Overview and Introduction to Delhi Rent Control Act
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This Blog is written by Anvaya Singh from Amity Law School, Noida. Edited by Ravikiran Shukre.
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INTRODUCTION:
The Government of India enacted the Delhi Rent Control Act in 1958 with the intention to safeguard the migrants who are staying on rent in Delhi in particular. Also, each state has its own rent control act as just one that governed the whole country during those times would have proved to be unsuitable in many regions and areas because every state has its own customs, understanding, etc. The Government wanted to help the population in resettling after the partition and also, facilitate them with social acceptance of the families in the Indian society.
Under the said act (Delhi Rent Control Act), the tenants were provided with rights that protected them from things like untimely eviction, also, it protects the economically weaker sections of the society who can’t afford a proper home or even apply for loans for homelessness. These were the very first reasons why this act was enacted and more aligned towards tenants.
The Delhi Rent Control bill was passed by both of the houses of Parliament and received the agreement by the President on the 31st of December, 1958 and it came into force on the 9th of February, 1959. The courts are under the legal obligation to read the provisions of the said Act so that they can balance the rights of the tenants to that of the landlords.
The Rent Control Acts all around India have two main purposes to fulfil and they are –
1. Protect the tenant from arbitrary eviction.
2. Protect the tenant from overpaying the rent.
Some important terms in the Act are as follows –
A. Landlord
According to section 2(e) of the Delhi Rent Control Act, 1958, a person who is entitled to receive the rent or receiving the rent on account of promises that has been lent to the tenant is a landlord.
The term Landlord doesn’t only include the owner but also the people who collect the rent on the behalf of the owner. It also includes the legal representatives of the owner as a landlord in certain circumstances. This has been held in the case of Pukhraj Jain v. Padma Kashyap.
B. Standard Rent
Standard Rent is defined under Section 6 of the Delhi Rent Control Act, 1958. Section 6(1) (A) (1) clearly states that in cases of residential premises let out before the 2nd of June, 1944, then the standard rent means the following –
• The basic rent to the premises in case it doesn’t exceed Rs. Six hundred per year.
• In certain cases, where the basic rent of the premises exceeds Rs. Six hundred per year, then, the basic rent plus ten percent of such rent.
Section 6(1) (A) (2) states that –
In certain cases where, the premises have been let out on or after the 2nd day of June, 1944, the standard rent means:
• If the rent of such premises has been fixed under the Delhi and Ajmer-Merwara Rent Control Act, 1947, or the Delhi and Ajmer Rent Control Act,1952.
• The rent should be fixed in the case so that it doesn’t exceeds Rs. Twelve hundred per year.
In case the rent so fixed exceeds Rs. 12,000/-, then, the rent together with ten percent of such rent.
SIGNIFICANCE OF THIS DEVELOPMENT:
As stated above, the Rent Control Acts were amended to protect the tenants against the malpractices of the landlords like untimely eviction and overpayment of the rent. The Rent Control Acts were a much-needed step for the said time period of this country. As the Rent Control Acts were being passed and amended all around India, many people started to file petitions against them as they felt that the acts were lacking in an area or two or violated their rights. So, as a result, the courts had to interfere and some changes were made accordingly to best suit the interests of both the law and those on whom this act had an effect.
The same happened with the Delhi Rent Control Act and numerous property lawyers and landlords had filed petitions in the court for the amendment of the Act. The petitions were filed in the district courts as well as in the Delhi High Court. These petitions challenged the constitutional validity of the said Act. One such appeal was made in January, 2019 by a group of landlords in the Delhi High Court but the plea was rejected and now, they are planning to approach the Supreme Court for the same.
In July 2019, the housing ministry introduced a draft model Tenancy Act, 2019 that will act as a single act that will be enacted on all the States and Union Territories. It will regulate the rental house segment and there is a chance that it will replace the other Rent Control Acts all around India. Along with that, it might also remove the bias of the law towards the tenant more than the landlords and make it more neutral.
IMPACT:
The Delhi Rent Control Act reduced the quality of housing because the landlords were not interested in maintaining their properties or even the quality of their housing because ultimately it led to lower-income as the Act had limited the landlords up to a certain extent and it had an adverse effect on them.
Last year i.e., in 2020 the Delhi Government has allowed the legislation to allow an increment in the rent by twenty-five percent to fund the landlords. The rules governing the Delhi Rent Control Act are generally favourable to the tenant, but some acts take the control of the rent control authorities. The state increases the rental market to handle the matters related to eviction properly and with neutrality.
PROVISIONS IN THE LEGISLATURE:
In the year of 2013, the Urban Development Minister began the Delhi Fare Bill, 2013 instead of the Delhi Rent Bill, 1995.
Some of the key guidelines and provisions for tenants and landlords under the Delhi Rent Control Act, 1958 are stated below –
1) The said Act allows the tenant to pay the rent by the 15th of a month, in the lack of a written agreement and in return the tenant is also liable to demand a receipt.
2) Under the said Act, the landlord isn’t allowed to evict the tenant if the rent is paid on time.
3) In order to the value of money, the main focus of the said Act is on the term ‘standard’. But, on the other side, as an effect of this law, good rent wasn’t available in the commercial premises of Delhi.
The Act also mentions that a landlord can increase the ‘standard’ rent if the rented premises are renovated but it cannot exceed the limit of 7.5% of the total cost incurred as fixed by the act. This is just another reason why a large number of buildings in central Delhi are in really bad condition and that is because there is no purpose for landlords to renovate them.
CASE LAWS:
There are numerous milestone case laws under the Rent Control Acts as, when they were amended, many people filed pleas in the respective courts regarding their concerns and many changes were made in the acts keeping in mind the best interest of both the law and those on whom the law was enacted.
Some of the case laws whose judgement were passed on the topic of ‘Eviction of tenant’ as provided in section 14 of the Act –
Freddy Fernandes v. P. L. Mehra, 1973 R.C.R. 53(2)
This case law focuses on the meaning of the word and expression ‘bona fide’ used in clause ‘e’ of Section 14 of the Delhi Control Act. It was held that the bonafide of the claim could be subjective but up to a certain extent. The landlord has the right to choose between the alternative accommodations according to his convenience and if he finds that one is more convenient than the other then, he is fully entitled to choose the more convenient accommodation. But the extent of his needs has to be reasonable according to the circumstances of the case.
Ram Narain v. Lakshmi Dass Kundra, Air 1971 Delhi 268
In this case, the landlord used to live on the 1st floor but he wanted additional accommodation from the tenant for himself on the first floor. The ground floor was used for commercial purposes only and the landlord wasn’t bound to convert that floor into a residential floor but he wanted the residential accommodations on the first floor i.e., where he used to live, adjoining his own accommodations in order to make it a ‘residential purpose’ floor. It was held that a landlord can’t be forbidden from claiming back a portion of his own property if he feels that he had lived uncomfortably in the past and now, wants to live a more comfortable life filled with amenities. It led to a petition for eviction by him on the ground of personal requirement.
Priya Bala Ghosh v. B.L. Singhania, [AIR (1992) SC 639]
In this case, it was held that rent can be given by money order and in those cases where the money was sent on time but somehow, it reached late to the landlord, it was still being considered as a valid tender.
Now, some cases regarding the topic ‘sub-tenancy’ which is mentioned in Section 17 of the Delhi Rent Control Act are as follows –
Raghubir Singh v. Savitri Devi and Ors., [AIR (1974) Delhi 108; 9 (1973) DLT 352; 1973 RLR 331]
In this case, the court stated that “as a matter of construction of the relevant provisions of the 1958 Act, there is abundant authority for the proposition that even a deemed lawful sub-tenant has to serve the requisite notice in order to acquire the status of a tenant and to claim protection from eviction in the execution of a decree for eviction passed against the tenant on any of the grounds mentioned in Section 14 of the Act.”
Shri Roshan Lal v. Bhagati Devi and Ors., (1969)
In this case, the Delhi High Court held that upon the eviction of a tenant, a sub-tenant who is in lawful occupation of the premises, can’t become a tenant automatically as stated under Section 18 of the Act. Further, it was held that notice under Section 17 of the Act is necessary as a condition precedent for claiming the status of a tenant.
Hiralal Kapur v. Prabhu Choudhary, [AIR (1988) SC 852]
It was held that if the landlord accepts rent from the sub-tenant, then, it doesn’t create a sub-tenancy.
ANALYSIS:
Even though the Rent Control Acts were passed and amended to support the migrants who used to live as tenants and those who belonged to a weaker economical sections of the society, but it ended up being more biased towards the tenants in most of the states and the landlord’s rights and powers were restricted. It also restricted the income from renting one’s property to tenants as, the increment per year was set to be very low and as a result, the landlords refused to maintain their property which they used to give for rent and provided with just the basic accommodations and amenities for the tenants. The act started discouraging the landlords and as a result, numerous ways which were not very ethical or on the borderline of becoming illegal were invented and people started using it as it benefitted them more.
The act is strict in nature and without any amendments, the act up to this date is biased towards the tenants and as a result, there are numerous cases of misconduct and violence pending in the court. When the bill of this act was passed, the landlords were wealthy and there was the suppression of the tenants by them. The tenants were evicted arbitrarily and the rent was increased many times which, sometimes, the tenants were unable to pay. So, during those times, the act’s biased nature towards the tenants was justified in order to restrict the misconduct done by the landlords. But today, as the value of land has increased, the laws regarding rent still remains the same and as a result, the landlords are at a loss as their oncome has become stagnant and will continue to be so if no amendments are made soon.
The act is discouraging people to rent their property and as a result, many people are having trouble finding a decent place to rent. So, solely because of this act, both the parties i.e., the landlords and the tenants are at loss.
CONCLUSION:
The Delhi Rent Control Act’s biggest downfall is that it has made the income from the property stagnant and as a result, the overall income has become stagnant which isn’t beneficial for the landlords and also the economy in a long run. This problem has led to the emergence of certain somewhat unethical methods such as key money. As a result, the law has reduced access to low-income communities for renters, not because of the black market in a rented house but because they can’t pay large deposits for rented premises.
The widespread disagreement between the interests of both the landlords and the tenants has led to an increase in litigation under the Act. Also, these conflicts have resulted in numerous disputes which include even a large number of criminal cases over rental properties.
The Act of 1995 replaced the old law of 1958, which used to protect the immigrants from the arbitrary rent increase by landlords. Now, the value of properties has increased many folds, many landlords who adhered to rent control regulations continue to receive lower rents. So, there is the requirement of a new Act which poses to be as neutral as possible and not biased towards one side as there are many people who are getting affected in a bad manner.
REFERENCES:
1. https://www.99acres.com/articles/the-delhi-rent-control-act.html
2. https://papers.ssrn.com/sol3/papers.abstract_id=758327
3. https://indiankanoon.org/doc/98362/
4. https://www.latestlaws.com/articles/analysis-of-delhi-rent-control-act-by-harleen-kaur/