Overview Of Rent Laws
Divanshu Jain, Advocate
Punjab & Haryana High Court, Chandigarh
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Date : 22/09/2022 Location : House No. 3034, Sector 21-D, Chandigarh
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Overview Of Rent LawsPurpose of the Rent Act: The East Punjab Urban Rent Restriction Act 1949 is a complete code/legislation in itself which lays down complete procedure for adjudication of disputes between landlords and tenant and provides for classification of buildings as residential, non residential, scheduled as well as rented land. It further lays down the exhaustive procedure for protection of tenants from unscrupulous landlords, but also lays down detailed and exhaustive grounds under Section 13, Section 13-A and Section 13-B whereby the landlord could seek the eviction of his tenant. Grounds of Eviction enumerated in Sec: 13 of the Rent Act:
A) Arrears of rent
Note : In The Haryana Urban (Control of Rent & Eviction) Act, 1973 Arrears of Rent can be claimed only for last three years whereas there is no such embargo in The East Punjab Urban Rent Restriction Act,1949.Main Judgment on Non-Payment of Rent: "Rakesh Wadhawan v. M/s Jagdamba Industrial Corporation & Others" - 2002(1) R.C.R (Rent) 514
C) Change of User
D) Material Impairment
F) Cease to Occupy for continuous period of 4 month without sufficient cause
G) Bonafide Personal NecessityEarlier a landlord could seek eviction of his tenant only from a residential building in cases of bonafide need but subsequently even the non residential buildings came within the preview of bonafide need. "Harbilas Rai Bansal v. The State of Punjab & Anr" (AIR 1996 SC 857) Two basic mandatory Ingredients required to be pleaded in cases of Bonafide Personal Necessity:
(b) he is not occupying another residential building in the urban area concerned
(c) he has not vacated such a building without sufficient cause after the commencement of the Act, in the said Urban Area."Banke Ram v. Smt. Sarasti Devi" - AIR 1977 P&H 158 (Full Bench) However the strict proposition of pleading of the ingredients in an eviction petition has been diluted to a larger extent by various subsequent judicial pronouncements. "Gurbaj Singh v. Parshotam Singh" - 2011(2) R.C.R (Rent) 349. Section 13(A) Special Right given to Specified Landlords defined under Section 2(hh) (Government Employees) for seeking summary Eviction of their tenants. Section 13(B) Special Right given to N.R.I's defined under Section 2(dd) for seeking summary Eviction of their tenants. Main Judgment : "Baldev Singh Bajwa v. Mohnish Saini" - 2005(12) SCC 778 Section 18-A Provides for procedure of summary disposal of cases under Section 13(A) and Section 13(B). Under Section 18-A(8), there is no provision of filling appeal before Ld. Appellate Authority, only revision can be filed before the Hon'ble High Court in cases filed under 13-A and 13-B. Section 18-A lays down strict procedure for obtaining leave to contest in cases filed under Section 13-A and Section 13-B. Summons issued in such cases have to be as per "Schedule II" making Leave to defend to be filed mandatory within a period of 15 days from the date of service, failing which eviction order is to be passed automatically. Important Judgments under Section 18-A:
"Anwar Ali v. Gian Kaur" - 2011(2) R.C.R (Rent) 604 (Full Bench)
"Om Parkash v. Ashwani Kumar Bassi" - 2010(9) SCC 183.
"Precision Steel and Engineering Works v. Prem Deva Niranjan Dea Tayal" - 1982(3) SCC 270.Note:
There is no special provision of N.R.I's in Haryana Rent Act.
The tenancy laws in India are considered as "pro-tenant" but due to intervention of our judiciary through various landmark judgments, a sort of balance has been created upholding the rights of landlords in cases related to the eviction of tenants.
Rent controller is not to be treated as civil courts but persona designata, under the Act, who are free to design their own procedure, and strict principles of Code of Civil Procedure are not applicable to them.Powers of Appeal and Revision are provided in Section 15:
Section 15(2) - Appeal
Section 15(5) - Revision before the Hon'ble High Court.Main Judgment on Revisional Jurisdiction: "Hindustan Petroleum Corporation Limited v. Dilbahar Singh" - 2014(9) SCC 78 - Five Judges Bench. Appellate Authority under the Rent Act cannot Remand the matter to the Rent Controller but can either call for the report or examine on its own. Raghu Nath v. Romesh Duggal,(P&H) (D.B.) - 1980 AIR (PB) 188 Concept of Mesne Profits: The concept of Mesne Profits was introduced by the Hon'ble Apex Court in the case titled as "M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd" reported as 2005(1) SCC 705. The Hon'ble Apex Court observed that the tenant having suffered a decree or order for eviction may continue his fight before the superior forum but, on the termination of the proceedings and the decree or order of eviction first passed having been maintained, the tenancy would stand terminated with effect from the date of the decree passed by the lower forum. That the appellate Court has power to put the tenant-appellant on terms and direct the appellant to compensate the landlord by payment of a reasonable amount which is not necessarily the same as the contractual rate of rent. With the passing of the decree for eviction, the tenant is liable to pay mesne profits or compensation for use and occupation of the premises at the same rate at which the landlord would have been able to let out the premises and earn rent if the tenant would have vacated the premises. The landlord is not bound by the contractual rate of rent effective for the period preceding the date of the decree. Important Judgments on the issue of Mesne Profits:
• M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd" - 2005(1) SCC 705.
• Anderson Wright & Co v. Amarnath Roy 2005(1) RCR (Rent) 624
• State of Maharashtra v. M/s Super Max International Pvt. Ltd. - 2009(2) RCR (Rent) 246
• Mohammad Ahmad and Another v. Atma Ram Chauhan and others - 2011(1) R.C.R.(Rent) 394.
• Angoori Devi and others v. Smt. Satya Bhama - 2016(5) R.C.R (Civil) 1043.Mode of Determination:
"Surinder Kumar v. Rattan Lal" - 2006 (2) RCR (Rent) 26New Rent Act: Punjab Rent Act, 1995 That with the passage of time the East Punjab Rent Restriction Act 1949 has also been replaced by the Punjab Rent Act of 1995, which has come into force w.e.f. 30.11.2013 and as per section 75 of the 1995 Act, the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. III of 1949), stands repealed provided there are certain exceptions as enumerated in Section 75. Features of the Punjab Rent Act 1995-
(i) The Act provides for the regulation of rents, repairs and maintenance and eviction relating to premises and matters connected therewith in the State of Punjab. The Act applies only to the tenancies which have been created after the commencement of the new Act (except in case of NRI landlord).
(ii) Section 3 provides where the operation of the Act is exempted. Further, under section 3(2), contractual nonresidential tenancies will be governed by the terms of the contract during the subsistence of the contract.
(iii) Section 4 provides all new tenancies after the commencement of the Act are required to be through a registered agreement.Important Judgment : M/s A.R Ventures v. M/s Roop Square Pvt. Ltd. - 2021(2) R.C.R (Rent) 276.
(iv) The right of inheritance of tenancy of residential premises is governed by section 5 which lays down that inheritance is now limited to 10 years from the death of the tenant and is restricted to the heirs who are dependent upon and residing with the tenant, who have no other alternative accommodation. In the case of non-residential tenancies, property is required to be vacated within one year of death of the tenant or dissolution of the tenant firm as the case may be.
(v) As per section 6 the agreed rent shall be increased by five per cent of the last rent for two years and third year increase shall be based upon the increase in the Consumer Price index over the corresponding three years.
(vi) The Act for the first time lays down the duties and obligations of the landlord and the tenant as stated in Section 17 and 18.
(vii) The scope of ejectment of the tenant has been widened with the introduction of new grounds of eviction under sections 20 and 26 which provide for the grounds of ejectment as follows :
(a) Arrears of rent
(b) Change of user
(c) Cease to occupy the premises
(d) Premises having become unfit and unsafe (with a right of election to re-enter on reconstruction)
(e to h) Premises required by landlord for immediate demolition or for development works or repairs or additions with a right to re-entry by tenant.
(i) Availability of alternate accommodation with tenant or family member
(j) The tenant has ceased to be an employee of the landlord
(k) Substantial damage or alteration by the tenant
(l) Conviction of tenant for nuisance or annoyance or immoral or illegal activity
(m) Breach of the condition by the tenant imposed on the landlord by the Government
(n) Denial of the ownership of landlord, when such denial is not bona fide
(o) person in occupation of premises failed to prove he is bonafide tenant.
(p) Failing to vacate on the agreed date under an agreement
(q) Personal necessity of the landlord or any member of his family if the landlord or such person has no other reasonable suitable accommodation, after 3 years of purchase or transfer.
(viii) Section 21 to section 24 enumerates the special category of landlords entitled to immediate ejectment of premises let out by landlord, spouse or dependent son or daughter as under-
(a) Landlord whose allotment has been cancelled by Government agencies in case of residential premises
(b) A retiring member of armed forces or dependent of a martyr
(c) Central and State Government employees
(e) handicapped persons,
(f) old persons,
(g) freedom fighters, his widow or dependent son or daughter
(h) non-resident Indians
(ix) Section 24(3) dealing with NRI landlords the term used is "returns to India for permanent residence". The mandatory ownership condition of 5 years before filling of Eviction Petition by NRI as well as bar of getting only one building vacated is also not there as it was mandated earlier under Rent Act of 1949.
(x) Under Punjab Rent Act, 1995, the tenant has been provided multiple remedies which will delay the eviction process. E.g. Section 38(7)(e) provide that tenant will be entitled to file a review petition within ten days of the rejection of the application for leave to defend. Then after the dismissal of the review, tenant can file the appeal under Section 50 of the Punjab Rent Act, 1995 even in cases of summary nature.
(xi) Partial ejectment has been permitted pursuant to the consent of the landlord under section 20(3)
(xii) Under section 32 special provisions have been incorporated for recovery of possession in respect of corporate bodies or a public institution as landlord.Tribunals Abolished by the Division Bench of our Hon'ble High Court which were created earlier: Initially, the Act provided that the Rent Authority/tribunal will have the power to determine the dispute under the new Act. However, after a PIL titled as Bar council of Punjab and Haryana v. State of Punjab bearing CWP No: 25507 of 2013 filed in the High Court, the said creation of Tribunals were washed off. Section 67 provides for penalties for contravention of provisions of the Act and for the first time the Act also provides penalty in form of fine and imprisonment for sub letting. Section 75 provides that all cases in respect of the premises, other than owned by a non-resident Indian, let out prior to the commencement of this Act shall be governed and disposed of in accordance with the provisions of the old Act so repealed. Important Judgment Interpreting provisions of East Punjab Urban Rent Restriction Act, 1949 and Punjab Rent Act, 1995 in cases of N.R.I's (Upheld by Hon'ble Apex Court), "Krishan Kumar v. Kamla Devi" 2016(1) R.C.R. (Rent) 525.
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