on the property any permanent

structure, except for agricultural purposes;

(q)on the determination of the lease, the lessee is bound to put the lessor into possession

of the property.

RIGHTS OF LESSOR'S TRANSFEREE

If the lessor transfers the property leased, or any part thereof, or any part of his interest therein,

the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the

lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred

so long as he is the owner of it; but the lessor shall not, by reason only of such transfer cease to

be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat

the transferee as the person liable to him:

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if

the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor,

the lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what proportion of the premium or rent

reserved by the lease is payable in respect of the part so transferred, and, in case they disagree,

such determination may be made by any court having jurisdiction to entertain a suit for the

possession of the property leased.

EXCLUSION OF DAY ON WHICH TERM COMMENCES [S. 110 OF THE TRANSFER OF

PROPERTY ACT, 1882]

Where the time limited by a lease of immovable property is expressed as commencing from a

particular day, in computing that time such day shall be excluded. Where no day of

commencement is named, the time so limited begins from the making of the lease.

Duration of lease for a year: Where the time so limited is a year or a number of years, in the

absence of an express agreement to the contrary, the lease shall last during the whole anniversary

of the day from which such time commences.

Option to determine lease: Where the time so limited is expressed to be terminable before its

expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not

the lessor, shall have such option.

DETERMINATION OF LEASE [S. 111 OF THE TRANSFER OF PROPERTY ACT, 1882]

A lease of immovable property determines

(a) by efflux of the time limited thereby,

(b) where such time is limited conditionally on the happening of some event-by the

happening of such event,

(c) where the interest of the lessor in the property terminates on, or his power to dispose of

the same extends only to, the happening of any event-by the happening of such event,

(d) in case the interests of the lessee and the lessor in the whole of the property become

vested at the same time in one person in the same right,

(e) by express surrender, that is to say, in case the lessee yields up his interest under the lease

to the lessor, by mutual agreement between them,

(f) by implied surrender,

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which

provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee

renounces his character as such by setting up a title in a third person or by claiming title

in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the

lessor may re-enter on the happening of such event; and in any of these cases the lessor or

his transferee gives notice in writing to the lessee of his intention to determine the lease,

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the

property leased, duly given by one party to the other.

WAIVER OF FORFEITURE [S. 112 OF THE TRANSFER OF PROPERTY ACT, 1882]

A forfeiture under section 111, clause (g) is waived by acceptance of rent which has become due

since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor

showing an intention to treat the lease as subsisting:

Provided that the lessor is aware that the forfeiture has been incurred:

Provided further that, where rent is accepted after the institution of a suit to eject the lessee on

the ground of forfeiture, such acceptance is not a waiver.

WAIVER OF NOTICE TO QUIT [S. 113 OF THE TRANSFER OF PROPERTY ACT, 1882]

A notice given under section 111, clause (h), is waived, with the express or implied consent of

the person to whom it is given, by any act on the part of the person giving it showing an intention

to treat the lease as subsisting.

RELIEF AGAINST FORFEITURE FOR NON-PAYMENT OF RENT [S. 114 OF THE

TRANSFER OF PROPERTY ACT, 1882]

Where a lease of immovable property has been determined by forfeiture for non-payment of rent,

and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to

the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives

such security as the Court thinks sufficient for making such payment within fifteen days, the

Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the

forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not

occurred.

RELIEF AGAINST FORFEITURE IN CERTAIN OTHER CASES [S. 114A OF THE TRANSFER

OF PROPERTY ACT, 1882]

Where a lease of immovable property has been determined by forfeiture for a breach of an

express condition which provides that on breach thereof the lessor may re-enter, no suit for

ejectment shall lie unless and until the lessor has served on the lessee a notice in writing-

(a) specifying the particular breach complained of; and

(b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and the lessee

fails, within a reasonable time from the date of the service of the notice, to remedy the

breach, if it is capable of remedy.

Nothing in this section shall apply to an express condition against the assigning, under-letting,

parting with the possession, or disposing, of the property leased, or to an express condition

relating to forfeiture in case of non-payment of rent.

EFFECT OF SURRENDER AND FORFEITURE ON UNDERLEASES [S. 115 OF THE

TRANSFER OF PROPERTY ACT, 1882]

The surrender, express or implied, of a lease of immovable property does not prejudice an under

lease of the property or any part thereof previously granted by the lessee, on terms and

conditions substantially the same (except as regards the amount of rent) as those of the original

lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable

by, and the contracts binding on, the underlessee shall be respectively payable to and enforceable

by the lessor.

The forfeiture of such a lease annuls all such underleases, except where such forfeiture has been

procured by the lessor in fraud of the underlessees, or relief against the forfeiture is granted

under section 114.

EFFECT OF HOLDING OVER [S. 116 OF THE TRANSFER OF PROPERTY ACT, 1882]

If a lessee or underlessee of property remains in possession thereof after the determination of the

lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee

or underlessee, or otherwise assents to his continuing in possession, the lease is, in the absence of

an agreement to the contrary, renewed from year to year, or from month to month, according to

the purpose for which the property is leased, as specified in section 106.

Illustrations

(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100.

The five years expire, but C continues in possession of the house and pays the rent to A. C's

lease is renewed from month to month.

(b) A lets a farm to B for the life of C. C dies, but B continues in possession with A's assent. B's

lease is renewed from year to year.

EXEMPTION OF LEASES FOR AGRICULTURAL PURPOSES [S. 117 OF THE TRANSFER OF

PROPERTY ACT, 1882]

None of the provisions of this Chapter V apply to leases for agricultural purposes, except insofar

as the State Government may, by notification published in the Official Gazette, declare all or any

of such provisions to be so applicable in the case of all or any of such leases, together with, or

subject to, those of the local law, if any, for the time being in force.

Such notification shall not take effect until the expiry of six months from the date of its

publication. Law related to these provisions in different cases has been discussed in subsequent

chapters at appropriate places.

RELEVANT STATUTORY PROVISIONS ABOUT THE PROTECTION OF TENANTS

AGAINST HARASSMENT AND EXPLOITATION BY AVARICIOUS LANDLORDS

As mentioned above, law relating to tenancy is governed by the Transfer of Property Act, 1882.

Because of scarcity of accommodation and gradual high rise in the rents due to various factors,

after the Second World War, the landlords were in a position to exploit the situation for

unjustified personal gains to the serious detriment of the helpless tenants. Under these

circumstances it became imperative for the Legislature to intervene to protect the tenants against

harassment and exploitation by avaricious landlords and appropriate legislation came to be

passed in all the States and Union territories where the situation required an interference by the

Legislature in this regard. The topic of Transfer of Property other than agricultural land is

covered by Entry 6 of List III to the Seventh Schedule to the Constitution. Therefore both States

as well as Centre are empowered to legislate on the subject. In this scenario, different States have

different Rent Acts, but there is no basic or fundamental difference in regard to the law of

eviction of a tenant in any of the State Rent Acts and many of them by starting certain provisions

with a non-obstante clause8 have done away with the law engrafted in section 108 of the Transfer

of Property Act, 18829.

RIGHTS AND REMEDIES AVAILABLE TO THE LANDLORD AGAINST TENANT AND VICE-

VERSA.

The law relating to tenancy is governed under the common law by the Transfer of Property Act.

Accordingly, the rights and remedies of the landlord and tenant are governed by the law of

Contract and the law governing property relations. Section 108 lays down the rights and

liabilities of the lessor and the lessee. Section 111 provides various modes for determination of

the lease. The moment the contract of tenancy between the lessor and the lessee comes to an end,

by any of the modes mentioned in section 111, landlord has the right to repossess the rented

premises and to get the tenant evicted. However, landlord's normal rights vested in him by the

general law, thus, continue to exist till and so long they are not abridged by the special protective

legislation, like different State Rent Acts.

Therefore, it is apparent these State Rents Act, are nothing but social legislations meant for the

protection of the needy and the weaker sections of the society. These State Rent Acts, make

appreciable inroad on the freedom of contract because after the determination of the lease, tenant

gets the protective shield under the aforesaid special protective legislation. However, it is

pertinent to mention here that the protection does not create any vested right which can operate

beyond the period of protection or during the period the protection is not in existence. When the

protection does not exist, the normal relations of landlord and tenant come into operation. The

theory of vested right, which may validly be pleaded in support of landlord's case will not be

available to the tenant where the tenant undoubtedly had the rights and remedies under the

protective legislation, to claim reliefs against the landlord, but lost the same, the moment the

protection was taken away since the rights and remedies being not vested ones.

8 For example, section 14 of the Delhi Rent Control Act, 1958 starts with non-obstante clause9 Section 108 deals with rights and liabilities of lessor and lessee

"CONTRACTUAL TENANCY" AND "STATUTORY

TENANCY"

All the State Rent Acts, by way of non-obstante clause in the respective provisions provide that

despite the lease having been determined between the parties, no order or decree for recovery of

possession of the rented premises can be made by any court in favour of the landlord against the

tenant. Thus complete bar is put over repossession of the premises by the landlord. Therefore, in

this way, the rent control legislations encroach upon the freedom of contract, because the tenant

gets the protective umbrella under the special legislation of Rent Act, even on termination of the

tenancy. Right of the landlord to seek eviction of the tenant under the general law, merely on

terminating the tenancy stands suspended so long as and to the extent of protective legislation

operates. However, this complete ban on the eviction of the tenant is lifted to some extent by

providing certain grounds of eviction to the landlord under the Rent Act, on the basis of which

application can be made in prescribed manner for recovery of possession of the premises for

example, proviso to sub-section (1) of section 14 of the Delhi Rent Control Act, 1958.

Thus, the relationship of the landlord and tenant under the Transfer of Property Act, the basis of

which is a contract, entered into between the parties, amounts to 'contractual tenancy', a term

which does not find mention in any Indian Act or judgment of the Indian Courts. However, for

the sake of convenience, the term has been often used to denote the tenancy under the Transfer of

Property Act, so as to distinguish it from the statutory tenancy under the Rent Acts. A contractual

tenant, under the Transfer of Property Act, becomes a statutory tenant, after the determination of

lease, because such a tenant gets immunity from eviction due to non-obstante clause used in

relevant provisions of different State Rent Acts. Such a statutory tenant cannot be evicted except

on the grounds mentioned in the State Rent Acts.

TENANT AT SUFFERANCE, TENANT AT WILL AND TENANT BY HOLDING OVER

"Tenant at sufferance" is one who comes into possession of land by lawful title, but who holds it

by wrong after the termination of the term of expiry of the lease by efflux of time. The tenant at

sufferance is, therefore, one who wrongfully continues in possession after extinction of a lawful

title. There is little difference between him and a trespasser. A tenancy at sufferance is merely a

fiction to avoid continuance in possession operating as a trespass. It has been described as the

least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract

and arises only by implication of law when a person who has been in possession under a lawful

title continues in possession after that title has been determined, without the consent of the

person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant.

The act of the holding over after the expiration of the term does not necessarily create a tenancy

of any kind. If the lessee remaining in possession after determination of the term, the common

law rule is that he is the tenant on sufferance. The expression "holding over" is used in the sense

of retaining possession10. A distinction should be drawn between a tenant continuing in

possession after the determination of the lease, without the consent of the landlord and a tenant

doing so with the landlord's consent. The former is called a tenant by sufferance in the language

of the English law and the latter class of tenants is called 'a tenant holding over' or 'a tenant at

Will'. The lessee holding over with the consent of the lesser is in a better position than a mere

tenant at Will. The tenancy on sufferance is converted into a tenancy at Will by the assent of the

landlord, but relationship of the landlord and the tenant is not established until the rent was paid

and accepted. The assent of the landlord to the continuance of the tenancy after the determination

of the tenancy would create a new tenancy. The possession of a tenant who has ceased to be a

tenant is protected by law. Although he may not have a right to continue to possession after the

termination of the tenancy, his possession is judicial.11"

There is thus, however a subtle difference resultantly a definite distinction between a 'tenant by

holding over' and a tenant at sufferance. Holding over stands equivalent to the retention of

possession after determination of lease, but with the consent of the landlord-whereas, on similar

circumstances if the possession is without the consent of the landlord then the same stands out to

be a tenant at sufferance. Section 116 of the Transfer of Property Act, does let a statutory

recognition to the concept of holding over.

The expression 'statutory tenancy' has been coined by the Judges in England and, like many other

concepts in English Law it has been imparted into the jurisprudence of this country and has

become an expression of common use to denote a tenant whose contractual tenancy has been

determined but who is continuing in possession of the premises by virtue of the protection

against the eviction afforded to him by the rent control legislation. Though the expression

10 Mulla, Transfer of Property Act, 7th Edn., pp. 633, 76911 R.V. Bhupal Prasad v. State of Andhra Pradesh, AIR 1966 SC 140.

'statutory tenancy' is not an expression to be found in any provision of the Delhi Rent Control

Act, 1958 or the rent control legislation of any other State, but it find recognition in almost every

rent control legislation. The expression used in our country is a matter of evidence to distinguish

it from the concept of statutory tenancy. Genetically the parentages of these two legal concepts

namely contractual tenancy and statutory tenancy is different, one owning its origin to contract

and the other to rent control legislation. The contractual tenancy which is brought into existence

by virtue of contract entered into between the landlord and tenant in terms of section 105 of the

Transfer of Property Act, 1882, becomes statutory tenancy the moment the lease between the

parties is determined by any of the modes as mentioned in section 111. Such statutory tenancy,

after determination of the lease, gets immunity from the eviction under the rent control

legislation and as such becomes a statutory tenancy. There is no dispute that 'contractual tenancy

is heritable', the contract being the essence of the whole concept. However, with regard to

statutory tenancy, the dispute was resolved by a Constitution Bench of the Supreme Court in

Gian Devi Anand v. Jeevan Kumar12. In this case the question arose as to whether under the

Delhi Rent Control Act, 1958, the statutory tenancy in respect of commercial premises is

heritable or not. More precisely the question was whether the heirs of a deceased tenant whose

statutory tenancy, in respect of commercial premises has been determined; are entitled to same

protection against eviction afforded by the Act to the tenant.

Two concurring judgments were delivered, one by Bhagwati, J. and second by Justice

Amarendra Nath Sen. By Bhagwati J., held that the definition of 'tenant' in section 2(l) of the

Delhi Rent Control Act, 1958 - reference was made to the provisions of the Delhi Rent Control

Act, 1958 because that is the statute with which the Court was concerned in the present case -

includes a statutory tenant. It says in clause (ii) that 'tenant' includes any person continuing in

possession after the termination of his tenancy'. Such a person would not be a tenant under the

ordinary law but he is recognized as a 'tenant' by the rent control legislation and is therefore

described as a statutory tenant as contra-distinguished from contractual tenant. The statutory

tenant is, by virtue of inclusion in the definition of 'tenant', placed on the same footing as

contractual tenant so far as rent control legislation is concerned. The rent control legislation in

fact, does not make any distinction between contractual tenant and statutory tenant. "It does not

permit the landlord to snap his relationship with the tenant merely by his act of serving a notice

12 (1985) 2 SCC 683

to quit on him. In spite of the notice, the law says that he continues to be a tenant and he does so

enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities

such as payment of rent etc., in accordance with the law." The distinction between contractual

tenancy and statutory tenancy is thus completely obliterated by the rent control legislation.

Though genetically the parentage of these two legal concepts is different, one owing its origin to

contract and the other to rent control legislation, they are equated with each other and their

incidents are the same. If a contractual tenant has an estate or interest in the premises which is

heritable, it is difficult to understand why a statutory tenant should be held not to have such

heritable estate or interest. In one case, the estate or interest is the result of contract while in the

other it is the result of statute. But the quality of the estate or interest is the same in both cases.

The difficulty in recognizing that a statutory tenant can have estate or interest in the premises

arises from the fact that throughout the last century and the first half of the present, almost until

recent times, our thinking has been dominated by two major legal principles, namely, freedom of

contract and sanctity of private property and therefore we are unable to readily accept that legal

relationships can be created by statute despite want of contractual consensus and in derogation of

property rights of the landlord. We are unfortunately not yet reconciled to the idea that the law is

moving forward from contract to status. Why can estate or interest in property not be created by

statute? When the rent control legislation places a statutory tenant on the same footing as a

contractual tenant, wipes out the distinction between the two and invests a statutory tenant with

the same right, obligations and incidents as a contractual tenant, why should it be difficult to hold

that, just like a contractual tenant, a statutory tenant also has estate or interest in the premises

which can be inherited. Of course, strong reliance was placed on behalf of the landlord on

section 2(iii) of the Delhi Rent Control Act, 1958 to combat this conclusion but that provision

merely limits or circumscribes the nature and extent of the protection that should be available on

the death of a statutory tenant in respect of residential premises. It does not confer a new right of

heritability which did not exist allude.

Justice Amarendra Nath Sen vide a detailed reasoning.

By Amarendra Nath Sen J, rejected the contention of the landlord/respondent that on the

determination of the statutory tenancy the tenancy comes to an end and the tenant ceased to have

any estate or interest in the premises.

First argument vis-a-vis loss of estate interest in the tenanted premises:-It was contended that on

determination of tenancy the tenant becomes liable to be evicted under the general law of land;

but the rent control legislation affords protection to the tenant against such eviction inasmuch as

the Act provides that in respect of the termination of the tenancy, no order or decree for

possession shall be passed against the tenant, unless any of the grounds mentioned in the Act,

which entitles the landlord to recover possession of the premises from the tenant, is established.

Thus, it was contended that protection afforded to the tenant under the Act is against eviction

except on grounds recognized by the Act and therefore the protection is only in the nature of

personal protection to the tenant who continues to remain in possession after the termination of

the tenancy. In nutshell the contention was that the tenant loses the estate or interest in the

tenanted premises after termination of the statutory tenancy and the tenant by virtue of the Act is

afforded only a protection against eviction. Hence, the heirs of such tenants after his death

acquire no interest or estate in the premises, because the deceased tenant had none and they can

also claim no protection against eviction as the protection under the Act is personal to the tenant

as long as the tenant continues to remain in possession of the premises after the determination of

the tenancy. In other words, the protection against eviction after termination of tenancy afforded

to the tenant by the Act creates a personal right in favour of the tenant, who continues to remain

in possession after termination of his tenancy without any estate or interest in the premises; and

therefore on the death of such a tenant, his heirs who have neither any estate nor interest in the

tenanted premises, who did not have any protection under the Act against eviction, are liable to

be evicted as a matter of course under the ordinary law of land. In this regard,

landlord/respondent relied upon various decisions including those of High Courts, English

Courts and also passages from Halsbury's Laws of England and other eminent English authors;

Gian Devi Anand v. Jeevan Kumar, MANU/SC/0381/1985: (1985) 2 SCC 683 (688-715).

With regard to the English Law cited before the Court it was held that the same cannot be relied

upon because the provisions of the English Rent Acts are not in pari materia with the provisions

of the Act in question or the other Rent Acts prevailing in other States in India. The English Rent

Acts which have come into existence from time to time were no doubt introduced for the benefit

of the tenants. It may be noted that the term "statutory tenant" which is not to be found in the Act

in question or in the other analogous Rent Acts in force in other States in India, is indeed a

creature of the English Rent Act. English Rent Act, 1977 which was enacted to consolidate the

Rent Act, 1968, parts III, IV and VIII of the Housing Finance Act, 1972, the Rent Act, 1974,

sections 7 to 10 of the Housing Rents and Subsidies Act, 1975 and certain related enactments,

with amendments to give effect to recommendation of the Law Commission, speaks of protected

tenants and tenancies in section 1 and defines statutory tenant in section 2. English Rent Act,

1977 is in the nature of a complete Code governing the rights and obligations of the landlord and

the tenant and their relationship in respect of tenancies covered by the Act. As the provisions of

the English Act, are materially different from the provisions of the Act in question and other

Rent Control Acts, in force in other States in India, the decisions of the English Courts and the

passages from the various authoritative books including the passages from Halsbury which are

all concerned with English Rent Acts are not of any particular assistance in deciding the question

involved in this appeal. As already noticed, the term 'statutory tenant' is used in English Rent Act

and though this term is not found in the Indian Acts, in the Judgments of this Court and also of

the various High Courts in India, this term has often been used to denote a tenant whose

contractual tenancy has been terminated but who has become entitled to continue to remain in

possession by virtue of the protection afforded to him by the statutes in question, namely, the

various Rent Control Acts, prevailing in different States of India.

HERITABILITY OF STATUTORY TENANCY

In Damadi Lal v. Parashram,13 the question arose was whether the heirs of the statutory tenant

had any heritable interest in the demised premises and had the right to prosecute the appeal in the

High Court on the death of the statutory tenant.

A statutory tenant, meaning a tenant whose tenancy has determined but who continues in

possession, has no power of subletting. A statutory tenant has no interest in the premises

occupied by him, and he has no estate to assign or transfer. A statutory tenant is, as we have

already observed, a person who on determination of his contractual right, is permitted to remain

in occupation so long as he observes and performs the conditions of the tenancy and pays the

standard rent and permitted increases. His personal right of occupation is incapable of being

transferred or assigned, and he having no interest in the property there is no estate on which sub-

letting may operate.

13 Damadi Lal v. Parashram, 1976 (4) SCC 855

A tenant whose contractual tenancy has determined but who is protected against eviction by the

statute has no right of property but only a personal right to remain in occupation, without

ascertaining what his rights are under the statute. The concept of a statutory tenant having no

estate or property in the premises which he occupies is derived from the provisions of the

English Rent Acts. But it is not clear how it can be assumed that the position is the same in this

country without any reference to the provisions of the relevant statute. Tenancy has its origin in

contract. There is no dispute that a contractual tenant has an estate or property in the subject-

matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed,

however, that with the determination of the tenancy the estate must necessarily disappear and the

statute can only preserve his status of irremovability and not the estate he had in the premises in

his occupation. It is not possible to claim that the 'sanctity' of contract cannot be touched by

legislation, it is therefore necessary to examine the provisions of the Madhya Pradesh

Accommodation Control Act, 1961 to find out whether the respondents' predecessors-in-interest

retained a heritable interest in the disputed premises even after the termination of their tenancy.

Ganpat Ladha's case.-

In order to appreciate the question, the Court thought it necessary to understand the kind of

protection that is sought to be afforded to a tenant under the Rent Acts and his status after the

termination of the contractual tenancy under the Rent Acts. It is not in dispute that so long as the

contractual tenancy remains subsisting, the contractual tenancy creates heritable rights; and, on

the death of a contractual tenant, the heirs and legal representatives step into the position of the

contractual tenant; and, in the same way on the death of a landlord the heirs and legal

representatives of a landlord become entitled to all the rights and privileges of the contractual

tenancy and also come under all the obligations under the contractual tenancy. A valid

termination of the contractual tenancy puts an end to the contractual relationship. On the

determination of the contractual tenancy, the landlord becomes entitled under the law of the land

to recover possession of the premises from the tenant in due process of law and the tenant under

the general law of the land is hardly in a position to resist eviction, once the contractual tenancy

has been duly determined. Because of scarcity of accommodation and gradual high rise in the

rents due to various factors, the landlords were in a position to exploit the situation for

unjustified personal gains to the serious detriment of the helpless tenants. Under those

circumstances it became imperative for the legislature to intervene to protect the tenants against

harassment and exploitation by avaricious landlords and appropriate legislation came to be

passed in all the States and Union Territories where the situation required an interference by the

legislature in this regard. It is no doubt true that the Rent Acts are essentially meant for the

benefit of the tenants. It is, however, to be noticed that the Rent Acts at the same time also seek

to safeguard legitimate interests of the landlords. The Rent Acts which are indeed in the nature of

social welfare legislation are intended to protect tenants against harassment and exploitation by

landlords, safeguarding at the same time the legitimate interests of the landlords. The Rent Acts

seek to preserve social harmony and promote social justice by safeguarding the interests of the

tenants mainly and at the same time protecting the legitimate interests of the landlords. Though

the purpose of the various Rent Acts appear to be the same, namely, to promote social justice by

affording protection to tenants against undue harassment and exploitation by landlords, providing

at the same time for adequate safeguards of the legitimate interests of the landlords, the Rent

Acts undoubtedly lean more in favour of the tenants for whose benefit the Rent Acts are

essentially passed. It may also be noted that various amendments have been introduced to the

various Rent Acts from time to time as and when situation so required for the purpose of

mitigating the hardship of tenants.14

Keeping in view the main object of rent control legislation, the position of a tenant whose

contractual tenancy has been determined has to be understood in the light of the provisions of the

Rent Acts. Though provisions of all the Rent Control Acts, are not uniform, the common feature

of all the rent control legislation is that a contractual tenant on the termination of the contractual

tenancy is by virtue of the provisions of the Rent Acts not liable to be evicted as a matter of

course under the ordinary law of the land and he is entitled to remain in possession even after

determination of the contractual tenancy and no order or decree for eviction will be passed

against a tenant unless any ground which entitles the landlord to get an order or decree for

possession specified in the Act is established. In other words, the common feature of every Rent

Control Act, is that it affords protection to every tenant against eviction despite termination of

tenancy except on grounds recognized by the Act and no order or decree for eviction shall be

passed against the tenant unless any such ground is established to the satisfaction of the Court.15

14 Gian Devi Anand v. Jeevan Kumar, MANU/SC/0381/1985: (1985) 2 SCC 683 (688-715).15 Gian Devi Anand v. Jeevan Kumar, MANU/SC/0381/1985: (1985) 2 SCC 683 (688-715).

The Court also held that it cannot be assumed that with the determination of the tenancy, the

estate must necessarily disappear and the statute can only preserve the status of irremovability

and not the estate he has in the premises in his occupation; and it is not possible to claim that the

sanctity of contract cannot be touched by legislation. As already noticed, this Court in

Damadilal's case (supra) after referring mainly to the definition of tenant in section 2(i) of the

Madhya Pradesh Accommodation Control Act, 1961 came to the conclusion that the so-called

statutory tenant had an interest in the premises occupied by him and the heirs of the statutory

tenant "had a heritable interest in the premises".

Thereafter the Court analysed the provision of the Delhi Act to decide whether there is anything

in the other provisions to indicate that the tenant as defined in section 2(1)(ii) will stand on any

different footing from a contractual tenant in the matter of enjoyment of protection and benefits

sought to be afforded on a tenant by the Act. It was observed:

Analysis of various provisions of Delhi Act.-"Section 2(e) defines landlord and clearly indicates

that the landlord continues to be the landlord for the purpose of the Act even after termination of

the contractual tenancy. Section 2(l) which defines 'tenant' has been set out earlier in its entirety.

We shall consider the true effect of section 2(l)(iii) on which as earlier noted, reliance has been

placed by the learned Counsel of the landlords, when we deal with the argument which has been

advanced on the basis of this sub-section. Section 3 mentions premises which are outside the

purview of this Act and has no bearing on the question involved. Chapter II of the Act consists of

sections 4 to 13 and makes provision regarding rent. These sections indicate that they are

applicable to tenants as defined in section 2(l) including 2(l)(iii). Chapter III consists of sections

14 to 25 of the Act and deals with eviction and control of eviction of tenants. Section 14 starts as

follows:-

"Notwithstanding anything to the contrary contained in any other law or contract, no order or

decree for the recovery of possession of any premises shall be made by any Court or Controller

in favour of the landlord against a tenant;"

Thereafter various provisions are made as to grounds and under what circumstances a decree for

eviction may be passed. This section, therefore, clearly postulates that despite the termination of

the tenancy and notwithstanding the provisions of any other law which might have been

applicable on the termination of the contractual tenancy, protection against eviction is applicable

to every tenant as defined in section 2(l) of the Act. This section clearly establishes that

determination of a contractual tenancy does not disqualify him from continuing to be a tenant

within the meaning of this Act and the tenant whose contractual tenancy has been determined

enjoys the same position and is entitled to protection against eviction. The other sections in this

chapter also indicates that the tenant whose tenancy has been terminated enjoys the same status

and benefit as a tenant whose tenancy has not been terminated, and a tenant after termination of

his tenancy stands on the same footing as the tenant before such termination. Chapter IIIA which

provides for summary trial for certain applications also does not make any distinction between a

tenant whose tenancy has been determined and a tenant whose tenancy had not been terminated.

Chapter IV which deals with deposit of rent consists of sections 26 to 29 and these sections make

it clear that the tenant after determination of a tenancy is treated under the Act on the same

footing as a tenant whose tenancy has not been determined. Chapter V which consists of sections

30 to 34 deals with hotels and lodging houses and does not have any relevance to the question

involved. Chapter VI which consists of sections 35 to 43 provides for appointment of Controllers

and their powers and functions and also makes provisions with regard to appeals. This Chapter

though not very material for the purpose of adjudication of the point involved indicates that no

discrimination is made in the matter of proceedings for eviction between the so called 'statutory

tenant' and a 'contractual tenant'. Chapter VII which consists of sections 44 to 49 makes

provisions regarding obligations of landlords and also provides for penalties in appropriate cases.

The sections make it clear that the duties and obligations cast upon the landlord apply equally

whether the tenant is a so called 'statutory tenant' or the tenant is a 'contractual tenant'. Chapter

VIII which makes various miscellaneous provisions does not have any bearing on the question

involved. It may, however, be noted that section 50 which bars the jurisdiction of Civil Courts in

respect of certain matters does not in any way discriminate between a 'so-called statutory tenant'

and a contractual tenant. The provisions of the Act, therefore, make it abundantly clear that the

Act does not make any distinction between a 'so-called statutory tenant' and a contractual tenant

and the Act proceeds to treat both alike and to preserve and protect the status and rights of a

tenant after determination of the contractual tenancy in the same way as the status and rights of a

contractual tenant are protected and preserved."

Dhanpal Chettiar's cases.-

"Once the liability to be evicted is incurred by the tenant, he cannot turn round and say that the

contractual lease has not been determined. The action of the landlord in instituting a suit for

eviction on the ground mentioned in any State Rent Act will be tantamount to an expression of

his intention that he does not want the tenant to continue as his lessee and the jural relationship

of lessor and lessee will come to an end on the passing of an order or a decree for eviction. Until

then, under the extended definition of the word 'tenant' under the various State Rent Acts, the

tenant continues to be a tenant even though the contractual tenancy has been determined by

giving a valid notice under section 106 of the Transfer of Property Act. In many cases, the

distinction between a contractual tenant and a statutory tenant was alluded to for the purpose of

elucidating some particular aspects which cropped up in a particular case. That led to the

criticism of that expression in some of the decisions. Without detaining ourselves on this aspect

of the matter by any elaborate discussion, in our opinion, it will suffice to say that the various

State Rent Control Acts, make a serious encroachment in the field of freedom of contract. It does

not permit the landlord to snap his relationship with the tenant merely by his Act of serving a

notice to quit on him. Inspite of the notice, the law says that he continues to be a tenant and he

does so enjoying all the rights of a lessee and is at the same time deemed to be under all the

liabilities such as payment of rent etc. in accordance with the law."

These observations were made by a seven-Judge Bench of this Court. It is no doubt true that

these observations were made while considering the question of requirement of a notice under

section 106 of the Transfer of Property Act, 1882 before the institution of suit for recovery of

possession of premises to which the Rent Act applies. These observations, however, clearly go to

establish that mere determination of the contractual tenancy does not in any way bring about any

change in the status of a tenant. As aptly observed in this decision, "it will suffice to say that the

various State Rent Control Acts, make a serious encroachment in the field of freedom of

contract. It does not permit the landlord to snap his relationship with the tenant merely by his act

of serving a notice to quit on him. In spite of the notice, the law says that he continues to be a

tenant and he does so, enjoying all the rights of a lessee and is at the same time deemed to be

under all the liabilities such as payment of rent etc. in accordance with the law.

Further argument of Amendment of 1976 with retrospective effect in Delhi Act.-Thereafter, the

Court dealt with the further argument advanced on behalf of the landlord that the amendments to

the definition of the tenant with retrospective effect introduced by the Delhi Rent Control Act

(Amendment Act) (Act 18 of 1976) to give personal protection and personal right of continuing

in possession to the heirs of the deceased statutory tenant in respect of residential premises only

and not with regard to the heirs of the 'so-called statutory tenant' in respect of commercial

premises, indicates that the heirs 'so-called statutory tenant' therefore, do not enjoy any

protection under the Act. It was observed that this argument proceeds on the basis that in the

absence of any specific right created in favour of the 'so-called statutory tenant' in respect of first

tenancy, the heirs of statutory tenant who do not acquire any interest or estate in the tenanted

premises, become liable to be evicted as a matter of course. The Court held that the very premise

on the basis of which the argument is advanced is unsound. The termination of the contractual

tenancy in view of the definition of the 'tenant' in the Act does not bring out any change in the

status and legal position of the tenant, unless there are contrary provisions in the Act and the

tenant notwithstanding termination of the tenancy does enjoy an estate or interest in the tenanted

premises. This interest or estate which the tenant under the Act despite termination of the

contractual tenancy continues to enjoy creates a heritable interest in the absence of any provision

to the contrary. Supreme Court observed that this view has been taken in Damadilal's case and

this decision represents the correct position in law.

The observations of Supreme Court in the decision of the Seven-Judge Bench in the case of V.

Dhanpal Chettiar v. Yesodai Ammal (supra), appears to have concluded the question. The

amendment of the definition of tenant by the Act 18 of 1976 introducing particularly 2(l)(iii)

does not in any way mitigate against this view. The said sub-section (iii) with all the three

Explanations thereto is not in any way inconsistent with or contrary to sub-section (ii) of section

2(l) which unequivocally states that tenant includes any person continuing in possession after the

termination of his tenancy. In the absence of the provision contained in sub-section 2(l)(iii) the

heritable interest of the heirs of the statutory tenant would devolve on all the heirs of the 'so-

called statutory tenant' on his death and the heirs of such tenant would in law step into his

position. This sub-section (iii) of section 2(l) seeks to restrict this right insofar as the residential

premises are concerned. The heritability of the statutory tenancy which otherwise flows from the

Act is restricted in case of residential premises only to the heirs mentioned in section 2(l)(iii) and

the heirs therein are entitled to remain in possession and to enjoy the protection under the Act in

the manner and to the extent indicated in sub-section 2(l). The legislature, which under the Rent

Act affords protection against eviction to tenants whose tenancies have been terminated and who

continue to remain in possession and who are generally termed as statutory tenants, is perfectly

competent to lay down the manner and extent of the protection and the rights and obligations of

such tenants and their heirs. Section 2(l)(iii) of the Act does not create any additional or special

right in favour of the heirs of the 'so-called statutory tenant' on his death, but seeks to restrict the

right of the heirs of such tenant in respect of residential premises. As the status and rights of

contractual tenant even after determination of his tenancy when the tenant is at times described

as the statutory tenant, are fully protected by the Act and the heirs of such tenants become

entitled by virtue of the provisions of the Act to inherit the status and position of the statutory

tenant on his death, the legislature which has created this right has thought it fit in the case of

residential premises to limit the rights of the heirs in the manner and to the extent provided in

section 2(l). It appears that the legislature has not thought it fit to put any such restrictions with

regard to tenants in respect of commercial premises in this Act.

Distinction between commercial and residential premises:- The Court also noted that for certain

purposes the legislature in the Delhi Act in question and also in various other Rent Acts has

treated commercial premises differently from residential premises. Section 14(1)(d) provides that

it will be a good ground for eviction of a tenant from residential premises, if the premises let out

for use as residence is not so used for a period of six months immediately before the filing of the

application for the recovery of possession of the premises. Similarly, section 14(1)(e) makes

bona fide requirement of the landlord of the premises let out to the tenant for residential purposes

a good ground for eviction of the tenant from such premises. These grounds, however, are not

made available in respect of commercial premises. Though recently the Apex Court by way of

Indicial acticism made the ground of bona fide requirement available even in cases of

commercial premises also.

Intention of legislature:-A tenant of any commercial premises has necessarily to use the premises

for business purposes. Business carried on by a tenant of any commercial premises may be and

often is, his only occupation and the source of livelihood of the tenant and his Intention of

legizlature family. Out of the income earned by the tenant from his business in the commercial

premises, the tenant maintains himself and his family; and the tenant, if he is residing in a

tenanted house, may also be paying his rent out of the said income. Even if tenant is evicted from

his residential premises, he may with the earnings out of the business be in a position to arrange

for some other accommodation for his residence with his family. When, however, a tenant is

thrown out of the commercial premises, his business which enables him to maintain himself and

his family comes to a stand-still. It is common knowledge that it is much more difficult to find

suitable business premises than to find suitable premises for residence. It is no secret that for

securing commercial accommodation, large sums of money by way of salami, even though not

legally payable, may have to be paid and rents of commercial premises are usually very high.

Besides, a business which has been carried on for years at a particular place has its own goodwill

and other distinct advantages. The death of the person who happens to be the tenant of the

commercial premises and who was running the business out of the income of which the family

used to be maintained, is itself a great loss to the members of the family to whom the death,

naturally, comes as a great blow. Usually, on the death of the person who runs the business and

maintains his family out of the income of the business, the other members of the family who

suffer the bereavement have necessarily to carry on the business for the maintenance and support

of the family. A running business is indeed a very valuable asset and often a great source of

comfort to the family as the business keeps the family going. So long as the contractual tenancy

of a tenant who carries on the business continues, there can be no question of the heirs of the

deceased tenant not only inheriting the tenancy but also inheriting the business and they are

entitled to run and enjoy the same. As already noted, mere termination of the contractual tenancy

does not bring about any change in the status of the tenant and the tenant by virtue of the

definition of the 'tenant' in the Act and the other Rent Acts continues to enjoy the same status and

position unless there be any provisions in the Rent Acts which indicate to the contrary. The mere

fact that in the Act no provision has been made with regard to the heirs of tenants in respect of

commercial tenancies on the death of the tenant after termination of the tenancy, as has been

done in the case of heirs of the tenants of residential premises, does not indicate that the

legislature intended that the heirs of the tenants of commercial premises will cease to enjoy the

protection afforded to the tenant under the Act. The legislature could never have possibly

intended that with the death of a tenant of the commercial premises, the business carried on by

the tenant, however flourishing it may be and even if the same constituted the source of

livelihood of the members of the family, must necessarily come to an end on the death of the

tenant, only because the tenant died after the contractual tenancy had been terminated. It could

never have been the intention of the legislature that the entire family of a tenant depending upon

the business carried on by the tenant will be completely stranded and the business carried on for

years in the premises which had been let out to the tenant must stop functioning at the premises

which the heirs of the deceased tenant must necessarily vacate, as they are afforded no protection

under the Act. The Apex Court opined that in case of commercial premises governed by the

Delhi Act, the legislature has not thought it fit in the light of the situation at Delhi to place any

kind of restriction on the ordinary law of inheritance with regard to succession. It may also be

borne in mind that in case of commercial premises the heirs of the deceased tenant not only

succeed to the tenancy rights in the premises but they succeed to the business as a whole. It

might have been open to the legislature to limit or restrict the right of inheritance with regard to

the tenancy as the legislature had done in the case of the tenancies with regard to the residential

houses but it would not have been open to the legislature to alter under the Rent Act, the Law of

Succession regarding the business which is a valuable heritable right and which must necessarily

devolve on all the heirs in accordance with law. The absence of any provision restricting the

heritability of the tenancy in respect of the commercial premises only establishes that

commercial tenancies notwithstanding the determination of the contractual tenancies will

devolve on the heirs in accordance with law and the heirs who step into the position of the

deceased tenant will continue to enjoy the protection afforded by the Act and they can only be

evicted in accordance with the provisions of the Act.

Another significant consideration.-There is another significant consideration, which lends

support to this view that commercial premises are let out not only to individuals but also to

Companies, Corporations and other statutory bodies having a juristic personality. In fact,

tenancies in respect of commercial premises are usually taken by Companies and Corporations.

When the tenant is a Company or a Corporation or anybody with juristic personality, question of

the death of the tenant will not arise. Despite the termination of the tenancy, the Company or the

Corporation or such juristic personalities, however, will go on enjoying the protection afforded

to the tenant under the Act. It can hardly be conceived that the legislature would intend to deny

to one class of tenants, namely, individuals the protection which will be enjoyed by the other

class' namely, the Corporations and Companies and other bodies with juristic personality under

the Act. If it be held that commercial tenancies after the termination of the contractual tenancy of

the tenant are not heritable on the death of the tenant and the heirs of the tenant are not entitled to

enjoy the protection under the Act, an irreparable mischief which the legislature could never

have intended is likely to be caused. Any time after the creation of the contractual tenancy, the

landlord may determine the contractual tenancy, allowing the tenant to continue to remain in

possession of the premises, hoping for an early death of the tenant, so that on the death of a

tenant he can immediately proceed to institute the proceeding for recovery and recover

possession of the premises as a matter of course, because the heirs would not have any right to

remain in occupation and would not enjoy the protection of the Act. This could never have been

intended by the legislature while framing the Rent Acts for affording protection to the tenant

against eviction that the landlord would be entitled to recover possession, even no grounds for

eviction as prescribed in the Rent Acts are made out.

Consequently the Court held that if the Rent Act in question defines a tenant in substance to

mean a tenant who continues to remain in possession even after the termination of the

contractual tenancy till a decree for eviction against him is passed. The tenant even after the

determination of the tenancy continues to have an estate or interest in the tenanted premises and

the tenancy rights both in respect of residential premises and commercial premises are heritable.

The heirs of the deceased tenant in the absence of any provision in the Rent Act to the contrary

will step into the position of the deceased tenant and all the rights and obligations of the

deceased tenant including the protection afforded to the deceased tenant under the Act will

devolve on the heirs of the deceased tenant. As the protection afforded by the Rent Act to a

tenant after determination of the tenancy and to his heirs on the death of such tenant is a creation

of the Act for the benefit of the tenants, it is open to the legislature which provides for such

protection to make appropriate provisions in the Act with regard to the nature and extent of the

benefit and protection to be enjoyed and the manner in which the same is to be enjoyed. If the

legislature makes any provision in the Act limiting or restricting the benefit and the nature of the

protection to be enjoyed in a specified manner by any particular class of heirs of the deceased

tenant on any condition laid down being fulfilled, the benefit of the protection has necessarily to

be enjoyed on the fulfilment of the condition in the manner and to the extent stipulated in the

Act. The legislature which by the Rent Act seeks to confer the benefit on the tenants and to

afford protection against eviction, is perfectly competent to make appropriate provision

regulating the nature of protection and the manner and extent of enjoyment of such tenancy

rights after the termination of contractual tenancy of the tenant including the rights and the

nature of protection of the heirs on the death of the tenant. Such appropriate provision may be

made by the legislature both with regard to the residential tenancy and commercial tenancy. It is,

however, entirely for the legislature to decide whether the legislature will make such provision or

not. In the absence of any provision regulating the right of inheritance, and the manner and

extent thereof and in the absence of any condition being stipulated with regard to the devolution

of tenancy rights on the heirs on the death of the tenant, the devolution of tenancy rights must

necessarily be in accordance with the ordinary law of succession.

Further, before concluding the judgment, the Court made the following mentioned observation

for the suitable amendment in the rent control legislation:

"Before concluding, there is one aspect on which we consider it desirable to make certain

observations. The owner of any premises, whether residential or commercial, let out to any

tenant, is permitted by the Rent Control Acts, to seek eviction of the tenant only on the ground

specified in the Act, entitling the landlord to evict the tenant from the premises. The restrictions

on the power of the landlords in the matter of recovery of possession of the premises let out by

him to a tenant have been imposed for the benefit of the tenants. In spite of various restrictions

put on the landlord's right to recover possession of the premises from a tenant, the right of the

landlord to recover possession of the premises from the tenant for the bona fide need of the

premises by the landlord is recognized by the Act, in case of residential premises. A landlord

may let out the premises under various circumstances. Usually a landlord lets out the premises

when he does not need it for own use. Circumstances may change and a situation may arise when

the landlord may require the premises let out by him for his own use. It is just and proper that

when the landlord requires the premises bona fide for his own use and occupation, the landlord

should be entitled to recover the possession of the premises which continues to be his property in

spite of his letting out the same to a tenant. The legislature in its wisdom did recognize this fact

and the legislature has provided that bona fide requirement of the landlord for his own use will

be a legitimate ground under the Act, for the eviction of his tenant from any residential premises.

This ground is, however, confined to residential premises and is not made available in case of

commercial premises. A landlord who lets out commercial premises to a tenant under certain

circumstances may need bona fide the premises for his own use under changed conditions in

some future date should not in fairness be deprived of his right to recover the commercial

premises. Bona fide need of the landlord will stand very much on the same footing in regard to

either class of premises, residential or commercial. We therefore, suggest that legislature may

consider the advisability of making the bona fide requirement of the landlord a ground of

eviction in respect of commercial premises as well; Gian Devi Anand v. Jeevan Kumar,

MANU/SC/0381/1985: (1985) 2 SCC 683 (688-715)."

It is pertinent to mension here that the Supreme Court subsequent in Satyawati Sharma v. UOI,

2008 (6) SCALE 325, has extended the ground of bona fide requirement for eviction of the

tenant even to business premises also after relying upon Gian Devi's judgment.

THE PRINCIPLES LAID DOWN IN GIAN DEVI'S CASE WITH REGARD TO HERITABILITY

OF TENANCY.

1. A seven Judges Bench decision on V. Dhanpal Chettiar v. Yesodai Desi' Judgement

Ammal, has completely obliterated the distinction between the contractual tenancy and

statutory tenancy therefore if a contractual tenant has an estate or interest in the premises

which is heritable, it is difficult to understand why a statutory tenant should be held not to

have such heritable estate or interest. In one case, the estate and interest is the result of

contract while in the other result of statute.

2. The English law, which has been relied upon to distinguish between the statutory tenancy

and the contractual tenancy in India, cannot be made applicable to our country, since

English Rent Acts are not in pari materia with the provision of the rent control legislation

prevailing in different States of our country.

3. Even rent control legislation places a statutory tenant on the same footing as the

contractual tenant with the same rights and obligations. It does not make any distinction

between the statutory tenant and a contractual tenant which is apparent from bare perusal

of various provisions of the rent control legislation including the definition of the tenant,

grounds of eviction, provisions relating to fixation of standard rents etc. None of these

provisions use either of the terms namely statutory or contractual. Rather, it makes

reference to only 'tenant' and not to statutory or contractual tenant.

4. Tenancy has its origin in contract. There is no dispute that contractual tenant has estate or

interest in the subject-matter of the tenancy. If a contractual tenant has an estate or

interest in the premises which is heritable, it is difficult to understand why a statutory

tenant should be held not to have such heritable estate or interest. In one case, the estate

or interest is the result of contract while in the other it is the result of statute. But the

quality of the estate or interest is the same in both cases.

5. By making amendment in the year 1976 in the definition of 'tenant', legislature has put

certain restrictions with regard to the heritability of statutory tenancy in respect of

residential premises. In view of these amendments only those legal representatives as

mentioned in the amended provisions and subject to the contentions mentioned therein,

can inherit the same. However, in respect of commercial premises no such restriction has

been put with regard to its heritability.

6. The legislature could never have possibly intended that with the death of a tenant of the

commercial premises, the business carried on by the tenant, however flourishing it may

be and even if the same constituted the source of livelihood of the members of the family,

must necessarily come to an end on the death of the tenant, only because the tenant died

after the contractual tenancy had been terminated. It could never have been the intention

of the legislature that the entire family of a tenant depending upon the business carried on

by the tenant will be completely stranded and the business carried on for years in the

premises which had been let out to the tenant must stop functioning at the premises which

the heirs of the deceased tenant must necessarily vacate, as they are afforded no

protection under the Act.

7. It might have been open to the legislature to limit or restrict right of inheritance with

regard to the tenancy as the legislature had done in case of tenancy with regard to the

residential houses. But it would not have been open to the legislature to alter under the

Rent Act, the law of succession regarding the business which is the valuable right and

which must necessarily devolve upon all the heirs in accordance with the law.

8. Commercial premises are let out not only to individuals but also to Companies,

Corporations and other statutory bodies having a juristic personality. In fact, tenancies in

respect of commercial premises are usually taken by Companies and Corporations. When

the tenant is a Company or a Corporation or anybody with juristic personality, question

of the death of the tenant will not arise. Despite the termination of the tenancy, the

Company or the Corporation or such juristic personalities, however, will go on enjoying

the protection afforded to the tenant under the Act. It can hardly be conceived that the

legislature would intend to deny to one class of tenants, namely, individuals the

protection which will be enjoyed by the other class namely, the Corporations and

Companies and other bodies with juristic personality under the Act. If it be held that

commercial tenancies after the termination of the contractual tenancy of the tenant are not

heritable on the death of the tenant and the heirs of the tenant are not entitled to enjoy the

protection under the Act, an irreparable mischief which the legislature could never have

intended is likely to be caused.

9. Thus law laid down in Damadi Lal case was affirmed while over-ruling Ganpat Ladha's

judgment.

RENT CONTROL LEGISLATION

On account of rapid growth of population in urban areas, landlords were tempted to terminate the

tenancy of the existing tenants and asked for their eviction in order to let out the premises to the

new tenants at high rents. Therefore, various States passed their respective rent control

legislations for the first time during the second world war and since then there have been a rent

control legislations applicable to various urban areas in different States, whose provisions are

almost pari materia to each other, because they were enacted to provide for control of rents and

evictions. We would be discussing provisions regarding rent with special reference to the Delhi

Rent Control Act, 1958.

PROVISIONS REGARDING RENT WITH SPECIAL REFERENCE TO THE DELHI RENT

CONTROL ACT, 1958

Chapter 2 deals with provisions regarding rent. The chapter starts with section 4 which

specifically puts bar on recovery of rent in excess of standard rent unless such amount is lawful

increase of the standard rent in accordance with the provisions of the Act. The definition of

'standard rent' contained in section 2(k) that the standard rent of a building means the standard

rent referred to in section 6 or where the standard rent has been increased under section 7, such

increased rent. This definition is not an inclusive but an exhaustive definition and it defines the

standard rent to mean either the standard rent referred to in section 6 or the increased standard

rent under section 7. It is significant to note that it does not contain any reference to section 9,

sub-section (4). Whenever, therefore, any reference is made to standard rent in any provision of

the Rent Act, it must mean standard rent as laid down in section 6 or increased standard rent as

provided in section 7 and nothing more. Section 6 lays down the principles for determination of

standard rent in almost all conceivable classes of cases and section 7 provides for increase in the

standard rent where the landlord has incurred expenditure for any improvement, addition or

structural alteration in the premises. Section 9, as the definition in section 2(k) clearly suggests

and the marginal note definitely indicates, does not define what is standard rent but merely lays

down the procedure for fixation of standard rent. The compulsive force of the formulae laid

down in section 6 for the determination of standard rent and of the provisions of section 7 for

increase in standard rent is not in any way whittled down by sub-section (2) of section 9 but a

marginal discretion is given to the Controller to mitigate the rigour of the formulae where the

circumstances of the case so require. The only discretion given to him is to make adjustments in

the result arrived at on the application of the relevant formula, where it is necessary to do so by

reason of the fact that the landlord might have made some alteration or improvement in the

building or circumstances might have transpired affecting the condition or utility of the building

or some such circumstances of similar character. Even while fixing such rent, the Controller does

not enjoy unfettered discretion to do what he likes and he is bound to take into account the

standard rent payable in respect of similar or nearly similar premises in the locality. The standard

rent determinable on the principles set out in section 6, therefore, again becomes a governing

consideration. The legislature obviously did not intend to vest unguided discretion in the

Controller to fix such rent as he considers reasonable without any principles or norms to guide

him and, therefore, it provided that in fixing reasonable rent, the Controller shall take into

account the standard rent payable in respect of similar or nearly similar premises. The Controller

must derive guidance from the standard rent of similar or nearly similar premises in the locality

and apart from discharging the function of affording guidance to the Controller in fixing

reasonable rent, this requirement also seeks to ensure that there is no wide disparity between the

reasonable rent of the premises fixed by the Controller and the standard rent of similar or nearly

similar premises situate in the locality. The process of reasoning which the Controller would

have to follow in fixing reasonable rent would, therefore, be first to ascertain what is the standard

rent payable in case of similar or nearly similar premises in the locality, and then to consider how

far such standard rent in its application to the premises, needs adjustment having regard to the

situation, locality and condition of the premises and the amenities provided therein. The

reasonable rent so determined would be the standard rent of the premises fixed by the Controller.

There may, however, be cases where there are no similar or nearly similar premises in the

locality and in such cases guideline to the Controller would not be available and the Controller

would have to determine as best as he can what rent would be reasonable having regard to the

situation, locality and condition of the premises and the amenities provided therein. But such

cases would by their very nature be extremely rare and even there, the Controller would not be

on an uncharted sea: he would have to fix the reasonable rent of the premises taking into account

the standard rent of similar or nearly similar premises in the adjoining locality and making

necessary adjustments in such standard rent.16

THE PROCEDURE FOR THE LANDLORD TO INCREASE THE RENT CONTRACTED WITH

THE TENANT

In Theeta Industrial Heating Equipments (P) Ltd. v. Harvinder Singh17, it was observed that The

mode and manner of exercising option by the landlord to claim increase in the rent is contained

in section 8, which enjoins upon the landlord to serve a notice upon the tenant expressing and

conveying his intention to make increase in the rent. The increased rent becomes due and

recoverable on the expiry of 30 days from the date of the receipt of the same.

Facts of the case: The defendant was let out a portion of the suit premises by Pritpal Singh, the

father of the plaintiff at a rental of Rs. 1,350 p.m. through lease deed dated 30-9-1976. On

additional portion being let out, the rent was enhanced to Rs. 2,800 p.m. On the death of Pritpal

Singh, the plaintiff became the owner of the property on the basis of Will dated 24-2-1981

executed in his favour by Pritpal Singh. It is the admitted case of the parties that through lease

agreement Ext. PW 1/2 dated 1-9-1982 the plaintiff let out the premises in question to the

defendant on a monthly rent of Rs. 3,500. The agreement says that the lessor grants to the lessee

the entire ground floor except one room in the right side of the main entrance, first floor and

second floor in the property No. 487/79, Peera Garhi, Paschim Puri, Rohtak Road, Delhi for a

period of 11 months at a monthly rent of Rs. 3,500, for commercial factory purposes and the

lessee shall have the option to renew the lease, on the same rent, for a further period of 11

months, on the same terms and conditions.

On 2-7-1992 notice Ext. Public Witness 1/3 was served by the plaintiff on the defendant

demanding enhancement in rent at the rate of 10% and calling upon the defendant to increase the

rent to Rs. 3,850 p.m. while maintaining that the Delhi Rent Control Act, 1958 has no

application to the premises. According to the defendant enhancement was not agreed upon. The

defendant continued to remit rent at the rate of Rs. 3,500 p.m. Cheques were returned by the

plaintiff. It is stated that the plaintiff thereafter sent notice dated 19-12-1992 terminating the

16 Dr. Balbir Singh v. M.C.D., MANU/SC/0222/1984: AIR 1985 SC 339.17 Theeta Industrial Heating Equipments (P) Ltd. v. Harvinder Singh, 1996 (39) DRJ 739

defendant's tenancy w.e.f. 30-6-1993. On failure to vacate, on the basis of notice dated 19-12-

1992 the suit for eviction was filed.

The defendant contested the suit inter alia on the grounds: that enhancement claimed by the

plaintiff was unwarranted and illegal and the same was demanded merely to oust the defendant

from the protective umbrella of Delhi Rent Control Act, 1958; that even if lease agreement Ext.

PW 1/2, dated 1-9-1982 was unregistered the same, in view of section 49 of the Registration Act,

1908, can be looked into as regards the mode of determination of tenancy, being a collateral

purpose and under the terms of the lease agreement the plaintiff had no right to terminate the

lease; that the lease was for commercial factory purposes and the duration thereof will be from

year to year and thus under law the plaintiff could have terminated the same only on serving six

months' notice; the notice Ext. Public Witness 1/9 dated 19-12-1992 did not terminate the lease

by the end of the period of tenancy.

The suit was decreed holding that on service of notice Ext. Public Witness 1/3 the rent stood

enhanced to Rs. 3,850 p.m., as such the premises in question are governed by the general

provisions of the Transfer of Property Act, 1882 and not by the Delhi Rent Control Act, 1958,

the tenancy was rightly terminated by due service of notice Ext .PW 1/9, the Court had

jurisdiction to try the suit and the defendant was liable to pay damages after the tenancy was

terminated, which as per the prevailing rent in the locality was held to Rs. 20,000 p.m. The

judgment and decree passed by the Trial Court is now under challenge by the defendant

primarily on the ground that there has been no valid termination of tenancy. The plaintiff could

not have by his unilateral act enhanced the contractual rent from Rs. 3,500 to Rs. 3,850 and

thereby debar the defendant from the protective umbrella of the Delhi Rent Control Act, 1958.

Judgment and decree is also under challenge with regard to the quantum of damages granted at

the rate of Rs. 20,000 p.m.

Findings of the Court: The Division Bench of the Delhi High Court through Devender Gupta,

Justice observed that there is a material difference between the rights which accrue to a landlord

under the Common law and the protection which is afforded to the tenant under the Rent Control

Legislation. In the former case the rights and remedies of the landlord and tenant are governed

by the law of contract and the law governing property relations. These rights and remedies

continued to govern their relationship unless they are regulated by protective legislation, in

which case the said rights and remedies remain suspended till the protective legislation continues

to remain in operation. Landlord's normal rights, vested in him by the general law, thus, continue

to exist till and so long they are not abridged by the special protective legislation. Likewise in the

case of tenant the protective shield extended to him survive only so long and to the extent the

special protective legislation operates. As such, in the case of a tenant, the protection does not

create any vested right which can operate beyond the period of the protection or during the

period the protection is not in existence. When the protection does not exist the normal relations

of landlord and tenant come into operation. It was further held that the theory of vested right,

which may validly be pleaded in support of the landlord's case will not be available to the tenant

where the tenant undoubtedly had the rights and remedies under the protective legislation, to

claim reliefs against the landlord, lost the same, the moment the protection was taken away since

rights and remedies being not vested ones.

Undoubtedly under the protective legislation, namely, the Delhi Rent Control Act, 1958 the

defendant had the protected umbrella and by virtue of the said protected umbrella he could have

been evicted only on the strength of an order passed by Controller appointed under the Act and

that also on any of the grounds enumerated under the said Act. Right of the landlord to seek

eviction of the tenant under the general law, merely on terminating the tenancy stood suspended

and will be deemed to have remained under suspension so long as and to the extent the protective

legislation operates.

Delhi Rent Control Act, 1958 was amended by the Delhi Rent Control (Amendment) Act, 1988

(52 of 1988). Amendment came into effect from 1-12-1988. Section 3(c) of the amended Act

provided that the Delhi Rent Control Act, 1958 will not apply to any premises whose monthly

rent exceeded Rs. 3,500. Interpretation and constitutional validity of section 3(c) of the Delhi

Rent Control (Amendment) Act, 1988 was upheld in D.C. Bhatia v. UOI18.

The protection against eviction, except on proof of specified grounds, provided under the Delhi

Rent Control Act, 1958, which was available to the defendant, not being a vested right, in terms

of the ratio of the decision in Parripati Chandrasekhar Rao v. Alapati Jalaiah19 , it will not be

permissible to uphold the contention raised on behalf of the defendant that the plaintiff could not,

18 (1995) 1 SCC 104 19 (1995) 3 SCC 709

by his unilateral act, of serving a notice to enhance the rent, remove the protected shield

available to him. On a combined reading of sections 6A and 8 of the Delhi Rent Control Act,

1958 it cannot be disputed that the landlord will be entitled to claim increase in the rent of the

premies by 10% after every three years. Section 6A of the Act says that notwithstanding

anything contained in the Act the standard rent or where no standard rent is fixed under the

provisions of this Act in respect of any premises, the rent agreed upon between the landlord and

tenant may be increased by 10% every three years. Admittedly agreed rent was Rs. 3,500, which

was fixed in the year 1981. Landlord under section 6A of the Act as of a right could claim

increase by 10%. The mode and manner of exercising the option by the landlord to claim

increase in the rent is contained in section 8, which enjoins upon the landlord to serve a notice

upon the tenant expressing and conveying his intention to make increase in the rent. The

increased rent becomes due and recoverable on the expiry of 30 days from the date on which

notice is given. It is not disputed that notice Ext. PW 1/2 in writing was sent on behalf of the

plaintiff in the manner as provided in section 8 of the Delhi Rent Control Act, 1958. The

enhancement in rent became effective on the expiry of 30 days from the date of receipt of the

letter.

With regard to the challenge to the impugned judgment on the ground of requiring six months

notice to determine the lease it was held that an unregistered lease for manufacturing purpose

cannot be deemed to be an yearly lease for the purpose of notice of termination, in view of the

provisions contained in section 107 of the Transfer of Property Act, 1882. Consequetly, it was

held that, the notice terminating tenancy in the instant case could not be held to be invalid and no

interference was called for in the impugned judgment of the Trial Court holding that the tenancy

of the defendant was rightly terminated.

PREMISES: EXEMPTION FROM APPLICABILITY OF RENT CONTROL LEGISLATION

With specific reference to the Delhi Rent Control Act, 1958 it is submitted that section 3

provides that the Act shall not apply (a) to any premises belonging to the Government; (b) to any

tenancy or other like relationship created by a grant from the Government in respect of the

premises taken on lease, or requisitioned, by the Government: Provided that where any premises

belonging to Government have been or are lawfully let by any person by virtue of an agreement

with the Government or otherwise, then, notwithstanding any judgment, decree or order of any

court or other authority, the provisions of this Act shall apply to such tenancy; (c) to any

premises whether residential or not, whose monthly rent exceeds three thousand and five

hundred rupees; (d) to any premises constructed on or after the commencement of the Delhi Rent

Control (Amendment) Act, 1988, for a period of ten years from the date of completion of such

construction.

It is pertinent to note here that the above noted proviso to clause (b) was inserted in the year

1963, with retrospective effect. Similarly, clauses (c) and (d) were incorporated in the year 1988,

with a view to encourage the landlord for the supply of accommodation on rent to meet the rising

demands of houses in metropolitan cities. It is further worth while to mention at this juncture that

in the Delhi Rent Control Act, 1995, enacted by the Parliament, which is yet to come into force,

the aforesaid exemption of the premises from the applicability of the Act was further extended.

In this regard, are reproduced as the statement of objects and reasons mentioned below:-

The relations between landlords and tenants in the National Capital Territory of Delhi are

presently governed by the Delhi Rent Control Act, 1958. This Act came into force on the 9th

February, 1959. It was amended thereafter in 1960, 1963, 1976, 1984 and 1988. The

amendments made in 1988 were based on the recommendations of the 'Economic Administration

Reforms Commission and the National Commission on Urbanisation. Although they were quite

extensive in nature, it was felt that they did not go far enough in the matter of removal of

disincentives to the growth of rental housing and left many questions unanswered and problems

unaddressed. Numerous representations for further amendments to the Act were received from

groups of tenant and landlord and others.

The demand for further amendments to the Delhi Rent Control Act, 1958 received fresh impetus

with the tabling of the National Housing Policy in both Houses of Parliament in 1992. The policy

has since been considered and adopted by Parliament. One of its major concerns is to remove

legal impediments to the growth of housing in general and rental housing in particular Paragraph

4.6.2 of the National Housing Policy specifically provides for the stimulation of investment in

rental housing especially for the lower and middle income groups by suitable amendments to rent

control laws by State Government. The Supreme Court of India has also suggested changes in

rent control laws. In its judgment in the case of Prabhakaran Nair v. State of Tamil Nadu,20 the

20 AIR 1987 SC 2117: (1987) 4 SCC 238

court observed that the laws of landlords and tenants must be made rational, humane, certain and

capable of being quickly implemented. In this context, a Model Rent Control Legislation was

formulated by the Central Government and sent to the States to enable them to carry out

necessary amendments to the prevailing rent control laws. Moreover, the Constitution (Seventy-

fifth Amendment) Act, 1994 was passed to enable the State Governments to set up State level

rent tribunals for speedy disposal of rent cases by excluding the jurisdiction of all courts except

the Supreme Court.

In the light of the representations and developments referred to above, it has been decided to

amend the rent control law prevailing in Delhi. As the amendments are extensive and substantial

in nature, instead of making changes in the Delhi Rent Control Act, 1958, it is proposed to repeal

and replace the said Act by enacting a fresh legislation.

To achieve the above purposes, the present Bill, inter-alia, seeks to provide for the following,

namely:-

(a)exemption of certain categories of premises and tenancies from the purview of the proposed

legislation;

(b)creation of tenancy compulsorily to be by written agreement;

(c)compulsory registration of all written agreements of tenancies except certain circumstances;

(d)limit the inheritability of tenancies;

(e)redefine the concept of rent payable and provide for its determination, enhancement and

revision;

(f)ensure adequate maintenance and repairs of tenanted premises and facilitate further

improvement and additions and alterations of such premises;

(g)balance the interests of landlords and tenants in the matter of eviction in specified

circumstances;

(h)provide for limited period of tenancy and automatic eviction of tenants upon expiry of such

tenancy;

(i)provide for the fixing and revision of fair rate and recovery of possession in respect of hotels

and lodging houses;

(j)provide for a simpler and speedier system of disposal of rent cases through Rent Authorities

and Rent Tribunal and by barring the jurisdiction of all courts except the Supreme Court; and

(k)enhance the penalties for infringement of the provisions of the legislation by landlords and

tenants.

5. On enactment, the Bill will minimize distortion in the rental housing market and encourage the

supply of rental housing both from the existing housing stock and from new housing stock."

Thus, we find that certain more categories of premises and tenancies are sought to be exempted

by the proposed legislation. However, due to lot of protest from a particular section of the society

the said legislation has failed to see the light of the day.

GROUNDS OF EVICTION

The Rent Control Legislation puts a complete bar on the eviction of the tenants. In this regard,

specific reference is made to section 14 of the Delhi Rent Control Act, 1958, which is in part

material with other similar kind of provisions as contained in other State Rent Control

Legislations. Section 14 of the Delhi Rent Control Act, 1958 (in short 'Rent Control Act') starts

with a non-obstantic clause and states that notwithstanding anything to the contrary contain in

any other law or contract, no order or decree for the recovery of possession of any premises shall

be made by any Court or controller in favour of the landlord against a tenant. However, this bar

of eviction of a tenant at the instance of the landlord is lifted by proviso to section 14(1),

according to which, on an application made to the Controller in the prescribed manner, an order

for recovery of possession of the premises could be made on one or more of the grounds

mentioned therein. Therefore, a tenant can be evicted from the premises only on those grounds as

mentioned in the proviso to section 14(1) of the Rent Control. Though it is pertinent to mention

here that by way of amendment in the year 1976, some more grounds of eviction were made

available to the landlord in the form of sections 14A, 14B, 14C and 14D.

If none of these grounds exist tenant cannot be evicted from the premises and no application in

this regard would lie before the Rent Controller. Further, the burden to prove these grounds is on

the landlord. Some of the 'grounds of eviction' are discussed hereunder.

1. NON-PAYMENT OF RENT/ARREARS OF RENT

Clause (a) of the proviso to sub-section (1) of section 14 of the Rent Control Act, deals with this

ground of eviction. According to this ground, if the tenant has neither paid nor tendered the

whole of the arrears of the rent legally recoverable from him within two months of the date on

which a notice of demand for the arrears of the rent has been served on him by the landlord in the

manner provided in section 106 of the Transfer of Property Act, 1882 cause of action would arise

in favour of landlord to approach the Controller for eviction of the tenant. But sub-section 2 of

section 14 of the Delhi Rent Control Act, 1958 provides that no order for recovery of possession

shall be made on this ground if the tenant makes payment or deposit as required by section 15 of

the Rent Control Act. Section 15 provides that in such a case, even if the landlord has been able

to prove the allegation of non payment of arrears of rent, the Rent Controller shall, after giving

the parties an opportunity of being heard, make an order directing the tenant to pay to the

landlord or deposit with the Controller within one month of the date of the order, an amount

calculated at the rate of rent at which it was last paid for the period for which the arrears of the

rent were legally recoverable from the tenant including the period subsequent thereto up to the

end of the month previous to that in which payment or deposit is made and to continue to pay or

deposit, month by month, by the fifteenth of each succeeding month, a sum equivalent to the rent

at that rate.21

It is worthwhile to mention here that an application seeking an order on the tenant to pay to the

landlord the amount of rent legally recoverable from the tenant can also be made even in any

other proceedings for the recovery of the possession of any premises on any other ground under

the Rent Control Act and in such a situation, Controller may, after giving the parties an

opportunity of being heard, make an order in accordance with the provisions of sub-section (1).22

However, if in any proceedings qua non payment of rent by the tenant to the landlord, there is

any dispute as to the amount of rent payable by the tenant, the controller shall within 15 days of

the date of first hearing of such proceedings fix an interim rent in relation to the premises to be

paid or deposited in accordance with the provisions of the sub-section (1) or sub-section (2) of

section 15, as the case may be, until the standard rent in relation thereto is fixed having regard to

the provisions of the Rent Control Act and the amount of arrears, if any, calculated on the basis

of standard rent shall be paid or deposited by the tenant within one month of the date on which

the standard rent is fixed or such further time as the Controller may allow in this behalf.23

It is further provided that if there is any dispute as to the person or persons to whom rent is

payable, the controller may direct the tenant to deposit with the Controller, the amount payable

by him under sub-section (1), sub-section (2) or sub-section (3) as the case may be and in such a

case, no person shall be entitled to withdraw the amount in deposit until the Controller decides

the dispute and makes an order for payment of the same. However, if the Controller is satisfied

that such a dispute as to the identity of the landlord has been raised by the tenant for reasons,

21 Section 15(1) of the Delhi Rent Control Act, 1958.22 Section 15(2) of the Delhi Rent Control Act, 1958.23 Section 15(3) of the Delhi Rent Control Act, 1958.

which are false or frivolous, Controller may order the defence against eviction to be struck out

and proceed with the hearing of the application.24

Supreme Court observed that non-payment of rent is not a ground for eviction of the tenant

straightaway, since he has been granted an opportunity statutorily to make such payment within

two months from the date of receipt of the notice sent by the landlord to the tenant in this regard.

Second opportunity is granted by the Rent Controller under the Rent Control Legislation when

he is directed to make payment within one month from the date of such an order.25 If the tenant

complies with such a direction/order of the Controller, no order shall be made for recovery of

possession against the tenant in favour of the landlord on the ground of default in the payment of

rent by the tenant, though the Controller may allow such costs as he may deem fit to the

landlord.26

However, if the tenant fails to make payment or deposit as required by section 15(1) of the Rent

Control Act, Controller may order the defence against eviction to be struck out and proceed with

the hearing of the application.27But the question arises whether the Rent Controller, in view of

section 15(7) of the Rent Control Act, has power or jurisdiction to condone the delay or to extend

the time for depositing the rent and whether the order passed under section 15(1) had to be

strictly complied with. The Supreme Court has laid down that the word 'may' used in section

15(7) clearly shows that it is not obligatory on the Controller to strike down the defence if the

tenant fails to comply with the order, as passed under section 15(1) of the Rent Control Act.

Hence, the Controller has discretionary power, keeping in view the facts and circumstances of

the case, to condone the delay and secondly to extend the time for depositing the rent. It is also

pertinent to mention here that tenant cannot avail such a benefit if having obtained benefit once

in respect of any premises; he again makes a default in the payment of rent of those premises for

three consecutive months28.

24 Section 15(4) of the Delhi Rent Control Act, 1958.25 Section 15(1) of the Delhi Rent Control Act, 1958.26 Section 15(6) of the Delhi Rent Control Act, 195827 Section 15(7) of the Delhi Rent Control Act, 1958.28 14(2) No order for the recovery of possession of any premises shall be made on the ground specified in clause (a) of the proviso to sub-section (1) if the tenant makes payment or deposit as required by section 15: Provided that no tenant shall be entitled to the benefit under this sub-section, if, having obtained such benefit once in respect of any premises, he again makes a default in the payment of rent of those premises for three consecutive months.

2. SUB-LETTING THE RENTED OUT PREMISES

Clause (b) of the proviso to sub-section 1 of section 14 of the Rent Control Act, deals with this

ground of eviction. It is provided that if the landlord is able to prove before the Rent Controller

that the tenant has sublet the premises further, he is entitled to get back the possession of the

premises. However section 16 puts restrictions on sub-letting and provides that where at any time

before the 9th day of June 1952, a tenant has sublet the whole or any part of the premises and the

sub tenant is, at the commencement of this Act, in occupation of such premises, then

notwithstanding that the consent of the landlord was not obtained for such sub-letting, the

premises shall be deemed to have been lawfully sub-let.29

The section further provides that no premises which have been sub-let either in whole or in part

on or after the 9th day of June, 1952, without obtaining the consent in writing of the landlord,

shall be deemed to have been lawfully sub-let.30 However, after the commencement of the Rent

Control Act, it is provided that, no tenant shall, without the previous consent in writing of the

landlord (a) sub-let the whole or any part of the premises held by him as a tenant; or (b) transfer

or assign his rights in the tenancy or in any part thereof.31

The section further puts a bar on the landlord to claim or receive the payment of any sum as

premium or pugree or claim or receive any consideration whatsoever in cash or in kind for giving

his consent to the sub-letting of the whole or any part of the premises held by the tenant.32

If the provisions of section 16 have been complied with, in such a situation, the premises is

deemed to have been sub-let properly. Otherwise, the landlord is entitled to get the tenant evicted

in terms of clause (b) of proviso to section 14(1), which provides that the Controller may make

an order for recovery of possession of the premises on the ground that the tenant has, on or after

the 9th day of June, 1952, sub-let, assigned or otherwise parted with the possession of the

premises without obtaining the consent in writing of the landlord.33

Even after seeking permission of the landlord for creating sub-tenancy, the tenant is under

obligation to give notice of creation and termination of sub-tenancy in terms of section 17.

29 Section 16(1) of the Delhi Rent Control Act, 1958.30 Section 16(2) of the Delhi Rent Control Act, 1958.31 Section 16(3) of the Delhi Rent Control Act, 1958.32 Section 16(4) of the Delhi Rent Control Act, 1958.33 Section 14(1)(b) of the Delhi Rent Control Act, 1958.

Accordingly, whenever, after the commencement of the Rent Control Act, any premises are sub-

let either in whole or in part by the tenant with the previous consent in writing of the landlord,

the tenant or the sub-tenant to whom the premises are sub-let may, in the prescribed manner, give

notice to the landlord of the creation of the sub-tenancy within one month of the date of such

sub-letting and notify the termination of such sub-tenancy within one month of such

termination.34

On the other hand, where before the commencement of this Act, any premises have been

lawfully sub-let either in whole or in part by the tenant, the tenant or the sub-tenant to whom the

premises have been sub-let may, in the prescribed manner, give notice to the landlord of the

creation of the sub-tenancy within six months of the commencement of this Act, and notify the

termination of such sub-tenancy within one month of such termination. 35 At this juncture it

would be pertinent to mention here that definition of the tenant as provided in section 2(l) of the

Rent Control Act, also includes a sub-tenant, but it is for a purpose, for the conferment of rights

and obligations on such sub tenant wherever statute requires under various provisions of an Act,

of that which is conferred on a tenant. But this would have no application where Statute itself

treats both as 2 separate entities as is incorporated both in section 14(1)(b) and sections 16, 17

and 18 of the Act. When a tenant inducts a sub-tenant without written consent of a landlord, he

makes himself liable for eviction under section 14(1)(b) of the Act.

It would be fruitful to mention section 18 at this juncture which provides that where an order for

eviction in respect of any premises is made under section 14 against a tenant but not against a

sub-tenant referred to in section 17 and a notice of the sub-tenancy has been given to the

landlord, the sub-tenant shall, with effect from the date of the order, be deemed to become a

tenant holding directly under the landlord in respect of the premises in his occupation on the

same terms and conditions on which the tenant would have held from the landlord, if the tenancy

had continued.36

However, where before the commencement of Act, the interest of the tenant in respect of any

premises has been determined without determining the interest of any sub-tenant to whom the

premises either in whole or in part had been lawfully sub-let, the sub-tenant shall, with effect 34 Section 17(1) of the Delhi Rent Control Act, 1958.35 Section 17(2) of the Delhi Rent Control Act, 1958.36 Section 18(1) of the Delhi Rent Control Act, 1958.

from the date of the commencement of this Act, be deemed to have become a tenant holding

directly under the landlord on the same terms and conditions on which the tenant would have

held from the landlord, if the tenancy had continued.37

Thus, it is borne from a conjoin reading of sections 16, 17 and 18 that both tenant and sub-tenant

have been treated as separate entity38.

Sub-section 3 of section 14 of the Rent Control Act, provides that no order for the recovery of

possession in any proceeding under sub-section (1) shall be binding on any sub-tenant referred to

in section 17 who has given notice of his sub-tenancy to the landlord under the provisions of that

section, unless the sub-tenant is made a party to the proceeding and the order for eviction is made

binding on him.39

Sub-section 4 of the section 14 further clarifies that in any application for eviction of tenant on

the ground of sub-tenancy as provided in section 14(1)(b), any premises, which have been let for

being used for the purpose of business or profession shall be deemed to have been sub-let by the

tenant, if the Controller is satisfied that the tenant without obtaining the consent in writing of the

landlord has, after the 16th day of August, 1958, allowed any person to occupy the premises

ostensibly on the ground that such person is a partner of the tenant in the business or profession

but really for the purpose of sub-letting such premises to the person.40

3. NON-USER OF THE RENTED PREMISES FOR MORE THAN SIX MONTHS

Clause (d) of the proviso to sub-section (1) of the section 14 of the Delhi Rent Control Act, 1958

deals with this ground of eviction. It provides that if the premises were let for use as a residence

and neither the tenant nor any member of his family has been residing therein for a period of six

months immediately before the date of filing of the application for the recovery of possession

thereof, the landlord is entitled to get back the possession of the premises.

It has been observed by the Apex Court that a close analysis of section 14(1)(d) would reveal

that before the landlord can succeed, he must prove three essential ingredients:

37 Section 18(2) of the Delhi Rent Control Act, 1958.38 Kapil Bhargava v. Subhash Chand Aggarwal, 93 (2001) DLT 65 (SC)39 Section 14(3) of the Delhi Rent Control Act, 1958.40 Section 14(4) of the Delhi Rent Control Act, 1958.

(1)that the premises were let out for use as a residence,

(2)that the tenant after having taken the premises has ceased to reside, and

(3)that apart from the tenant no member of his family also has been residing for a period of six

months immediately before the date of the filing of the application for ejectment41.

4. IMPERMISSIBLE USER OF THE RENTED PREMISES

Clause (c) of the proviso to sub-section 1 of the section 14 of the Rent Control Act deals with

this ground of eviction. It provides that if the landlord is able to prove before the Rent Controller

that the tenant has used the premises for purpose other than that for which they were let-(i) If the

premises have been let on or after the 9th day of June, 1952, without obtaining the consent in

writing of the landlord; or (ii) If the premises have been let before the said date without obtaining

his consent; he is entitled to get back the possession of the premises.42

This ground of eviction has to be studied alongwith ground of eviction as provided under clause

(k) of the proviso to section 14(1). Because in both the grounds, tenant is alleged to be using the

premises for a different purpose. This aspect of the matter we would be discussing subsequently

when we would be dealing with section 14(1)(k). According to the ground of eviction as

provided in section 14(1)(c) the Rent Controller may make an order for recovery of possession of

the premises after the tenant has used the premises for purpose other than that for which they

were let.

However, sub-section 5 of the section 14 provides that no application for the recovery of

possession of any premises shall lie under sub-section (1) on the ground specified in clause (c) of

the proviso thereto, unless the landlord has given to the tenant a notice in the prescribed manner

requiring him to stop the misuse of the premises and the tenant has refused or failed to comply

with such requirement within one month of the date of service of the notice; and no order for

eviction against the tenant shall be made in such a case, unless the Controller is satisfied that the

misuse of the premises is of such a nature that it is a public nuisance or that it causes damage to

the premises or is otherwise detrimental to the interest of the landlord.43

41 Baldev Sahai Bagla v. R.C. Bhasin, MANU/SC/0216/1982: AIR 1982 SC 1091.42 Section 14(1)(c) of the Delhi Rent Control Act, 1958.43 Section 14(5) of the Delhi Rent Control Act, 1958

3. TENANT ACQUIRING VACANT POSSESSION OF OR HAS BEEN ALLOTTED A

RESIDENCE

We have already seen that on account of rapid growth of population in urban areas, the landlords

were tempted to terminate tenancies of the existing tenants and ask for their eviction in order to

let out the premises to new tenants at higher rents. The Rent Control Legislations were passed in

different States during the second world war so as to provide for the control of rent and eviction.

The object of the ground of eviction as provided in clause (h) of the proviso to sub-section (1) of

section 14 is not to allow the tenant more than one residence in Delhi. Therefore it provided that

in case tenants built the residence, the landlord could get the house vacated. It also provided that

if the tenant acquired vacant possession of any other residence, he is not protected. Lastly, it also

stipulated that if any premises has been allotted to the tenant he is not entitled to retain the

premises taken on rent by him. However, in the year 1988 by way of Rent Control (Amendment)

Act, 1988, the word "built" was omitted and consequently now the said provision reads as under:

"That the tenant has, whether before or after the commencement of this Act, acquired vacant

possession of, or been allotted, a residence."

5. USE OF PREMISES IN VIOLATION OF CONDITIONS OF LEASE STIPULATED BY

DDA/MCD

Section 14(1) of the Act gives protection to the tenants from being evicted from the premises let

out to them. Clauses (a) to (l) of the proviso to section 14(1) of the Act contain the grounds on

which recovery of possession of the premises can be ordered by the Controller. Where the

premises are used in a manner contrary to any condition imposed on the landlord by the

Government or the Delhi Development Authority or Municipal Corporation of Delhi, then the

landlord would be entitled to recovery of possession under section 14(1)(k) of the Act. Sub-

section (11) of section 14, however gives an option to the Controller to pass an order whereby

recovery of possession may not be directed. The alternative to an order for recovery of

possession under section 14(1)(k) is to pass an order under sub-section (11) of section 14 of the

Act, whereby the tenant is directed to comply with the conditions imposed on the landlord by the

authorities referred to in clause (k) namely to stop the misuser of the premises in question. Sub-

section (11) of section 14 also uses the words "pays to that authority such amount by way of

compensation as the Controller may direct". Keeping in view the fact that clause (k) of the

proviso to sub-section (1) has been inserted in order that the unauthorised use of the leased

premises should come to an end, and also bearing in mind that the continued unauthorised use

would give the principal lessor the right of re-entry after cancellation of the deed. The aforesaid

words occurring in sub-section (11) of section 14 cannot be regarded as giving an option to the

Controller to direct payment of compensation and to permit the tenant to continue to use the

premises in an unauthorised manner. The principal lessor may, in a given case, be satisfied, in

cases of breach of lease to get compensation only and may waive its right of re-entry or

cancellation of lease. In such a case the Controller may, instead of ordering eviction under

section 14(1)(k) of the Act, direct payment of compensation as demanded by the authorities

mentioned in clause (k). Where, however, compensation is demanded in respect of

condoning/removal of the earlier breach, but the authority insists that the misuser must cease

then the Controller has no authority to pass an order under section 14(11) or section 14(1)(k) of

the Act giving license or liberty of continued misuser. In other words, sub-section (11) of section

14 enables the Controller to give another opportunity to the tenant to avoid an order of eviction.

Where the authority concerned requires stoppage or misuser then an order to that effect has to be

passed, but where the authority merely demands compensation for misuser and does not require

the stoppage of misuser then only in such a case would the Controller be justified in passing an

order for payment of compensation alone.44

Difference between section 14(1)(c) and section 14(1)(k)

It would be pertinent to discuss at this juncture the ground of eviction provided to the landlord

under clause (c) of the proviso to section 14 of the Rent Control Act. (impermissible use of rent

premises). In both these grounds of eviction, as provided under sections 14(1)(c) and 14(1)(k),

there is an impermissible use of rented premises. But the difference lies in the fact that in clause

(k) the permissible use is contrary to any condition imposed on the landlord by the Government

or any other authority, while giving him a lease of the land on which the demised premise is

situated. However, here the impermissible use may be even with the consent of the landlord.

On the other hand under clause (c) the impermissible use of the premises by the tenant is without

the consent of the landlord. Hence, in clause (k), the tenant cannot take the plea that he is using

44 Dr. K. Madan v. Krishnawati, MANU/SC/0150/1997: AIR 1997 SC 579.

the premises for the alleged purpose with the consent of the landlord, since that would not be

defence available to him in an application for his eviction moved under the said clause, though

such a plea would negate the landlord a decree of eviction under section 14(1)(c). It has been laid

down that even if the tenant is using the demised premises with the consent of the landlord for

the purpose contrary to the condition imposed on him by the original lessor (the Government or

any another local authority), the landlord cannot be estopped from getting the tenant evicted for

that impermissible use of the suit premises.45

Such kind of stand can be taken only in an eviction petition filed under section 14(1) (c) of the

Rent Control Act. Hence, if it is a case where the tenant as contrary to the terms of his tenancy

used the building for commercial purpose, the landlord could take action under clause (c). He

need not depend upon clause (k) at all. These two clauses are intended to meet different situation.

There was no need for, an additional provision in clause (k) to enable the landlord to get

possession, where the tenant has used the building for a commercial purpose contrary to the

terms of the tenancy. An intention to put in a useless provision in a statute cannot be imputed to

the legislature somes meaning would have to be given to that provision. The only situation in

which it can take effect is whether the lease is for a commercial purpose agreed upon by both the

landlord and the tenant but that is contrary to the terms of the lease of the land in favour of the

landlord. This clause does not come into operation, where there is no provision in the lease in

favour of the landlord prohibiting its use for a commercial purpose.46

Recovery of Possession in case of Limited Period of Tenancy

The section 2147embodies the legislative policy to devise a special mechanism to increase the

supply of accommodation to meet the rising demands of a growing metropolis. It operates in

limited circumstances; and, strictly within those bounds, and subject to the vigilant enquiry of the

Controller before according his permission, the parties are, once permitted to regulate their

45 Dr. K. Madan v. Krishnawati, MANU/SC/0150/1997: AIR 1997 SC 579.46 Faquir Chand v. Ram Ratan, MANU/SC/0412/1973: AIR 1973 SC 921.47 Recovery of possession in case of tenancies for limited period.(1) Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed manner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not on the expiry of the said period, vacate such premises then, notwithstanding anything contained in section 14 or in any other law, the Controller may, on an application made to him in this behalf by the landlord within such time as may be prescribed, place the landlord in vacant possession of the premises or part thereof by evicting the tenant and every other person who may be in occupation of such premises.

relationship in accordance with the section, totally governed by the terms of their contract. The

section operates in terms thereof, notwithstanding any other law, unless the contract itself, or the

permission of the Controller is vitiated by fraud. Absent such vitiating circumstance, and once

the Controller has accorded sanction, the parties to the contract are presumed to have entered into

their relationship at arm's length and the law binds them to the terms of their agreement.48

While the Act, is meant for the protection of the tenant, the legislative policy reflected in section

21 is to carve out an area free of that protection. Where the conditions stipulated in section 21 are

satisfied, the prohibition contained in section 14 against eviction of tenants except on the

specified grounds or the requirements of the Transfer of Property Act, or the Civil Procedure

Code or any other law are removed or dispensed with. The section is attracted in the specific

circumstances postulated by it. The absence of requirement by the landlord of the whole or any

part of the premises for a particular period, the permission of the Controller in the prescribed

manner for the lease of the premises in question, the agreement in writing between the landlord

and the tenant for the lease of such premises as a residence for the agreed period, the refusal of

the tenant to vacate the premises on the expiry of that period, and an application made within the

prescribed time by the landlord invoking the power of the Controller under this section: these are

the conditions precedent to the exercise of power by the Controller to place the landlord in

vacant possession of the premises by evicting the tenant or any other person in occupation of

such premises. The person in occupation of the premises has no right in law to resist eviction

once the section is attracted. This is an extraordinary power vested in the Controller to restore

possession of the premises to the landlord by a quick and summary action. The non obstante

clause contained in the section protects the action of the Controller from challenge on any

ground postulated in section 14 of the Act, or any other law. This is a wide protection of any

action duly taken in terms of the section, but the requirements of the section must be strictly

complied with before action is taken under it.49

The order of the Controller in the circumstances warranted by the section is a self-executing

order requiring no further proceeding. It is at once a sanction for the lease and for eviction on

expiry of the period of the lease. Neither can the landlord evict the tenant during the period of the

lease nor can the tenant remain in possession beyond that period. Parties are bound by their

48 Shrisht Dhawan v. Shaw Brothers, MANU/SC/0295/1992: AIR 1992 SC 1555.49 Shrisht Dhawan v. Shaw Brothers, MANU/SC/0295/1992: AIR 1992 SC 1555.

contract, as sanctioned by the Controller, and the provisions of section 14 are of no avail to either

party to circumvent section 21. Once the period has expired, there is no question of any further

notice to the tenant or any other person in occupation of the premises and there is no scope for

any further proceeding. None has any right outside the section which operates strictly in terms

thereof provided the conditions stipulated therein are unquestionably satisfied.50

The only protection that the tenant has is what section 21 itself postulates. He is protected against

the conduct of a fraudulent landlord. The law does not protect either party whose actions are

tainted by fraud. A landlord seeking recovery in terms of that section must satisfy that he has

strictly complied with the provisions of that section. The landlord must obtain the permission of

the Controller in the manner prescribed. He is not entitled to the permission unless the condition

specified for the purpose in section 21 is satisfied, namely, the absence of his requirement of the

building for a particular period. The period must be clear and definite. The lack of requirement

must be honestly felt by the landlord. That the landlord does not require the building is a

question of honest belief held by him at the relevant time, that is, at the time of his seeking the

Controller's permission. The landlord must have honestly and reasonably believed that he would

not require the building for the period specified in his application to the Controller for

permission to let out the premises. If that belief was truthfully held by him at the time of his

application to the Controller, the fact that subsequent events proved him wrong, and that he did

not require the building not only for the period stated in the application, but also for a longer

period, or that he required it earlier than anticipated, would not make the belief any less honest or

valid. All that the landlord is required to state in his application for permission of the Controller

is the absence of his requirement of the premises for the particular period, but he is not bound to

state its reasons51.

What the section postulates is the bona fide belief of an honest and reasonable landlord, and not

the reckless and casual opinion of an irresponsible and careless person. The question is, did the

landlord make a fraudulent representation to the Controller about the absence of his requirement

of the premises, i.e., knowingly that his statement was false or without belief in its truth or

recklessly careless whether it was true or false. Did the landlord honestly believe that what he

stated in his application to be a true and fair representation of the facts? There is no fraud if what

50 ; J.R. Vohra v. India Export House Pvt. Ltd., MANU/SC/0384/1985: (1985) 1 SCC 712.51 Inder Mohan Lal v. Ramesh Khanna, MANU/SC/0762/1987: (1987) 4 SCC 1

he honestly believed to be true turned out to be false. The section does not place any higher

degree of responsibility on the landlord. The section requires that the premises have to be let out

solely for the purpose of residence for the period agreed to in writing. If the agreement does not

so stipulate, the section is not attracted, and the Controller cannot sanction the lease in terms of

the section. No non-residential premises can come within the protection of the section. On the

other hand, if the premises let out as a residence in terms of the section is deliberately used by

the tenant for nonresidential purposes, he loses the protection of the statute for the period of the

lease and the Controller can, on an application by the landlord, evict the tenant, or any other

person in occupation, and restore possession of the premises to the landlord forthwith. The

section protects the landlord and the tenant strictly in terms thereof, and on the fraud or

deliberate breach by either party of the terms of the lease as contemplated by the section, the

protection is withdrawn from the guilty party. This means, if the permission of the Controller has

been fraudulently obtained by the landlord, and the tenant has been let into the premises, the

landlord loses the right to seek eviction of the tenant by the summary procedure contemplated by

the section. Likewise, if the tenant has deliberately but not accidentally violated the terms of the

lease by using the premises otherwise than as permitted by the section, he is liable to be evicted

on an application by the landlord, although the stipulated period of the lease has not expired. All

this is because the very basis of the Controller's order has been violated by the fundamental

breach of the guilty party. The section thus postulates that both the landlord and the tenant act

honestly. Neither of them can take advantage of his own deceit or breach. No sanction of the

statutory authority procured by fraud can protect the guilty or harm the innocent.52

Fraud is essentially a question of fact, the burden to prove which is upon him who alleges it. He,

who alleges fraud, must do so promptly. There is a presumption of legality in favour of a

statutory order. The Controller's order under section 21 is presumed to be valid until proved to be

vitiated by fraud or mala fide. If his order was obtained by the fraud of the party seeking it or if

he made a 'mindless order' in the sense of acting mala fide by illegitimate exercise of power

owing to non-application of his mind to the strict requirements of the section, then the special

mechanism of the section would not operate.53

52 Shrisht Dhawan v. Shaw Brothers, MANU/SC/0295/1992: AIR 1992 SC 1555.53 S.B. Noronah v. Prem Kumari Khanna, MANU/SC/0502/1979: (1980) 1 SCC 52.

SUMMARY PROCEDURE

Chapter IIIA, which was inserted in the Rent Control Act, by Amendment Act of 1976, is

entitled 'Summary Trial of Certain Applications'. It consists of three sections, namely, sections

25A, 25B and 25C. Section 25A provides that the provisions of Chapter IIIA or any rule made

thereunder shall have effect notwithstanding anything inconsistent therewith contained elsewhere

in the Act or in any other law for the time being in force. Section 25B prescribes as its marginal

heading shows a 'special procedure for the disposal of applications for eviction on the ground of

bona fide requirement'.

Under section 25B every application by a landlord for the recovery of possession of any

premises, on the ground specified in clause (e) of the proviso to section 14(1), or under section

14A, or under section 14B54, or under section 14C55 or under 14D56, is to be dealt with in

accordance with the special procedure prescribed by this section.

The special procedure which has been prescribed for these cases is that on an application being

filed on either of these two grounds the Controller is to issue a summons in the form specified in

the Third Schedule to the Act. This summons is to call upon the tenant to appear before the

Controller within fifteen days of the service of the summons and to obtain leave of the Controller

to contest the application for eviction, and it intimates to him that in default of his doing so, the

applicant would be entitled after the expiry of the said period of fifteen days to obtain an order

for his eviction. Leave to appear and to contest the application is to be obtained by the tenant on

an application made to the Controller supported by an affidavit. This affidavit is to disclose such

facts as would disentitle the landlord from obtaining an order for the recovery of possession of

the premises on the ground specified in clause (e) of the proviso to section 14(1) or under section

14A.

When leave is granted to the tenant to contest the application, the Controller is to commence the

hearing of the application as early as practicable. In holding such an enquiry, the Controller is to

54 Right to recover immediate possession of premises to accrue to members of the Armed Forces. 55 Right to recover immediate possession of premises to accrue to Central Government and Delhi Administration employees.56 Right to recover immediate possession of premises to accrue to widow.

follow the practice and procedure of a Court of Small Causes including the recording of

evidence. No appeal or second appeal lies against an order for the recovery of possession of any

premises made by the Controller in accordance with this special procedure. The High Court is,

however, given the right to call for the records of the case for the purpose of satisfying itself that

an order made by the Controller under this section is according to law and to pass such order in

respect of thereto as it thinks fit.57

It is now well-settled that though the Statement of objects and Reasons accompanying a

legislative Bill cannot be used to determine the true meaning and effect of the substantive

provisions of a statute, it is permissible to refer to the Statement of Objects and Reasons

accompanying a Bill for the purpose of understanding the background, the antecedent state of

affairs, the surrounding circumstances in relation to the statute, and the evil which the statute

sought to remedy. It will, therefore, be convenient to reproduce at this stage the statement of

Objects and Reasons accompanying Bill No. XII of 1976, which when enacted became the Delhi

Rent Control (Amendment) Act, 1976. The said Statement of Objects and Reasons is as follows:-

There has been a persistent demand for amendments to the Delhi Rent Control Act, 1958 with a

view to conferring a right of tenancy on certain heirs/successors of a deceased statutory tenant so

that they may be protected from eviction by landlords and also for simplifying the procedure for

eviction of tenants in case the landlord requires the premises bona fide for his personal

occupation. Further, Government decided on the 9th September, 1975 that a person who owns

his own house in his place of work should vacate the Government accommodation allotted to

him before the 31st December, 1975. Government considered that in the circumstances, the Act,

required to be amended urgently.

By the special procedure provided in section 25B the delay normally involved in following the

procedure under section 37 of the Act, is sought to be cut down and the tenant is made to apply

and obtain leave to contest the eviction application. Further, the tenant's right of appeal and

second appeal have been taken away and the only remedy left to him against an order of eviction

passed by the Controller under section 25B is to approach the High Court in revision.

57 Narain Khamman v. Parduman Kr. Jain, MANU/SC/0319/1984: AIR 1985 SC 4.

It is pertinent to mention here that the legislature has given the provisions of this Chapter or any

rule made thereunder overriding effect on the other provisions of the Rent Control Act, or any

other law for the time being in force. One may find some parallel between the procedure

provided in this Chapter and the summary procedure as provided under Order 37 of the Code of

Civil Procedure. However, the concept about the summary procedure as inserted in the Act, by

way of aforesaid Chapter IIIA.58

58 Gazette of India, Extra., Pt. II, Sec. 2, dated January 19, 1976, p. 410.

REMEDY AGAINST CUTTING OFF OR WITHHOLDING

ESSENTIAL SUPPLY OR SERVICE

The tenant cannot enjoy the premises let out to him by the landlord unless and until it is coupled

with other essential supplies/services without which the living in that premise is not possible.

These include water, electricity, lights in passages and on staircases, conservancy and sanitary

services.59 Section 45 of the RCA makes it obligatory on the part of the landlord to provide those

essential supplies or services and not to cut off or withhold the same. Therefore, section 45of the

Rent Control Act, makes these provisions. It provides that no landlord either himself or through

any person purporting to act on his behalf shall without just and sufficient cause cut off or

withhold any essential supply or service enjoyed by the tenant in respect of the premises let to

him.60 If a landlord contravenes the provisions of sub-section (1), the tenant may make an

application to the Controller complaining of such contravention.61 If the Controller is satisfied

that essential supply or service was cut off or withheld by the landlord with a view to compel the

tenant to vacate the premises or to pay an enhanced rent, the Controller may pass an order

directing the landlord to restore the amenities immediately, pending the inquiry referred to in

sub-section (4).62The section further provides that an interim order may be passed under this sub-

section without giving notice to the landlord.63If the Controller on inquiry finds that the essential

supply or service enjoyed by the tenant in respect of the premises was cut off or withheld by the

landlord without just and sufficient cause, he shall make an order directing the landlord to restore

such supply or service.64The Controller may in his discretion direct that compensation not

exceeding fifty rupees-

(a) be paid to the landlord by the tenant, if the application under sub-section (2) was made

frivolously or vexatiously;

59 Explanation I to section 4560 Sub-section 161 Sub-section 262 Sub-section 363 Explanation to sub-section 364 Sub-section 4

(b) be paid to the tenant by the landlord, if the landlord had cut off or withheld the supply or

service without just and sufficient cause.65

By way of explanation it has been mentioned in this section that essential supply or service

includes supply of water, electricity, lights in passages and on staircases, conservancy and

sanitary services.66 Similarly, it is also clarified in the section that for the purposes of this section,

withholding any essential supply or service shall include acts or omissions attributable to the

landlord on account of which the essential supply or service is cut off by the local authority or

any order competent authority.67

65 Sub-section 5. 66 Explanation I to sub-section 567 Explanation II to sub-section 5

CONCLUSION

The basic objective of the rent control legislation is to protect the tenant against exorbitant rents,

arbitrary increases in the rent and ensure him security of tenure. The legislation has been

necessitated by conditions of scarcity prevailing in rental housing markets of urban areas. As

housing is a State subject, different State Governments have framed their own rent control laws.

By 1972, almost all the States in the country had enacted Rent control Acts (RCA).

The rent control Acts are generally applicable to all urban areas in the States and to most of the

residential and non-residential premises in these urban areas. The exempted premises include

those belonging to the Union Government, State Government and local authorities. Some states

also exclude from the preview of the Act properties falling below or above certain rental values,

newly constructed properties, as also properties belonging to charitable Trusts etc. In each city

these exemptions account for a significant proportion of the total rental housing stock.

The Acts typically contain in regard to the following provisions: a) control on letting and leasing

of vacant buildings to assist tenants in their search for desirable rented accommodation, b)

fixation of ‘fair’ or ‘standard’ rent, c) protection to tenants against indiscriminate eviction by

unscrupulous landlords, d) obligations and duties of landlords vis-a-vis maintenance and upkeep

of their rented properties, e) rights of landlords against tenants who default in paying rent or

misuse the premises, and f) rights of landlords for the recovery of premises in specific cases.

There is a near unanimous opinion that the social objectives of rent control acts have not been

realized. The widening divergence between the interests of landlords and tenants has not only led

to increased litigation under rent control Acts (the rent control cases make for a majority of cases

in courts) but also to increased crimes. A large number of criminal cases have their origin in

disputes over rented properties.

BIBLIOGRAPHY

Articles

1. Dev Satvik, Rent Control Laws in India A Critical Analysis, NIUA WP 06-04

2. Ojha, Shraddha, Protection against eviction and fixation of fair rent, available at :

http://legalservicesindia.com/article/print.php?art_id=510

Books

1. Madabhushi Sridhar, Unfair rent Uncontrolable Control, (Hyderabad: Asia Law House)

2009

2. V.P. Sarthi, Law of Transfer of Property, (Lucknow: Eastern Book Co.) 2005

http://legalservicesindia.com/article/print.php?art_id=510

law relating on rent

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