Tilak Raj Narula vs M.L. Sethi
2009 Latest Caselaw 4194 Del

*            HIGH COURT OF DELHI : NEW DELHI

+                     CS(OS) No.838/2006

%                      Judgment reserved on : 24th April, 2009

                       Judgment pronounced on :     20th October, 2009

Tilak Raj Narula                                     ...Plaintiff
                       Through : Mr.D.S. Chauhan, Adv. with Ms.Ruchi
                                 Singh and Mr.Rajinder Juneja, Advs.

                       Versus

M.L. Sethi                                         ....Defendant
                       Through : Mr.Madhur Sapra, Adv.

Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                 Yes

2. To be referred to Reporter or not?                              Yes

3. Whether the judgment should be reported                         Yes
   in the Digest?

MANMOHAN SINGH, J.

1. The present suit has been filed by the plaintiff, inter alia,

praying for declaration, recovery of money and mandatory injunction

against the defendant in respect of the suit premises bearing Hall No.2,

Ground Floor, I-41, Lajpat Nagar-II, New Delhi-110024 to increase the

monthly rent to Rs.25,000/- p.m. w.e.f. 1st January 2006 or in the

alternative directing recovery of possession of the suit premises in the

event of default by the defendant to pay the monthly rent at the

enhanced market value.

2. The plaintiff is the owner and landlord of Property/premises

No. I-141, Lajpat Nagar - II, New Delhi - 110024. The defendant is

tenant of the plaintiff in respect of Hall No. 2 on the ground floor

measuring approx. 18'x10' ft. of the above mentioned premises/property

of the plaintiff (hereafter called the 'suit premises'). The suit premises

was let out by the plaintiff to Sh. Achraj Ram, since deceased, the father

of the defendant by an agreement in April, 1962 at a monthly rent of Rs.

141.75, excluding electricity and other charges. Upon the demise of his

father in the year 1986, the defendant inherited the tenancy and became

tenant under the plaintiff on the same terms and conditions. The

defendant is using the suit premises for commercial activity and

running a chemist shop by name M/s Sethi Sons Chemist.

3. It is alleged by the Plaintiff that the suit premises is situated

in the middle of famous Central Market, Lajpat Nagar, New Delhi. The

defendant is however, paying the rent @Rs.141.75 p.m. which is highly

inadequate keeping in view the large scale increase in the cost of every

item and rising inflation since the year 1962. The rent being paid by the

defendant thus does not even meet a fraction of the cost of maintenance

or even the liability of property tax and other dues paid by the plaintiff.

The plaintiff submits that the suit premises can fetch a minimum

monthly rent of Rs. 40,000/- (Rupees Forty Thousand) in the market,

whereas the defendant is paying a meager monthly rent of Rs. 141.75

which is not in any manner commensurate with the present market rate

of rent and is unjust, unfair and irrational.

4. In view of above, the plaintiff prayed for enhancement of

rent according to the prevailing market rates of rent in the

locality/market.

5. It is submitted that vide legal notice dated 22.12.2005, the

plaintiff called upon the defendant to enhance the monthly rent of the

suit premises to Rs. 25,000/- with effect from 1st January, 2006 and in

the case of his inability to do so, called upon him to vacate the suit

premises. The said notice was duly served upon the defendant but they

declined to enhance the rent or even to vacate the demised premises.

Defendant sent reply on 27th January, 2006 to the abovesaid notice

through his advocate stating that since the suit premises is covered

under the provisions of Delhi Rent Control Act, 1958 (for short the

'Act), the plaintiff cannot demand enhancement of the rent beyond the

limit of 10% every three years as prescribed under the provisions of the

said Act and the defendant only offered to increase the rent by 10% and

purported to tender rent of Rs. 156/- for the month of January, 2006.

Thus, the present suit has been filed by the Plaintiff against defendant.

6. The plaintiff submits that Section 4,6 and 9 of the Act, came

under challenge in Civil Writ Petition No. 2783 of 1997 titled as

"Raghunandan Saran Ashok Saran (HUF) Vs. Union of India &

Ors. before this Court. A Division Bench of this Court in the

abovesaid case vide judgment dated 18.02.2002 (95 (2002) DLT 508)

struck down the aforesaid provisions of the Act, holding the same to be

ultra vires the Constitution of India on the reasoning given therein.

7. By virtue of the observations made in Raghunandan Saran

(supra), the statutory prohibition on the landlord not to charge any

amount in excess of the standard rent stands removed. The landlord is

therefore entitled to enhance and revise the rent of the premises to

commensurate with the rising cost, inflation, price index and such other

factors in view of the fast changing structure and norms of the society,

as well as many fold increase in the value of the properties.

8. It is argued by the learned counsel for the Plaintiff that in the

said ruling, the Court has held that the said provisions of the Act have

become unreasonable and unconstitutional with the passage of time

where there is no adequate provision for enhancement of rent to

commensurate with rising cost, inflation, whole sale price index and

which therefore have a shackling effect on the rights of landlords, and

from a rational and humane angle, a change was required with the

passage of time.

9. The Division Bench of this Court while holding the aforesaid

provisions of the Act as ultra-vires removed the statutory prohibition

upon the landlord not to charge more than the standard rent and enabled

him to revise rent of the premises to commensurate with the rising cost.

10. It is further argued by the plaintiff that the existing rent of the

premises at Rs. 141.75 per month has been unjust and unfair keeping in

view the municipal taxes in respect of the properties in Delhi. The

plaintiff urged that the defendant is deriving double benefit in doing

business from the suit premises. In fact the plaintiff/landlord is not

getting any amount to maintain himself and his family. The plaintiff

therefore, claims a monthly rent to the tune of Rs. 25,000/- per month

with effect from 1st January, 2006 and continuance of payment of the

same month by month till its further revision in accordance with law.

11. In the written statement, the defendant submitted that after

passing of the judgment in the case of Raghunandan Saran (supra), one

Shri Vishwant Kumar, who was a tenant in respect of some other

premises (which was not the subject matter of the said Writ Petition)

was allowed to challenge the said judgment, by filing appeal before the

Supreme Court, being Civil Appeal No. 6183 of 2002.

12. However, during the pendency of the said appeal, the said

Shri Vishwant Kumar vacated the tenanted premises under his tenancy,

and therefore, his appeal became infructuous and, as a result thereof,

the same was disposed of by the Supreme court, while leaving open the

question of law to be decided in appropriate case, i.e. the question as to

whether the Sections 4,6 and 9 of the Act as amended up to date, are

ultra virus or not. Thus, it is contended that the judgment in

Raghunandan Saran (supra) did not attain finality in the Apex Court and

is not applicable in the facts of the present matter and the plaintiff is not

entitled to any relief against the defendant on the basis of the said

judgment.

13. It is further submitted that this judgment does not render

Section 6A of the Act as ultra vires as observed in Kamlesh Bagga &

another Vs. Mahender Kaur CM (M) 948/2004 decided on 5th

December, 2008 which was also upheld by the Supreme Court. Thus,

in this view of the matter and settled proposition of law, no landlord is

entitled to claim/demand/ask for increase in the amount of rent by more

than 10%, as provided under Section 6A of the said Act, and that too

only in the manner provided under Section 8 of the said Act. The

abovesaid provisions of law have not been held to be ultra vires and

they continue to exist/operate as lawful provisions of law.

14. The defendant urged that he is the tenant under the plaintiff

in respect of the tenanted premises on monthly rental of Rs. 141.75/-

beside electricity charges. The present suit is barred under Section 50 of

the Act. It is submitted that the contractual tenancy of the defendant is

governed by the provisions of the Act as amended upto date,

whereunder the plaintiff is liable to effect increase in the amount of rent

only at the rate of 10% after every three years, and accordingly, the

plaintiff was entitled to seek increase in the amount of rent only to the

said extent and to that, the defendant had no objection.

15. In the case of Kamlesh Bagga (supra), this court clearly held

that contractual rent below Rs. 3,500/- attracts the provisions of the Act.

Increase of rent in the present case from the contractual rent under the

Delhi Rent control Act can only be done by recourse to Section 6A

thereof. A unilateral notice increasing rent beyond ten per cent is not

permissible under Section 6-A of the Delhi Rent Control Act and cannot

be acted upon to take the case out of the purview of the Delhi Rent

Control Act.

16. Where the rent is agreed between the parties by agreement, it

is agreed rent. If the tenant is not willing and agreeable to an increase in

rent in accordance with the provisions of the Act, the landlord can have

the rent revised under the provisions of the Act.

17. A Division Bench of the Delhi High Court in the case of

Raghunandan Saran (supra) held that Sections 4, 6 and 9 of the Act deal

with the determination and fixation of standard rent which have become

archaic and violative of Articles 14, 19(1)(g) and 21 of the Constitution

of India with the passage of time. The pegging of rent at such low level

causes undue hardship to the landlord and does not take into account the

fast increasing value of the property. However, insertion of section 6A

in 1988 did not make any advance because it did not give any real

succor to the landlord getting standard rent.

18. Section 6 of the Act defines the 'standard rent' except for

cases provided in sub section (2) of Section 6. Contractual rent has no

reference for determination of the standard rent. Section 2(k) defines

the standard rent as rent defined in Section 6.

19. Section 9(2) empowers the Controller to fix standard rent and

he may fix it at the amount which appears to be reasonable having

regard to the provisions of Sections 6 and 7 and under the circumstances

of the case. Section 9(1) of the Act provides that on an application

made to the Controller in this behalf either by the landlord or by a tenant

as the case may be, he may fix the standard rent.

20. The object of Section 4 is to save the tenant from entering

into unconscionable bargain with the landlord on account of housing

shortage. On application of increase of standard rent and not of rent,

such increases are not increases of rent but are only allowable increases

of fixing the standard rent.

21. Section 6A which overrules all other provisions of the Act

provides for revision of rent every three years. Under Section 6A, the

increase of 10% is permissible in standard rent after fixing of the agreed

rent as the case may be but Section 7 provides for lawful increase of

standard rent in certain cases. Only such increase is made payable. For

this reason, it has been held that an agreement to pay increased rent does

not bind the tenant. Section 6A contains a non obstante clause and

overrides the other provisions of the Act. It lays down that standard rent

fixed under the Act is agreed rent and where no standard rent has been

fixed, it may be increased by 10% every three years. It does not say as

to how or by whom the rent may be increased. It does not make the

increase automatic. It also does not lay down any other condition for

making the increase except that the three years must lapse between the

two successive increases in rent.

22. Let me now give some relevant facts of the present case. The

plaintiff in the present case has not denied the fact that the suit premises

were let out by the plaintiff's father to the defendant by an agreement in

April 1962 at a monthly rent of Rs. 141.75/- excluding electricity and

other charges. After the demise of his father in the year 1986,the

defendant inherited the tenancy and became the tenant of the plaintiff on

the same terms and conditions and started using the suit premises for

commercial activities i.e. as a Chemist shop by the name of M/s.Sethi

Sons, Chemists.

23. There is no dispute between the parties that the defendant has

offered to increase the rent at 10% under Section 6A of the Act. The

court can fix the standard rent on the basis of the cost of construction

under the provisions of Section 9 of the Act on an application made in

the prescribed manner. There is no provision for increase of contractual

rent in the Act except under the provisions of Section 6A of the Act. In

the present case, it is the admitted position that the rent is less than

Rs.3,500/-. The plaintiff has not applied for fixation of standard rent as

per the provisions of the Act.

24. Section 50 of the Act clearly bars the present suit in relation

to fixation of standard rent as no civil court can entertain any suit or

proceedings in relation thereto. In the present case, it is agreed rent

between the parties by virtue of agreement and the defendant who is

tenant is not agreeable to increase in the rent as suggested by the

plaintiff except under the provisions of Section 6A of the Act.

25. In accordance with the provisions of the Act, the landlord

i.e. the plaintiff is not entitled to file a suit for declaration for recovery

of rent/increased rent and/or in the alternative recovery of possession of

the suit premises. The suit is barred under Section 50 of the Act and the

same is hereby dismissed with costs.

MANMOHAN SINGH, J OCTOBER 20, 2009 nn