Delhi High Court
Shobha Aggarwal And Ors. vs Uoi And Anr. on 7 January, 2019
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 04.10.2018
Pronounced on: 07.01.2019
+ W.P.(C) 516/2010 & CM APPL. 26668/2018
SHOBHA AGGARWAL & ORS. ..... Petitioner
versus
UOI & ANR. ..... Respondents
+ W.P.(C) 7489/2012
MAHENDER YADAV ..... Petitioner
versus
UOI & ANR ..... Respondents
+ W.P.(C) 4951/2014
HARSH KUMAR AGARWAL ..... Petitioner
versus
UNION OF INDIA AND ORS ..... Respondents
+ W.P.(C) 917/2018
CHAUDHARY KISHAN CHAND & SONS (HUF)..... Petitioner
versus
UNION OF INDIA & ORS ..... Respondents
+ CS(OS) 3518/2012, I.A. 3927/2013 & 15957/2013
RAGHUBIR SARAN CHARITABLE TRUST ..... Plaintiff
versus
RAYMOND LTD & ANR ..... Defendants
Through: Petitioner No.1 in person in W.P.(C)
516/2010 with Sh. Pranav Jain, Advocate, for
Petitioner Nos. 2 and 3 in W.P.(C) 516/2010.
Ms. Shalini Kapoor, Ms. Rhea. G. Munjal, Ms.
Bindita Chaturvedi and Sh. Dikshant Khanna,
Advocates, for petitioner in W.P.(C) 4951/2014.
Dr. Ashwani Bhardwaj with Ms. Ananya
Mukherjee, Advocates, for Respondent No.3, in
W.P.(C) 516/2010..
Sh. Ankit Jain and Sh. Siddhnat Nath, Advocates,
for New Delhi Traders Association, in W.P.(C)
516/2010.
W.P.(C) 516/2010 & connected matters Page 1 of 66
Sh. Anuj Aggarwal, Advocate, for UOI, in W.P.(C)
516/2010.
Sh. Vivek Goyal, Advocate, for UOI, in W.P.(C)
7489/2012.
Sh. Akshay Makhija, CGSC with Sh. Aditya Goyal
and Ms. Kriti Awasthi, Advocate, for UOI, in
W.P.(C) 516/2010 and W.P.(C) 4951/2014.
Sh. Simran Mehta and Sh. Surhid Bhandari,
Advocates for plaintiffs in CS(OS) 3518/2012.
Sh. Anuj Sarma, Advocate, for defendant, in
CS(OS) 3518/2012.
Sh. Jaswinder Singh, Advocate, for Defendant Nos.
2 and 3, in CS(OS) 3518/2012.
Sh. Pradeep K.B., Advocate, for petitioner, in
W.P.(C) 917/2018.
Sh. S.D. Windlesh, Advocate, for UOI, in W.P.(C)
917/2018.
Sh. Abhineet Gulati and Ms. Anjana Thukral,
Advocates, for Respondent No.2.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A.K. CHAWLA
MR. JUSTICE S. RAVINDRA BHAT
%
1. The petitioners [in W.P.(C) 516/2010] are co-owners along with other
heirs, of late Sharbati Devi, of property, being No. 4/14A, Asaf Ali Road;
they mount a wholesale challenge to the provisions of the Delhi Rent
Control Act, 1958 (hereafter "DRC Act" or "the Act" for short) as violative
of Articles 14, 19(1) (g) and 21 of the Constitution. The Shri Raghubir Saran
Charitable Trust (hereafter "the trust") filed a suit [CS (OS) No. 3518/2012],
seeking declaration that Section 6A of the DRC Act is void and
unconstitutional, as violative of the said articles of the Constitution of India.
This suit was referred to the Division Bench on the question of validity of a
law by order dated 12-12-2013. In W.P.(C) 7489/2012, Shri Mahinder
W.P.(C) 516/2010 & connected matters Page 2 of 66
Yadav, the petitioner, seeks reliefs identical to what is sought by Ms. Shobha
Agarwal and her co-owners in W.P.(C) 516/2010. In all the other
proceedings too, provisions of the DRC Act are impugned. Section 14(1)(d)
of the DRC Act has been challenged in two writ petitions, i.e. Raj Rani Vs.
Union of India - W.P.(C) 7726/14 and Harsh Kumar Aggarwal v Union of
India - W.P.(C) No. 4951/14. In Amrit Lal Ghai v Union of India - (W.P.
(C) 1622/2012), the petitioner challenges the vires of Section 50(1) of the
Act. The validity of Section 1 (2) of the Act so far as the said Section
provides for extension of provisions of the said Act to select urban areas
within Municipal Corporation of Delhi is impugned in Jagdish Kumar v
Union of India - W.P.(C) 5542/14 and in Raj Narain v Union of India -
W.P.(C) 3189/14. In Kusum Ansal v Union of India (W.P.(C) 733/2013)
provisions of Sections 2(1) and 3 of the Act so far as they confer protection
of statutory tenant upon the Government, are impugned.
2. It is argued that the Act, once thought to be a socially beneficial
legislation, is one of the most draconian laws on the statute books today.
DRC Act came into existence as a special and temporary legislation
curtailing the rights of landlords under the general law on transfer of
property to meet the specific needs of the time viz "emergency" conditions
created first by World War II and later by the partition of India - the
conditions which have long ceased to exist. The long passage of time in
which the ground realities completely changed made this temporary law -
which has assumed permanence because of executive inaction
unconstitutional. It is argued that this so called temporary law has resulted in
artificially low rents, lifetime tenancy along with succession rights conferred
upon an arbitrary population denying landlords any substantive rights in
W.P.(C) 516/2010 & connected matters Page 3 of 66
their own property. It has also resulted in reduced taxes and destruction of
the city of Delhi. DRC Act is a discriminatory legislation which serves no
legitimate state interest and is in-fact against the interest of the general
public.
3. It is argued by the petitioner that the DRC Act has become socially
and economically destructive as is evident from the various Government
committee reports on the subject over the last thirty years. Ms. Shobha
Agarwal, the petitioner who argued one of the writ petitions contended that
the Economic Administration Reforms Commission set up under the
chairmanship of Shri L.K. Jha in its Report No. 11 presented to the
Government in September, 1982 pointed out the negative effects of rent
control law. The Jain Commission, 1998, reiterated that Rent Control Act
negatively impacts housing supply, investment flow in the housing and
increases the housing price. The Planning Commission in its 10th Five Year
Plan 2002-07 stated that rent control and tenancy laws prevent the
development of rental housing, thus contracting housing stock and also act
as barriers of growth of cities and that they are also the single most
important reason for proliferation of slums in India. Likewise, The Report on
Real Estate Sector, Committee on National Competition Policy, Ministry of
Corporate Affairs, January 2012- which concluded that the existing Rent
control legislations are restrictive in the sense that it precludes probable
home owners from renting out their properties due to control in rent,
impedes large scale investment in developing rental properties and renting
premises as a business model. It stated that determination of rent should be
left to market forces and not be controlled through Government regulations
or legislations. The Mckinsey Report on the Economic Performance of India
W.P.(C) 516/2010 & connected matters Page 4 of 66
published in 2001 opined that removing land market barriers and eliminating
Government ownership will increase growth by 1.3 per cent and 0.7 per cent
respectively, was also cited.
4. It was urged that the land market barriers according to McKinsey
Report are unclear titles, low property taxes, subsidized user charges, rent
control and stringent tenancy laws and zoning laws. It is evident from these
and many other such reports that DRC Act apart from being socially
destructive is not contributing to India‟s growth story either. It is argued that
the DRC Act is against Government Policy. The reports referred to and other
expert reports resulted in policy changes over the last twenty-two years or
so, starting from gradual decontrol as envisaged in Model Rent Act, 1992
based on National Housing Policy, 1992 to total decontrol in National Urban
Housing and Habitat Policy, 2007. The policy changes resulted in several
reform oriented programs like Jawaharlal Nehru National Urban Renewal
Mission and Rajiv Awas Yojana which stipulated mandatory reform of rent
control laws with incentives to State Governments. However, the
exchequer‟s money was wasted in these schemes as they have not resulted in
the reform of rent control laws. Within the city of Delhi the influential
tenant-trader has effectively stalled implementation of the policies and
programs to reform DRC Act by not allowing enforcement of the Delhi Rent
Act, 1995.
5. It is argued that the DRC Act violates Fundamental Rights and
Human Rights of the landlords such as the right to equality. In this context,
it is urged that this court had struck down Sections 4, 6, and 9 of the DRC
Act as violative of Articles 14, 19(l)(g) and 21 of the Constitution in
Raghunandan Saran Ashok Saran (HUF) v. UOI and Ors. [2002 (II) AD Del
W.P.(C) 516/2010 & connected matters Page 5 of 66
261]. It was argued that there was a presumption that the striking down these
provisions would result in payment of market rent to the owners but the
presumption stands rebutted by the later Division Bench judgement of this
Court in Model Press Pvt. Ltd. v. Mohd. Saied & Anr 155 (2008) DLT 403
and other similar decisions. It is submitted that when part of an Act is held
unconstitutional, it is not for an academic exercise and if does not result in
removing the injustice, then the only logical solution would be to strike
down the entire legislation.
6. It is submitted that the DRC Act no longer has any rational nexus with
its objects and reasons. The adjudication under rent control spans decades
and generations as it is in the tenant's interest to prolong the life of the
litigation. Approximately 10.15% of all civil litigation at the District Courts
in Delhi is under DRC Act. In the Central District which comprises of many
old markets, 27.9% of all civil cases at the level of the Civil Judge/ Rent
Controllers/Additional Rent Controllers are under the DRC Act. The
provisions relating to standard rent - section 4, 6 and 9 of the Act - were
struck down by this court in 2002 in Raghunandan Saran (supra). The
court was of the view that the provisions are archaic and contain no
mechanism to compensate the landlords to offset inflation. The third object
and reason of the Act is also redundant as after the 1988 Amendment, the
Act protects only one class of tenants who are paying less than `3,500/- as
rent. This protection is given regardless of the financial status of the tenants/
landlords or the market rent of the property and has no reasonable nexus
with the object sought to be achieved by the Act. Various expert committee
reports show how the Act is adversely affecting the poor and needy, and is
contrary to its object.
W.P.(C) 516/2010 & connected matters Page 6 of 66
7. It is submitted that the preamble of the DRC is that it is to provide
"for the control of rents and evictions and of the rates of hotels and lodging
houses and for the lease of vacant premises to Government, in certain areas
in the Union Territory of Delhi." The petitioners argue that the Act has
hardly ever been used for fixing the rates of hotels and lodging houses (there
are almost no reported cases) or for that matter for the lease of vacant
premises to the Government. These provisions have thus fallen into
desuetude. The Act was amended five times. The object of the 1975
Amendment Act was to introduce limited succession rights for the tenants.
This is evident from the parliamentary debates on the issue. However, the
Supreme Court's judgement in Gian Devi Anand vs. Jeevan Kumar & Ors
[1985 (2) SCC 683] has ensured unlimited succession rights to tenants of
commercial premises. The seven judge bench judgement of the Supreme
Court in V. Dhanapal Chettiar vs. Yesodai Ammal [(1979) 4 SCC 214]
which held that there is no requirement to give notice to a tenant before
filing an eviction suit, has been wrongly interpreted and implemented by the
courts below, leading to unlimited succession rights for the tenants in
residential properties too for all practical purpose. This is in spite of the
Supreme Court judgement in Gauri Shanker and others v Union of India
[AIR 1995 SC 55] which upheld the vires of Section 2(l)(iii) of the Act and
held that limitations placed on the inheritance of tenancy rights of the heirs
of statutory tenants in residential premises are reasonable and just. This
leaves no scope of getting the property back even for the future generations
of the landlords for all times to come. The unfortunate fall out has been that
a law which was to apply equally to all communities is governed by the
personal laws of succession of the tenant and not the landlord. This is
W.P.(C) 516/2010 & connected matters Page 7 of 66
against the object of the 1976 Amendment Act which introduced uniform
criteria for succession for all tenants by virtue of Section 2(l)(iii). This is
further substantiated by the fact that the Delhi Rent Act, 1995 by virtue of
Section 5 has provided for limited succession of one year only for
nonresidential tenancies and has done away with the confusing words
"termination of tenancy" which in 1958 Act led to conflicting and wrong
judgements. The DRC Act is liable to be struck down on this ground only.
8. Dealing with the allegation of the discrimination, it is urged that
landlords whose properties are under rent control face discrimination vis-a
vis landlords whose properties fall outside the rent control. There are several
unreasonable and arbitrary classifications under Sections 2, 3 and 14 of the
Act and all of these classifications have no rational nexus with the object
sought to be achieved by the Act. The classifications under the DRC Act are
not saved by the reasonable restrictions under Article 19(6). The right to
business of letting out properties on market rent for livelihood is violated;
and this leads to the right to life itself being in jeopardy. Ms. Agarwal
elaborated the argument, through various classifications under the DRC Act
stating, firstly, that by virtue of Section 3(a) and (b), Government properties
are exempted from the purview of the DRC Act; secondly, the classification
of residential and commercial properties under Section 14(l)(d) and 14(l)(e)
has lost meaning. It is submitted thirdly that the Public Premises (Eviction of
Unauthorized Occupants) Act, 1971 overrides the provisions of State Rent
Acts where both are applicable. Further, by virtue of the 1976 Amendment
and its interpretation by the Supreme Court in Gian Devi Anand (supra);
different rules of succession apply to commercial and residential premises.
This was never the legislative intent, originally. It is submitted that fifthly by
W.P.(C) 516/2010 & connected matters Page 8 of 66
virtue of Section 3(c) & (d) inserted by 1988 Amendment, premises whose
rent exceeds `3500/- per month are taken out of the ambit of the Act, as also
new constructions for a period of ten years. Sixthly, it is stated the Supreme
Court‟s judgement in Satyawati Sharma (Dead) by LRs v. UOI and Ors. AIR
2008 SC 3148 struck down part of Section 14(l)(e) removing the
discrimination between residential and commercial properties. However, the
same discrimination persists in Section 14(l)(d).
9. The first classification between government properties and private
properties- it is stated, is absurd as it is the government's duty to provide
housing to the citizens. However, the government is protecting its properties
from rent control and instead transferring the burden on to private
individuals. The landlords who constructed these properties without any
subsidy from the government are made to suffer financial burden of the
tenants. The entire logic is inverted. Counsel submits that the classification
between residential and commercial tenancies in various sections is hit by
the ratio of the Supreme Court Judgement in Satyawati Sharma (supra)
striking down part of Section 14(l)(e) of DRC Act and placing tenants of
both commercial and residential properties on the same footing for eviction
on the ground of bona fide need of landlords. However, the Act itself is a
classification as it applies only to some properties in Delhi. At present there
are three Acts governing rent leases in Delhi viz. Transfer of Property Act,
1882; Public Premises (Eviction of Unauthorized Occupants) Act, 1971 and
the DRC Act. These create three distinct classes of landlords and tenants in
Delhi. The landlords and their tenants in the properties fetching more than
`3,500/- are governed by the Transfer of Property Act, 1882. In these cases,
the rent and the tenure of tenancy can be freely negotiated. Landlords of
W.P.(C) 516/2010 & connected matters Page 9 of 66
private property fetching less than `3500/- as rent are governed by the DRC
Act, 1958. These landlords can neither determine the rent nor evict the
tenant except under certain limited conditions/grounds. There is no freedom
of contract. Properties under the Public Premises (Eviction of Unauthorized
Occupants) Act, 1971 are governed by that Act and a separate simplified
procedure is followed for eviction of tenants/ unauthorized occupants of
such premises.
10. The classification created by Section 3(c) of the Act on the basis of
the monthly rent is totally arbitrary and irrational as it has no bearing with
the economic status of either the tenant or the landlord. In fact, it is obvious
that the landlords who are receiving paltry sum as monthly rent would have
their finances dwindled over the decades instead of increasing whereas the
finances of the tenants in their properties would have gone up.
11. This classification was questioned by the statutory tenants in D. C.
Bhatia v. Union of India 1995 (1) SCC 104 as arbitrary; however, the
Supreme Court held that the tenants paying more than `42,000/- per year as
annual rent are not in need of protection. The underlying presumption in this
reasoning is that a tenant should be from weaker section of the society to
avail the benefit of the Act. However, the question whether tenants paying
less than `3500/- per month as rent need protection/or not was not raised
before the Supreme Court. It was also observed by the Court that the
"legislature could have repealed the Rent Act altogether. It can also repeal
it step by step."
12. The scheme of the DRC Act rested on Section 4, 6 and 9 which
controlled rents and Section 14 which controls eviction. If the striking down
of these sections do not result in removing the control on rent then the
W.P.(C) 516/2010 & connected matters Page 10 of 66
kingpin Section 14 which controls eviction has to be struck down which
would in any case load to the entire Act getting nullified. The DRC Act fails
the test of reasonable classification based on intelligible differentia bearing a
rational nexus to a legitimate state interest, as well as the test of non-
arbitrariness. Firstly, there is no rationale behind three separate laws viz
Transfer of Property Act, Public Premises (Eviction of Unauthorized
Occupants) Act, 1971 and the DRC Act governing rent leases in Delhi. Any
historical justification for such discriminating laws has been eroded with the
passage of time. There is no reason why the profit-making desire of
corporations be put on a higher pedestal than an individual's right to make
financial gains out of his/her own property. The only beneficiaries of these
unequal laws are big corporations like the Life Insurance Corporation and
the rich tenant-trader lobby of Delhi. The landlords and the society as a
whole are the losers.
13. It is submitted that also, the classification of properties on the basis of
monthly rent paid too is absurd and illogical as it has no nexus with the
stated objects and reasons of the DRC Act and is not a discernible criterion
for judging the financial status either of the tenant or the landlord. If the
objective of the DRC Act is to provide premises to the poor at reasonable
rates it fails miserably in achieving the same. The actual poor in Delhi are
forced to live in slums because of the DRC Act and are outside the
protective reach of the same. There is no apparent rational reason for the
affluent tenant-trader community and rich corporations to pay absurdly
miniscule amount as rents when their earning is in lakhs and crores of rupees
per month. It is unjustifiable oppression of the landlords under the garb of a
"socially welfare legislation."Thirdly, the classification that the DRC Act
W.P.(C) 516/2010 & connected matters Page 11 of 66
creates between Government properties and private properties by restricting
the application of DRC Act only to private properties has now become
arbitrary and irrational. Exemption provided to Government properties while
permitting it to take advantage of the DRC Act is not justifiable any more as
Government has constructed massive properties of its own since
independence and cannot continue to make illegal gains out of private
property on the pretext of shortage of office space.
14. Counsel argues that the evolution of the right to equality in India
underwent a transformation in 1974 when the Supreme Court, in E.P.
Royappa v. State of Tamil Nadu AIR 1974 SC 555, decided to liberate
Article 14 from the limited "cribbed, cabined and confined" limits of
classification based equality. Counsel relied on the observations in H.H. Shri
Swamiji of Shri Admar Mutt v Commissioner of Hindu Religious and
Charitable Endowments AIR 1980 SC 1 that "An indefinite extension and
application of unequal laws for all time to come will militate against their
true character as temporary measures taken in order to serve a temporary
purpose. Thereby, the very foundation of their constitutionality shall have
been destroyed... "These observations were applied in Motor & General
Traders v State of Andhra Pradesh 1984 (3) SCC 222 that a law, which
earlier had "the garb of constitutionality" may "become worn out and its
unconstitutionality is now brought to a successful challenge." The same
view was followed in Malpe Vishwanath Acharya v. State of Maharashtra,
1998 (2) SCC 1.
15. The reasons for bringing the DRC Act have long ceased to exist. The
historical reasons of Second World War and Partition of India which
W.P.(C) 516/2010 & connected matters Page 12 of 66
justified the application of unequal laws have now worn out. They have no
relevance to the present day social and economic reality and the DRC Act
has become otiose with efflux of time. The application of three unequal laws
governing rent leases in Delhi cannot continue forever.
16. It is next urged that the right to Freedom to practice any profession, or
to carry on any occupation, trade or business is violated by the DRC Act and
is violative of Article 19(1)(g) and not saved by the reasonable restriction
under Article 19(6). The rent between landlords and rent-controlled tenants
are not negotiated (except at the time of first letting), and the transactions are
not, on the landlords' part, in any sense "voluntary." The provisions of the
DRC Act amount to unreasonable restriction on the property, owners right to
carry on the business of renting out buildings and they offend Article
19(l)(g) of the Constitution of India. The buildings constructed by landlords
were for the business activity of making profit through rental income and"
"not for a charitable purpose". It is submitted that in Raghunandan Saran
(supra) after considering a detailed chart of dwindling value of rupee and
increases under Section 6A, this court was constrained to observe that "the
so-called increase under Section 6A of the Act is an eye-wash." As the DRC
Act contains no mechanism to bring the historical rent to the present market
rent the tenant would forever pay less than `3500/- and continue to be
protected. With 10% increase in rent permissible every three years,
the time period required to reach the threshold limit of `3500/- for the
monthly rent ranging from `10/- to `1000/- would be 184.38 years to 39.42
years respectively. Most rent-controlled properties in Delhi fall in this
category. As the increases are not automatic from the date of 1988
W.P.(C) 516/2010 & connected matters Page 13 of 66
amendment and only prospective increases are allowed under section 6(A)
of the DRC Act, endless litigation is generated between landlords and
tenants which lasts for decades thus keeping the society under constant
litigation and creating social disharmony. The excessive protection provided
to the rich and influential tenants against rent increases in the DRC Act do
not give effect to any legitimate aim of the state.
17. Counsel argue that the DRC Act in effect compels a landlord, to
refrain in perpetuity from evicting a tenant unless one of the grounds in
Section 14(1) becomes available to him or the threshold of `3500/- is
reached both of which are illusory for most landlords. As a result of the
DRC Act the landlords have been deprived of possession of their property,
the right to derive profit from property has been destroyed and, at the same
time the right to dispose of one's property has been stripped of its substance.
18. Relying on Olga Tellis & Ors. v. Bombay Municipal Corporation &
Ors AIR 1986 SC 180, it is stated that a five-judge bench of the Supreme
Court observed that if the right to livelihood is not treated as a part of the
constitutional right to life, the easiest way of depriving a person his right to
life would be to deprive him of his means of livelihood to the point of
abrogation. Property rights provide a sphere of personal sovereignty, a zone
of privacy into which Government should be able to intrude only with
difficulty and only so far. Salmond is referred to say that possession of
material things is essential to life, it is the most basic relationship between
men and things. A property right in a physical thing is a right to possess, use
and dispose of this thing. The Government compelled rent control law has
ensured that the possession of the property of landlords stay with a third
party for generations at miniscule rent thereby nullifying their right to
W.P.(C) 516/2010 & connected matters Page 14 of 66
property and at the same time violating their right to life by not allowing
them to earn livelihood out of their property.
19. Next, it is urged that though removed from the list of fundamental
rights, right to property continues to be not only a constitutional or statutory
right but also a human right. The development of the right to property as a
human right can be ascertained from the Declaration of the Rights of Man
and Citizen, 1789; the Charter of Fundamental Rights of the European
Union, 2000; the Universal Declaration of Human Rights,1948 and the First
Protocol, European Convention on Human Rights, 1952. Even the European
Court of Human Rights has placed the right to property at the same pedestal
as a human right.
20. The petitioners‟ counsel submits that in many judgments the Courts
have issued directives to amend the DRC Act so that it is just both to
landlords and tenants. In Model Press (supra), a Division Bench observed:
"It is unfortunate that after the decision in Raghunandan Saran's case, the
legislature has not filled up the vacuum created in the law with Sections 4, 6
and 9 of the Delhi Rent Control Act 1958 being held ultra vires the
Constitution." It is highlighted that eleven years have elapsed since the
Government assured the Supreme Court in Common Cause that it is taking
proactive measures on the issue. Finally, in view of the apathy shown by the
Government the Supreme Court laid down guidelines in Mohammad Ahmad
& Anr. v. Atma Ram Chauhan & Ors. AIR 2011 SC 1940 to minimize
landlord-tenant litigation at all levels. These guidelines should have had the
same force- contend the petitioners, as guidelines in Vineet Narain & Others
v. Union of India & Anr. 1996 (2) SCC 199,Vishaka and others v. State of
W.P.(C) 516/2010 & connected matters Page 15 of 66
Rajasthan & Ors AIR 1997 SC 3911, Lakshmi Kant Pandey v. Union of
India, AIR 1984 SC 469 have all over the country.
21. The directions given by Committee on Petitions, Rajya Sabha in 2004;
Committee on Subordinate Legislation in 1999 to take very urgent steps to
notify the Delhi Rent Act, 1995; several reports of Parliamentary Committee
on Urban Development; and assurances given by successive Governments in
power are referred to. It is stated that legislative and policy apathy have
flagrantly violated these reports, resulting in deprivation of the petitioners‟
rights.
22. It is stated that the Act does not pass the test of principles of
constitutional validity as laid down by the Supreme Court in Shri Ram
Krishna Dalmia v. Shri Justice S. R. Tendolkar & Ors and Synthetics and
Chemicals Ltd &Ors v. State of UP AIR 1990 SC 1927 wherein the court
said "restrictions" valid under one circumstance may become invalid in
changed "circumstances." Reliance in support of this view was not only
placed on some American decisions but also on the decision of the Supreme
Court in Motor General Trader's case. In Satyawati Sharma (supra) the issue
before the Supreme Court was whether the classification under Section
14(l)e of the DRC Act is ultra vires the Constitution. Taking into
consideration matters of common knowledge, matters of common report and
the present-day, history the Supreme Court held that a legislation which may
have been reasonable at the time of its enactment may with the passage of
time and changed circumstances become unreasonable and violative of the
doctrine of equality and the court may strike down the same if it is found
that the rationale of „classification‟ has become non-existent. The same
observations about the change in the economic and other spheres of tenants
W.P.(C) 516/2010 & connected matters Page 16 of 66
in the last 56 years would hold true not just to one section of DRC Act but to
the entire Act. On this ground alone and in accordance with principles
enunciated in Dalmia's case the DRC Act has become otiose and
unconstitutional.
23. It is urged that successive governments have abdicated its
responsibility by not notifying the Delhi Rent Act, 1995 and is in fact in the
process of repealing it thereby setting the entire process backwards by over
22 years, it is the constitutional obligation of this court to strike down the
DRC Act as unconstitutional. Deference to the wisdom of the Government
in power is appropriate only when the Government's purpose is legitimate
and its means rational. Even though the courts have no power to issue a
mandamus to notify an Act but judicial review of legislation is an integral
part of the Constitution.
24. Arguing that the DRC Act is a forced welfare program funded by
those landlords who happen to have rent- controlled tenants. Such a forced
welfare program on private citizens can pass the rigors of the constitutional
guarantees only in extreme emergency situations like the aftermath of the
partition of the country. The entire scheme of the DRC Act is
unconstitutional as it places excessive and disproportionate burden on the
landlords to subsidize the rent-controlled tenants who are mostly quite
affluent. An anomalous situation has been created in which the circle rates.
Property taxes etc are all based on market value of the property but rent
under DRC Act stay frozen to a miniscule amount at which the property was
first let with negligible permissible increases. If this particular section of the
society - for an undisclosed reason - has to be subsidized then the burden of
such subsidy has to be shared by the society as a whole like in Public
W.P.(C) 516/2010 & connected matters Page 17 of 66
Distribution System or the subsidy on diesel, cooking gas etc. The DRC Act
instead of allowing landlords to make profit out of their property is inflicting
losses on them. The observations of the European Court of Human Rights in
Hutten-Czapska v. Poland [GC], [no. 35014/97, ECHR 2006-VIII -
(19.6.06)]] that "One of the essential elements of the right of property is the
possibility of deriving profit from the object of ownership, which is of
particular importance in a market economy ." is relied upon. Counsel stress
that the State is under a moral obligation to compensate the landlords for the
financial losses suffered by them on account of the DRC Act. The non-
consensual, unwanted, continued occupation of premises by the tenants
under the sanction of the State amounts to requisition of the premises
making the landlords entitled to be compensated by the state. As the tenants
are forcibly occupying the property against the will of the landlords by the
force of an unjust law, the Government is deemed to be in occupation of the
property through the tenants which entitles landlords to compensation at the
same rate of rent which they would have received if the property had been
directly requisitioned by the Government for its own use. The violation of
principles of promissory estoppels and legitimate expectations would also
entitle the landlords to compensation as the Government has failed to keep
its promise to reform the Act. The promise was first made in 1995 when the
President of India gave his assent to Delhi Rent Act, 1995 giving rise to
legitimate expectations of the landlords of getting back the possession of
their property or atleast deriving a reasonable income from it. The promise
was reiterated in assurances given by the Government in Parliament and in
courts. This promise has not been fulfilled till date. It is unfair and immoral
on the part of the State not to fulfil its promise. The landlords are therefore
W.P.(C) 516/2010 & connected matters Page 18 of 66
entitled to compensation from the Government. [M/s S. V.A. Steel Re-rolling
Mills Ltd v. State of Kerala (2014) 4 SCC 186].
25. The stated position of the Union of India ("UOI" hereafter) is that the
DRC Act has been amended from time to time keeping in view the changing
needs of society and in order to strike a balance between the interest of
landlords as also the tenants and for giving a boost to house building
activity. It is urged that the constitutional validity of various provisions and
amendments to the Act has been challenged from time to time and on all
occasions the constitutional validity has been upheld by this Court and the
Supreme Court of India. The classification made by the Act has time and
again been held to be a reasonable classification within legislative
competency of the legislation. It is further pointed out that even today the
position with regard to Rent Control legislation is not static, though it is
correct. That the Delhi Rent Control Act, 1995 has not been notified and it is
submitted that after examining and considering representations from all
sections of the society, it was decided to amend the 1995 Bill and
accordingly, Delhi Rent (Amendment) Bill, 1997 was drafted and introduced
in the Rajya Sabha on 28th July, 1997. The said Bill was referred to the
Parliamentary Standing Committee on Urban and Rural Development to
examine and report. The Committee could not submit its report since 11 th
Lok Sabha was dissolved in January, 1998. Subsequently, the Bill could not
be taken up even in the 12th Lok Sabha which was dissolved on 26th April,
1999. After formation of the 13th Lok Sabha, the Cabinet approved the
decision to pursue the Amendment Bill, 1997 in its existing form and the
said Bill was referred to the Standing Committee on Urban and Rural
Development which submitted its Report to the Parliament on 21st
W.P.(C) 516/2010 & connected matters Page 19 of 66
December, 2000. However, recommendations of the Committee once again
required consideration, before being taken up for discussion by the Rajya
Sabha and Lok Sabha.
26. It is submitted that in a meeting of the representatives of the
Government of NCT of Delhi and the Ministry of Urban Development held
in March, 2012, the Government of NCT of Delhi favored preparation of
new Draft Bill to be placed in a public domain for adequate discussion in
light of the changed scenario. Accordingly, the Cabinet approval was
obtained in July, 2013 to repeal Delhi Rent Control Act, 1995 and withdraw
the Delhi Rent (Amendment) Bill, 1997 pending in the Rajya Sabha. The Bill
to repeal the Delhi Rent Control Act, 1995 was introduced in the Rajya
Sabha on 29th August, 2013 and is pending for consideration.
27. It is stated that the concerned authorities in a meeting held on 27th
June, 2014,directed that inputs from all important stakeholders along with
inputs from the Government of NCT of Delhi be taken for drafting a new
Bill with respect to Rent Control Legislation, Delhi. As such, it is apparent
that the Government keeping in view the interest of various stakeholders is
in the process of evolving Rent Control Legislation in order to balance the
interest of both landlords and tenants. It cannot be said that there is no
requirement whatsoever for any rent control legislation to be in place as
there are numerous sections of the society which cannot afford housing in
Delhi and their tenancy needs to be protected. It is also pertinent to point out
that rent control legislation exists in all States in the country albeit in varying
forms.
28. lt is submitted that the challenge to the validity of the Act based on the
violation of Article 19(1)(g), i.e. the right to practice any profession or to
W.P.(C) 516/2010 & connected matters Page 20 of 66
carry on any occupation, trade or business is subject to the restriction
provided under Article 19(6) which does not prevent the State from making
any law imposing reasonable restriction on the exercise of the right
conferred under Article 19(1)(g). It is further submitted that the said
challenge is also premised on an alleged economic hardship suffered by
landlords to rent their premises at a market rent and an alleged subsidization
of rich tenants. It is stated that for a challenge to succeed under Article 19
(1)(g), the petitioner must show that there has been restriction / prohibition
on the right to carry on business or trade. In the present case, there is no
restriction on a landlord to rent out his / her premises. In fact, Section 6A of
the Delhi Rent Control Act also provides for an increase in the rent by 10%
every three years. The allegation of the petitioners is merely that their
properties may be able to fetch high rents. In this regard, it is submitted that
just because there is a reduction in the profit that the landlord may make
cannot be the basis of a challenge under Article 19(1)(g). There is no
restriction of letting and the mere ground that their business of letting is not
profitable cannot be ground under Article 19(1)(g). Thus, correspondingly
there is no violation of Article 13 as well.
29. As far as the right to equality under Article 14 and the right to
protection of life under Article 21 are concerned, it is submitted that there is
no violation whatsoever of the right available to a citizen under Article 21 by
the imposition of the Delhi Rent Control Act. As far as Article 14 is
concerned, it is submitted that the constitutional validity of the classification
that has been done by the Delhi Rent Control Act has been upheld by the
Supreme Court of India on various occasions, and as such, challenge under
Article 14 is not maintainable.
W.P.(C) 516/2010 & connected matters Page 21 of 66
30. It is submitted that there is nothing in the Objects and Reasons of the
Delhi Rent Control Act, 1958 or its subsequent amendments right uptil the
Delhi Rent Control (Amendment) Act, 1988 to suggest that the Act was
meant to be a temporary measures. The Supreme Court in the case of
Rahabar Productions Pvt. Ltd. v Rajinder K. Tandon - (1998) 4 SCC 49 has
summed up the essence of the Act as under:
" 8. The Act which was brought on the Statute book in 1958 is a
composite legislation in the sense that while providing
protection to the tenants, who, under common law, including
Transfer of Property Act, could be evicted from the premises let
out to them, at any time by the landlord on the termination of
their tenancy, it restricts the right of the landlords to evict the
tenants at their will. This Act is thus beneficial as also
restrictive in nature. The Courts are, therefore, under a legal
compulsion to harmoniously read the provisions of the Act so
as to balance the rights of the landlord and the obligations of
the tenant towards each other keeping in mind that one of the
objects of the legislature while enacting the Act was to curb the
tendency of the greedy landlords to throw out the tenants,
paying lower rent, in the name of personal occupation and rent
out the premises at the market rate."
31. Counsel urged that the DRC Act is not a one-sided legislation - the
classification of `3,500/- is not arbitrary. It was highlighted that the Act was
enacted for the control rental housing market, fixation of standard rents,
protection of tenants against indiscriminate eviction and the obligation of
landlord regarding maintenance and the rights of the landlords to maintain a
petition for recovery of possession under certain circumstances. Counsel
submitted that the Rent Control Tribunals set up under the Act are
functioning in an efficient manner and innumerable landlords have obtained
eviction orders against tenants on the basis of the grounds enumerated under
W.P.(C) 516/2010 & connected matters Page 22 of 66
the Act. Thus, to say that the Act provides an unfettered protection to a
tenant is incorrect.
32. As far as classification of `3,500/- rent being the cut-off is concerned,
it is submitted that the said classification as enacted under Section 3(c) and
inserted vide the Delhi Rent Control (Amendment) Act, 1988 has been held
to be a valid classification and in no way violative of the Constitution of
India by the Supreme Court in the case of D. C. Bhatia (supra). The
Supreme Court of India has held the said classification to be reasonable and
having been made in order to strike a balance between the interest of
landlord and tenant as also for giving a boost to household activity.
33. It is pointed out that the Supreme Court has held that it is for the
legislature to decide what should be the cut-off point for the purpose of
classification and the legislature must necessarily have a lot of latitude in
this regard. It is well settled that safeguard provided under Article 14 can
only be invoked if a classification is made on the ground which are totally
irrelevant to the object of statute. However, if there exists some nexus
between the object sought to be achieved and the classification, the
legislature shall be presumed to have acted in proper exercise of its
constitutional powers. It is further submitted that classification may in
practice result in some hardship but such a statutory classification cannot be
set aside on account of hardships if there are facts on the basis of which the
said classification can be justified and relatable to the object of the statute.
34. The UOI highlights that various provisions of the DRC Act have been
challenged from time to time and upheld by the Supreme Court. The Courts
have time and again held that the Rent Control legislation is a beneficial
legislation both for landlords and tenants. Some of the illustrative cases
W.P.(C) 516/2010 & connected matters Page 23 of 66
relating to constitutional challenge to specific Sections of the Delhi Rent
Control Act are as under:
Section Particulars of the Case
14B Mahendra Raj v. UOI - 1990 (2) Rent LR 63
14C B.M. Channa v. UOI - 1990 (1) RCR 312
14D K.L. Malhotra v. Prakash Mehra - AIR 1991
SC 99
14(1)(e) Amritjit Singh v. Khatoon Quamarain 1986 (4)
SCC 736
H.C. Sharma v. LIC - 1973 (1) ILR (Del) 90
25B Kewal Singh Lajwanti AIR 1980 SC 161
3(c) D.C. Bhatia v. UOI - 1995 (1) SCC 104
(Delhi High Court decision - 1991 (43) DLT
425
2(I)(iii) Gauri Shankar v. UOI
1994 (6) SCC 349
35. It is submitted that the DRC Act cannot be said to have lost its
relevance inasmuch as there is a large section of society which still requires
protection under the Act so that their needs for housing can be met and are
not violated by unscrupulous landlords in search for profits. It is highlighted
that rent control legislation exists in almost every State of India and
challenges to the said legislation and their provisions many of which are
pari-matria to the provisions of the Delhi Rent Control Act have been
upheld by their respective High Courts and also by the Supreme Court of
India.
36. Dealing with the issue of challenge to the DRC Act vis-à-vis the
classification of premises as residential and non-residential, it is contended
that it is a well-considered classification. This classification of properties as
such is well accepted and practiced while fixing rate of property tax, rate of
W.P.(C) 516/2010 & connected matters Page 24 of 66
charges for consumption of electricity and water etc. This classification had
withstood judicial scrutiny. The Legislature has clearly distinguished
residential premises from non-residential premises while deciding the
grounds of equity as enshrined in Article 14. It is further submitted that the
classification as above was deliberated upon and considered by the
Legislature as well as Parliamentary Standing Committee while examining
the Delhi Rent Control Bill, 1994 and it is after due deliberation that the
classification has been retained. It is denied that the difference between
premises may proceed to file an application for recovery of possession of the
premises. There is no warrant for either holding Section 14(1)(d) to be
unreasonable or for reading anything into it beyond what the Legislature has
prescribed. In any case, in Satyawanti Sharma (supra), the Supreme Court
had struck down the reference to let for residential purposes only with
respect to Section 14(1)(e) of the Act and the consequent 'Explanation‟
following the above said Section. The petitioner cannot agitate parity in
residential and non-residential premises on account of the broad objectives
of the DRC Act.
37. As to the vires of Section 50 (1) it is submitted that though
Raghunandan Saran (supra) struck down and declared unconstitutional
provisions of the DRC Act outlining the manner of determining standard
rent, that did not mean that per se Section 50 (1) was rendered void. It is
highlighted that the argument on which the petition is premised, i.e. a Civil
Court would be entitled to maintain petition for fixation of standard rent is
without merit. It is also submitted that Sections 4, 6 and 8 of the DRC Act
provides for the method of fixation of standard rent and in view of the
method provided under the DRC Act power was conferred exclusively on
W.P.(C) 516/2010 & connected matters Page 25 of 66
the Controller to fix standard rent. Fixation of standard rent is not a relief in
common law that can be claimed without reference to a specific statute. It is
argued that this court declares Sections 4, 6 and 9 of the DRC Act as
unconstitutional, there is no existing statute under which a Civil Court can
be asked to determine and fix standard rent.
Relevant provisions of the DRC Act.
38. The definition clause (Section 2) of the DRC Act, to the extent it is
relevant, states as follows:
"2. Definitions. - In this Act, unless the context otherwise
requires-
(a) "Basic rent", in relation to premises let out before the
2nd day of June, 1944, means the basic rent of such premises as
determined in accordance with the provisions of the Second
Schedule;
(b) "Controller" means a Controller appointed under sub-
section (1) of section 35 and includes an additional Controller
appointed under sub-section (2) of that section;
(c) "Fair rate" means the fair rate fixed under section 31 and
includes the rate as revised under section 32;
(d) "Hotel or lodging house" means a building or part of a
building where lodging with or without board or other services
is provided for a monetary consideration;
(e) "Landlord" means a person who, for the time being is
receiving, or is entitled to receive, the rent of any premises,
whether on his own account or on account of or on behalf of, or
for the benefit of, any other person or as a trustee, guardian or
receiver for any other person or who would so receive the rent
to be entitled to receive the rent, if the premises were let to a
tenant;
W.P.(C) 516/2010 & connected matters Page 26 of 66
(f) "Lawful increase" means an increase in rent permitted
under the provisions of this Act;
(g) "Manager of a hotel" includes any person in charge of the
management of the hotel;
(h) "Owner of a lodging house" means a person who receives
or is entitled to receive whether on this own account or on
behalf of himself and others or as an agent or a trustee for any
other person, any monetary consideration from any person on
account of board, and lodging or other services provided in the
lodging house;
(i) "premises" means any building or part of a building which
is, or is intended to be, let separately for use as a residence or
for commercial use or for any other purpose, and includes.-
(i) the garden, grounds and outhouses, if any, appertaining to
such building or part of the building;
(ii) any furniture supplied by the landlord for use in such
building or part of the building; but does not include a room in
a hotel or lodging house;
(j) "prescribed" means prescribed by rules made under this
Act;
(k) "standard rent", in relation to any premises, means the
standard rent referred to in section 6 or where the standard
rent has been increased under section 7, such increased rent;
[(l) (Note: Subs. by Act 18 of 1976, sec.2, for clause (1) (w.e.f.
1-12-1975)) "tenant" means any person by whom or on whose
account or behalf the rent of any premises is, or, but for a
special contract, would be, payable, and includes-
(i) a sub-tenant;
(ii) any person continuing in possession after the termination
of his tenancy; and
W.P.(C) 516/2010 & connected matters Page 27 of 66
(iii) in the event of the death of the person continuing in
possession after the termination of his tenancy, subject to the
order of succession and to this clause, such of the aforesaid
person's-
(a) spouse,
(b) son or daughter, or, where there are both son and daughter,
both of them,
(c ) parents,
(d) daughter-in-law, being the widow of his pre-deceased
son, as had been ordinarily living in the premises with such
person as a member or members of his family up to the date of
his death, but does not include,-
(A) any person against whom an order or decree for eviction
has been made, except where such decree or order for eviction
is liable to be re-opened under the proviso of section 3 of the
Delhi Rent Control (Amendment) Act, 1976 (18 of 1976);
(B) any person to whom a licence, as defined by section 52 of
the Indian Easements Act, 1882 (5 of 1882), has been granted.
Explanation1.- The order of succession in the event of the death
of the person continuing in possession after the termination of
his tenancy shall be as follows:-
(a) firstly, his surviving spouse;
(b) secondly, his son or daughter, or both, if there is no
surviving spouse, or if the surviving spouse did not ordinarily
live with the deceased person as a member of his family up to
the date of his death;
(c ) thirdly, his parents, if there is no surviving spouse, son or
daughter or any of them, did not ordinarily live in the premises
as a member of the family of the deceased person up to the date
of his death; and
W.P.(C) 516/2010 & connected matters Page 28 of 66
(d) fourthly, his daughter-in-law, being the widow of his pre-
deceased son, if there is no surviving spouse, son, daughter or
parents of the deceased person, or if such surviving spouse,
son, daughter or parents, or any of them, did not ordinarily live
in the premises as a member of the family of the deceased
person up to the date of his death.
Explanation II.- If the person, who acquires, by succession, the
right to continue in possession after the termination of the
tenancy, was not financially dependent on the deceased person
on the date of his death, such successor shall acquire such right
for a limited period of one year; and on the expiry of that
period, or on his death, whichever is earlier, the right of such
successor to continue in possession after the termination of the
tenancy shall become extinguished.
Explanation III.-For the removal of doubts, it is hereby
declared that, -
(a) where, by reason of Explanation II, the right of any
successor to continue in possession after the termination of the
tenancy becomes extinguished, such extinguished shall not
affect the right of any other succession of the same category to
continue in possession after the termination of the tenancy; but
if there is no other successor of the same category, the right to
continue in possession after the termination of the tenancy shall
not, on such extinguishments, pass on to any other successor,
specified in any lower category or categories, as the case may
be;
(b) the right of every successor, referred to in Explanation I, to
continue in possession after the termination of the tenancy,
shall be personal to him and shall not, on the death of such
successor, develop on any of his heirs]"
39. The other relevant provisions of the Act, are extracted below:
"3. Act not to apply to certain premises.- Nothing in this Act
shall apply -
W.P.(C) 516/2010 & connected matters Page 29 of 66
(a) To any premises belonging to the Government; (Note: The
word "or" omitted by Act 57 of 1988, sec.2 (w.e.f. 1-12-1988).
(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:
[(Note: Added by Act 4 of 1963, sec.2 (with retrospective effect)
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) (Note: Ins. by Act 37 of 1988, sec.2 (w.e.f. 1-12-1988) To
any premises, whether residential or not, whose monthly rent
exceeds there thousand and five hundred rupees; or
(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;]
****************
***************
4. Rent in excess of standard rent not recoverable. - (1)
Except where rent is liable to periodical increase by virtue of
an agreement entered into before the 1st day of January, 1939,
no tenant shall, notwithstanding any agreement to the contrary,
be liable to pay to his landlord for the occupation of any
premises any amount in excess of the standard rent of the
premises, unless such amount is a lawful increase of the
standard rent in accordance with the provisions of this Act.
(2) Subject to the provision of sub-section (1) any agreement
for the payment of rent in excess of the standard rent shall be
construed as if it were an agreement for the payment of the
standard rent only.
5. Unlawful changes not to be claimed or received. - (1)
Subject to the provisions of this Act, no person shall claim or
receive any rent in excess of the standard rent, notwithstanding
any agreement to the contrary.
(2) No person shall, in consideration of the grant, renewal or
continuance of a tenancy or sub-tenancy or sub-tenancy of any
premises,-
(a) Claim or receive the payment of any sum as premium or
pugree of claim or receive any consideration whatsoever, in
cash or in kind, in addition to the rent; or
(b) Except with the previous permission of the Controller, claim
or receive the payment of any sum exceeding one month's rent
of such premises as rent in advance.
(3) It shall not be lawful for the tenant or any other person
acting or purporting to act on behalf of the tenant or a sub-
tenant to claim or receive any payment in consideration of the
relinquishment, transfer or assignment of his tenancy or sub-
tenancy, as the case may be, of any premises.
(4) Nothing in this section shall apply-
(a) To any payment made in pursuance of an agreement entered
into before the 1st day of January, 1939; or
(b) To any payment made under an agreement by any person to
a landlord for the purpose of financing the construction of the
whole or part of any premises on the land belonging to taken on
lease by, the landlord, if one of the conditions of the agreement
is that the landlord is to let to that person the whole or part of
the premises when completed for the use of that person or any
member of his family:
Provided that such payment does not exceed the amount of
agreed rent for a period of five years of the whole or part of the
premises to be let to such person.
Explanation. - For the purpose of clause (b) of this sub-section,
"member of the family" of a person means, in the case of an
undivided Hindu Family, any member of the family of that
person and in the case of any other family, the husband, wife,
son, daughter, father, mother, brother, sister or any other
relative dependent on that person.
6. Standard rent. - (1) Subject to the provisions of sub-section
(2), "standard rent", in relation to any premises means -
(A) In the case of residential premises-
(1) Where such premises have been let out at any time before
the 2nd day of June,1944,-
(a) If the basic rent of such premises per annum does not
exceed six hundred rupees, the basic rent; or
(b) If the basic rent of such premises per annum exceeds six
hundred rupees, the basic rent together with ten per cent, of
such basic rent;
(2) Where such premises have been let out at any time on or
after the 2nd day of June, 1994,-
(a) In any case where the rent of such premises has been fixed
under the Delhi and Ajmer- Merwar Rent Control Act, 1947 (19
of 1947), or the Delhi and Ajmer Rent Control Act, 1952 (37 of
1952),-
(i) If such rent per annum does not exceed twelve hundred
rupees, the rent so fixed; or
(ii) If such rent per annum exceeds twelve hundred rupees, rent
so fixed together with ten per cent. of such rent;
(b) In any other case, the rent calculated on the basis of [(Note:
Subs. by Act 57 of 1988, sec.3, for "seven and one-half per
cent." (w.e.f. 1-12-1988) ten per cent]. per annum of the
aggregate amount of the [(Note: Subs. by Act 57 of 1988, sec.3,
for "reasonable" (w.e.f. 1-12-1988) actual] cost of construction
and the market price of the land comprised in the premises on
the date of the commencement of the construction :
(Note: Proviso omitted by Act 57 of 1988, sec.3 (w.e.f. 1-12-
1988)
(B) In the case of premises other than residential premises-
(1) Where the premises have been let out at any time before the
2nd day of June, 1944, the basic rent of such premises together
with ten per cent. of such basic rent:
Provided that where the rent so calculated exceeds twelve
hundred rupees per annum, this clause shall have effect as if for
the words "ten per cent.", the words "fifteen per cent." had been
substituted;
(2) Where the premises have been let out at any time on or after
the 2nd day of June, 1944,-
(a) In any case where the rent of such premises has been fixed
under the Delhi and Ajmer-Merwar Rent Control Act, 1947 (19
of 1947) or the Delhi and Ajmer Rent Control Act, 1952 (38 of
1952),-
(i) If such rent per annum does not exceed twelve hundred
rupees, the rent so fixed; or
(ii) If such rent per annum exceeds twelve hundred rupees, the
rent so fixed together with fifteen per cent. of such rent;
(b) In any other case, the rent calculated on the basis of [(Note:
Subs. by Act 57 of 1988, sec.3, for "seven and one-half per
cent" (w.e.f. 1-12-1988) ten per cent] per annum of the
aggregate amount of the [(Note: Subs. by Act 57 of 1988, sec.3,
for "reasonable" (w.e.f. 1-12-1988) actual] cost of construction
and the market price of the land comprised in the premises on
the date of the commencement of the construction:
(Note: Proviso omitted by Act 57 of 1988, sec.3 (w.e.f. 1-12-
1988)
(2) Notwithstanding anything contained in sub-section (1),-
(a) In the case of any premises, whether residential or not,
constructed on or after the 2nd day of June, 1951, but before the
9th day of June, 1955, the annual rent calculated with reference
to the rent at which the premises were let for the month of
March, 1958, or if they were not so let, with reference, to the
rent at which they were last let out, shall be deemed to be
standard rent for a period of seven years from the date of the
completion of the construction of such premises; (Note: The
word "and" omitted by Act 57 of 1988, sec.3 (w.e.f. 1-12-1988)
(b) In the case of any premises, whether residential or no,
constructed on or after the 9th day of June, 1955, including
premises constructed after the commencement of this Act
[(Note: Ins. by Act 57 of 1988, sec.3 (w.e.f. 1-12-1988) but
before the commencement of the Delhi Rent Control
(Amendment) Act, 1988], the annual rent calculated with
reference to the rent agreed upon between the landlord and the
tenant when such premises were first let out shall be deemed to
be the standard rent for a period of five years from the date of
such letting out.
[(c) (Note: Ins. by Act 57 of 1988, sec.3 (w.e.f. 1-12-1988) In
the case of any premises, whether residential or not,
constructed on or after the commencement of the Delhi Rent
Control (Amendment) Act, 1988 and to which the provisions of
this Act are made applicable by virtue of clauses (d) of section
3, the rent calculated on the basis of ten per cent, per annum of
the aggregate amount of the actual cost of construction of the
premises and the market price of the land comprised in the
premises on the date of commencement of the construction, of
the premises shall be deemed to be the standard rent]
(3) For the purpose of this section, residential premises include
premises let out for the purpose of a public hospital, an
educational institution, a public library, reading room or an
orphanage."
****************************
**************
14. Protection of tenant against eviction. -
(1) 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 and court or
Controller in favour of the landlord against a tenet:
Provided that the Controller may, on an application made to
him in the prescribed manner, make an order for the recovery
of possession of the premises on one or more of the following
grounds only, namely:-
(a) That 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 landlord in the manner provided
in section 106 of the Transfers of Property Act, 1882 (4 of
1882);
(b) That the tenant has, on or after the 9th day of June, 1952,
sublet, assigned or otherwise without obtaining the consent in
writing of the landlord;
(c) 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 9 th 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 corisent;
(d) That 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 the filing of the application for the recovery of
possession thereof;
(e) That the premises let for residential purpose are required
bona fide by the landlord for occupation as a residence for
himself or for any member of his family dependent on him, if he
is the owner thereof , or for any person for whose benefit the
premises are held and the landlord or such person has no other
reasonably suitable residential accommodation;
Explanation.- For the purpose of this clause, "premises let for
residential purpose" include any premises which having been
let for use as a residence are, without the consent of the
landlord, used incidentally for commercial or other purposes;
(f) That the premises have become unsafe or unfit for human
habitation and are required bona fide by the landlord for
carrying out repairs which cannot be carried out without the
premises being vacated;
(g) That the premises are required bona fide by the landlord
for the purpose building or re-building or making thereto any
substantial additions or alterations and that such building or
re-building or addition or alteration cannot be carried out
without the premises being vacated;
(h) That the tenant has, whether before or after the
commencement of this Act, (Note: The word "built" omitted by
Act 57 of 1988, sec.8 (w.e.f. 1-12-1988)) acquired vacant
possession of, or been allotted, a residence;
[(hh) (Note: Ins. by Act 57 of 1988, sec.8 (w.e.f. 1-12-1988))
That the tenant has, after the commencement of the Delhi Rent
Control (Amendment) Act, 1988, built a residence and ten years
have elapsed there-after;]
(i) That the premises were let to the tenant for use as a
residence by reason of his being in the service or employment
of the landlord, and that the tenant has ceased, whether before
or after the commencement of this Act, to be in such service or
employment;
(j) That the tenant has, whether before or after the
commencement of this Act, caused or permitted to be caused
substantial damage to the premises;
(k) That the tenant has, notwithstanding previous notice, used
or dealt with the premises in a manner contrary to any
condition imposed on the landlord by the Government or the
Delhi Development Authority or the Municipal Corporation of
Delhi while giving him a lease of the land on which the
premises are situate;
(i) That the landlord requires the premises in order to carry
out any building work at the instance of the Government or the
Delhi Development Authority or the Municipal Corporation of
Delhi in pursuance of any improvement scheme or development
scheme and that such building work cannot be carried out
without the premises being vacated.
(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.
(3) 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.
(4) For the purpose of clause (b) of the proviso to sub-section
(1), 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 is a
partner of the tenant in the business or profession but really for
the purpose of sub-letting such premises to the person.
(5) 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.
(6) Where a landlord has acquired any premises by transfer,
no application for the recovery of possession of such premises
shall lie under sub-section (1), on the ground specified in
clause (e ) of the proviso thereto, unless a period of five years
have elapsed from the date of the acquisition.
(7) Where an order for the recovery of possession of any
premises is made on the ground specified in clause(c ) of the
proviso to sub-section (1), the landlord shall not be entitled to
obtain possession thereof before the expiration of a period of
six months from the date of the order.
(8) No order for the recovery or possession of any premises
shall be made on the ground specified in clause (g) of the
proviso to sub-section (1), unless the Controller is satisfied that
the proposed reconstruction will not radically after the purpose
for which the premises were let or such ramidically alteration
is in the public interest, and that the plans and estimates of such
reconstruction have been properly prepared and that necessary
fund for the purpose are available with the landlord.
(9) No order for the recovery of possession of any premises
shall be made on the ground specified in clause (I) of the
proviso to sub-section (1), if the Controller is of opinion that
there is any bona fide dispute as to whether the tenant has
ceased to be in the service or employment of the landlord.
(10) No order for the recovery of possession of any premises
shall be made on the ground specified in clause ,(i) of the
proviso to sub-second (1) if the tenant, within such time as may
be specified in this behalf by the Controller, carries out repairs
to the damage caused to the satisfaction of the Controller or
pays to the landlord such amount by way of compensation as
the Controller may direct .
(11) No order for the recovery of possession of any premises
shall be made on the ground specified in clause(k) of the
proviso of sub-section (1), if the tenant, within such time as may
be specified in this behalf by the Controller, complies with the
condition imposed on the landlord by any of the authorities
referred to in that clause or pays to that authority such amount
by way of compensation as the Controller may direct."
Analysis and Conclusions
40. The petitioners no doubt, frontally challenge the vires of the DRC Act
on the ground that it is discriminatory and arbitrary (and therefore violates
Article 14 of the Constitution of India) and is also unreasonable, since it
unreasonably restricts the occupation of landlords (of rented premises) of
carrying on business and deriving income from them. Amongst other
grounds, it was urged that past rulings which upheld the reasonableness of
the restrictions, or the classifications, are of no consequence, given the
passage of time, and changing realities. The main decision cited by the
petitioners, i.e Malpe Vishwanath Acharya (supra), was concerned with a
challenge to provisions of the Bombay enactment, vis-à-vis the fixation of
standard rent of tenanted premises. The relevant facts which the court
considered, and the conclusions it recorded are as follows:
"The appellants are landlords or their representatives of
different premises in Bombay which have been given on rent to
various tenants. They had filed in the High Court of Bombay
writ petitions challenging the constitutional validity of Section
5 (10) (B), Section 11 (1) and Section 12(3) of the Bombay
Rent Act, inter alia, on the ground that the said provisions
pertaining to standard rent were ultra vires Articles 14, 19 and
21 of the Constitution and consequently void. The main
challenge to the said provisions was on the ground that the
restriction on the right of the Landlords to increase rents,
which has been frozen as on 1st September, 1940 or at the time
of the first letting, was no long a reasonable restriction and the
said provisions had, with the passage of time, become
arbitrary, discriminatory, unreasonable and consequently ultra
vires Article 14 of the Constitution. By the impugned judgment
the High Court dismissed the writ petitions, inter alia, holding
that the object of the Bombay Rent Act was not to provide to the
landlord an adequate return on its investment and it was not
open to him to claim an increase in the rent by taking into
account the increase in the land privies etc. The Court also
observed that the writ petitions lacked particulars in order to
satisfy the Court that the relevant provisions of the Bombay
Rent Act were unreasonable or arbitrary.
******************** ****************
Taking all the facts and circumstances into consideration we
have no doubt that the existing provisions of the Bombay Rent
Act relating to the determination and fixation of the standard
rent can no longer be considered to be reasonable. The said
provisions would have been struck down as having now become
unreasonable and arbitrary but we think it is not necessary to
strike down the same in view of the fact that the present
extended period of the Bombay Rent Act comes to an end on
31st march, 1998. The government's thinking reflected in
various documents itself shows that the existing provisions have
now become unreasonable and, therefore, require
reconsideration. The new bill is under consideration and we
leave it to the legislature to frame a just and fair law keeping in
view the interests of all concerned and in particular the
resolution of the State Ministers for Housing of 1992 and the
National Model law which has been circulated by the Central
Government in 1992. We are not expressing any opinion on the
provisions of the said Model law but as the same has been
drafted and circulated amongst all the States after due
deliberation and thought, there will, perhaps, have to be very
good end compelling reasons in departing from the said Model
Law. Mr. Nargolkar assured us that this Model law will be
taken into consideration in the framing of the proposed new
Rent Control Act."
41. The reports that the petitioners have largely relied on: the LK Jha
report, resolutions of the conference of Housing Ministers, of 1987; National
Housing Policy, 1992, find mention in both Malpe Vishwanath Acharya
(supra) and Raghunandan Saran (supra). In fact, taking a leaf from out of
Malpe Vishwanath Acharya (supra), and relying on its conclusions, the
Division Bench, in Raghunandan Saran (supra), held Sections 4-6 of the
DRC Act, unconstitutional, observing as follows:
"27. In Issac Nina v. State of Kerala, 1995 (2) KLT 848, the
Kerala High Court while dwelling with the issue of the vires of
the Buildings (Lease and Rent Control) Act, 1965 (Kerala) held
as follows:
".....what was once a non-discriminatory piece of legislation
may in course of time become discriminatory and be exposed to
a successful challenge on the ground that it violated
fundamental rights of the Constitution."
".....As held by the Supreme Court in Inder Mohan Lal v
Ramesh Khanna, there is no presumption in all case that the
tenant are weaker sections. By lapse of time the tenants (at
least many of them) doing business in commercial buildings
taken on rent are far more affluent financially than the owners
of the building in which they do business. Though the rent
control legislation is stated to be a beneficial one, it must be
reasonable, just and fair. It is true that there is a presumption
as to the constitutionality of the provision of a legislative
enactment and the Act should be so read as to prevent it from
being exposed to the vice of unconstitutionality. But the
presumption will stand rebutted if the scrutiny of the impugned
provision would unmistakably establish that it violates a
fundamental right."
".....The Supreme Court held in State of Madras v V.G. Row ,
that reasonableness of the restriction is to be considered both
from the point of substantive law as well as procedural law. In
deciding the reasonableness of the restriction several
circumstances such as the purpose of the Act, the condition
prevailing in the country at the time enactment, duration of the
restriction, extent and nature of the restriction, are to be taken
into consideration."
"Disparity between the cost of living or the rupee value in 1965
and 1995 is so massively vast it is absolutely unrealistic to act
on the former for any final reckoning as for the latter. If a
building was leased out in 1950, the property tax would have
been, from the angel of today's money value, a piffling. The
requirement in Section 5 (2) that the Court shall take into
consideration the property tax fixed at the time of lease, if to be
followed in 1995 in respect of a building leased in 1950, the
result would be ostensibly unjust and unreasonable. We bear in
mind that no provision is included in the Act for updating
according to the rupee value while fixing the fair rent."
"Nor can we shut our eyes to the other side of the picture. A
tenant who took the building for commercial purposes in 1950
could increase turnover of his business many times and as a
corollary his margin of profit would have enhanced leaps and
bounds. But the person who built the building (in which the
tenant conducts the business) is entitled to get a rent based on
1950 money value. Similar position arises in the case of a
residential building. The tenant who occupies the building
would have augmented the resources or at least his income
today is on par with the present money value. But the man who
invested money to build a house in which the tenant is residing
is entitled to get rent only at the rate based on the money value
which prevailed at the time of letting."
"Apart from the fact that the impugned provisions are unjust
and unreasonable as they offend Article 14 of the Constitution,
we may say that those provisions would offend Article 19 (1)
(g) also."
"We are, therefore, of the opinion that the impugned provisions
do not stand the test of reasonableness. Accordingly, we
declare that provisions relating to fair rent, i.e., Sections 5, 6
and 8 of the Act, put together are ultra vires the Constitution of
India and are void."
28. Applying the same rationale as was applied by the Supreme
Court in Malpe Vishwanath Acharya (supra) and the Kerala
High Court in Issac Nina (supra), we are of the view that
Sections 4, 6 and 9 of the Delhi Rent Control Act, 1958,
dealing with determination and fixation of standard rent, which
have not taken into account the huge difference between the
cost of living in the past and the present time, do not pass the
test of reasonableness. The provisions are archaic. They
contain no mechanism to compensate the landlords to offset
inflation. There ought to be a mechanism to increase the agreed
rents keeping in vie the price index. The landlords are being
treated arbitrarily, unreasonably and unfairly affecting their
livelihood and in turn right to life and avocation. These
provisions relating to standard rent, therefore, offend Articles
14, 19(1)(g) and 21 of the Constitution."
42. Interestingly, just like Raghunandan Saran (supra), - in Delhi, but
before it, the Rajasthan High Court, in Khem Chand v. State of Rajasthan &
Anr AIR 1999 Raj 305 held as ultra vires the standard rent provisions
(Section 6) of the Rajasthan Premises (Control of Rent and Eviction) Act,
1950.
43. As far as the omnibus challenge to provisions that according to the
petitioners, this court notices that in Amarjit Singh v Smt. Khatoon
Quamarin1986 (4) SCC 736, it was held that:
"The Act in question is the authority of law. There is no denial
of equality nor any arbitrariness in the second limb of Section
14 (1) (e) of the Act read in the manner contended for by the
appellant. Article 21 is not violated so far as the landlord is
concerned. The rent restricting acts are beneficial legislations
for the protection of the weaker party in the bargains of letting
very often. These must be so read that these balance
harmoniously the rights of the landlords and the obligations of
the tenants. The Rent Restriction Acts deal with the problem of
rack renting and shortage of accommodation. It is in
consonance with the recognition of the right of both the
landlord and the ten- and that a harmony is sought to be struck
whereby the bona- fide requirements of the landlords and the
tenants in the expanding explosion of need and population and
shortage of accommodation are sought to be harmonised and
the conditions imposed to evict a tenant are that the landlord
must have bona fide need. That is satisfied in this case. That
position is not disputed. The second condition is that landlord
should not have in his or her possession any other reasonably
suitable accommodation. This does not violate either Article 14
or Article 21 of the Constitution. Shri Kacker submitted that
this section should to read literally and we should ask ourselves
the question today whether can it be said that the landlady had
reasonably suitable other accommodation. We are unable to
read it in that sense. If the landlady or the landlord could have
reasonable accommodation after his or her need arose and she
by her own conduct disentitled herself to that property by
letting it out for higher income, she would be disentitled to evict
her tenant on ground of her need. The philosophy and principle
of rent restriction law have nothing to do with the private
exploitation of property by the owners of the property in
derogation of the tenant's need of protection from eviction in a
society of shortage of accommodation.
In the premises we are of the opinion that the High Court was
wrong in the view and the approach it took and in view of the
undisputed facts that the landlady had in her choice to go into
the premises in question but she did not, she has become
disentitled to the right of eviction. The fact that the tenant was a
troublesome tenant inasmuch as that he questioned the liability
to the landlord is irrelevant."
43. In Satyawati Sharma (supra), the Supreme Court held that the existing
Section 14 (1) (e) could not stand the scrutiny of Article 14 and therefore,
"read it down" to enable a fair resolution; the relevant discussion is as
follows:
"8. In view of the above discussion, we hold that Section 14 (1)
(e) of the 1958 Act is violative of the doctrine of equality
embodied in Article 14 of the Constitution of India insofar as it
discriminates between the premises let for residential and non-
residential purposes when the same are required bona fide by
the landlord for occupation for himself or for any member of
his family dependent on him and restricts the latter's right to
seek eviction of the tenant from the premises let for residential
purposes only.
39. However, the aforesaid declaration should not be
misunderstood as total striking down of Section 14 (1) (e) of
the 1958 Act because it is neither the pleaded case of the
parties nor the learned counsel argued that Section 14 (1)
(e) is unconstitutional in its entirety and we feel that ends of
justice will be met by striking down the discriminatory portion
of Section 14 (1) (e) so that the remaining part thereof may
read as under :-
"that the premises are required bona fide by the landlord for
himself or for any member of his family dependent on him, if he
is the owner thereof, or for any person for whose benefit the
premises are held and that the landlord or such person has no
other reasonably suitable accommodation."
While adopting this course, we have kept in view well
recognized rule that if the offending portion of a statute can be
severed without doing violence to the remaining part thereof,
then such a course is permissible R.M. D. Chamarbaugwalla v
Union of India (AIR 1957 SC 628) and Bhawani Singh v State
of Rajasthan [1996 (3) SCC 105]. As a sequel to the above, the
explanation appearing below Section 14 (1) (e) of the 1958
Act will have to be treated as redundant."
44. The combined effect of Satyawati Sharma (supra) and Raghunandan
Saran (supra) is that the constraints and restrictive conditions for rent
increase, on account of Sections 4 to 6 of the original enactment, are
inapplicable; also, a landlady (or landlord) can, on establishing bona fide
need, secure eviction orders for all classes of premises: residential and
commercial. The question then is, whether the classification that survives-
firstly between non-Government premises and government owned premises
and secondly between premises that yield more than three thousand five
hundred rupees monthly and those that are rented for less than that amount,
are discriminatory and unreasonable.
45. As far as the classification between Government owned premises and
those that are not so owned is concerned, it is interesting to note that after
D.C Bhatia (supra), a similar effort, through a statutory notification, fixing a
ceiling on the rental threshold at `1500/- per month, for applicability of the
local law, was challenged by tenants in Vasu Dev Singh v Union of India
2006 (12) SCC 753. The court held that such threshold for protection was
not rational, as it was based on insufficient data. Interestingly, the court
noticed that before introduction of the amendment the executive had not
collected sufficient material, whereas in D.C. Bhatia (supra), the concerned
report had suggested `1500/- as the limit for applicability of rent control
law; however, after deliberation, that limit was revised to `3500/- per month.
46. Time and again, the courts have stressed that rent legislation: be it in
respect of control of premises for letting, or in regard to fixation of standard
rent, are aimed at general social welfare- and conversely, at eliminating the
baneful effect of laissez faire in the field of leasing and letting out of
premises in providing some measure of social control and protecting tenants.
Even Malpe Vishwanath Acharya (supra), contained that statement:
"In so far as social legislation, like the Rent Control Act is
concerned, the law must strike a balance between rival interest
and it should try to be just to all. The law ought to be unjust to
one and give a disproportionate benefit or protection to another
section of the society. When there is shortage of
accommodation it is desirable, nay, necessary that some
protection should be given to the tenants in order to ensure that
they are not exploited. At the same time such a law has to be
revised periodically so as to ensure that a disproportionately
larger benefit than the one which has intended is not given to
the tenants. It is not as if the Government does not take
remedial measures to try and offset the effects of inflation. In
order to provide fair wage to the salaried employees the
Government provides for payment of dearness and other
allowances from time-to-time. Surprisingly this principle is lost
sight of while providing for increase in the standard rent--the
increase made even in 1987 are not adequate, fair or just and
the provisions continue to be arbitrary in today's context.
When enacting socially progressive legislation the need is
greater to approach the problem from a holistic perspective
and not have a narrow or short sighted parochial approach.
Giving a greater than due emphasis to a vocal section of society
results not merely in the miscarriage of justice but in the
abdication of responsibility of the Legislative Authority. Social
legislation is treated with deference by the Courts not merely
because the Legislature represents the people but also because
in representing them the entire spectrum of views is expected to
be taken into account. The Legislature is no shackled by the
same constraints as the Courts of Law. But its power is coupled
with a responsibility. It is also the responsibility of the Courts
to look at legislation from the alter of Article 14 of the
Constitution. This Article is intended, as is obvious from its
words, to check this tenancy, giving undue preference to some
over others."
47. In M/s Rahabhar Productions Pvt. Ltd. v. Rajendra K. Tandon (1998)
4 SCC 49 the Supreme Court held that provisions of the rent law must be
construed harmoniously so as to balance the rights and obligations of the
tenant and the landlord; yet the courts cannot be unmindful of the fact that
the legislative object of the law continues to be to curb the tendency of the
landlords to evict the tenants on one pretext or the other so that the former
can rent out the premises at a higher rate of rent. The court observed:
"..The Act which was brought on the Statute book in 1958 is a
composite legislation in the sense that while providing
protection to the tenants who, under common law, including
Transfer of Property Act, could be evicted from the premises let
out to them, at any time by the landlord on the termination of
their tenancy, it restricts the right of the landlords to evict the
tenants at their will. The Act is thus beneficial as also
restrictive in nature. The Courts are, therefore, under a legal
compulsion to harmoniously read the provisions of the Act so
as to balance the rights of the landlord and the obligations of
the tenant towards each other keeping in mind that one of the
objects of the legislature while enacting the Act was to curb the
tendency of the greedy landlords to throw out the tenants,
paying lower rent, in the name of personal occupation and rent
out the premises at the market rate..."
Again, in Dina Nath Saini v Subhash Chand Saini 2014 (11) SCC 20, the
Supreme Court, while interpreting provisions of the DRC Act, and after
noticing Rahabhar Productions (supra) stated as follows:
"7. There is thus no gainsaying that while legislative
intervention has tried to moderate the law with a view to
restoring the balance between the rights and obligations of the
landlords on the one hand and the tenants on the other, the
spirit and purpose underlying the rent legislation continues to
be to protect the tenants against arbitrary and unfair demands
for eviction or enhancement of rents. The pendulum has
undoubtedly swung in favour of the landlords not only by
reason of these amendments to the rent legislation which were
perceived to be halting house-building activity and leading to a
visible reluctance among the owners to let out the available
accommodation for fear of losing the same altogether. Judicial
pronouncements have also liberalized the approach to be
adopted qua the landlord's prayer for eviction when such
eviction is sought on the ground of bonafide personal need of
the landlord. Decisions of this Court in Mst. Bega Begum and
Ors. v. Abdul Ahad Khan (Dead) by LRs. and Ors. (1979) 1
SCC 273, M/s Central Tobacoo Co. Bangalore v. Chandra
Pakash 1969 (2) UJ 432 and Phiroze Bamanji Desai v.
Chandrakant N. Patel and Ors. 1974 (1) SCC 661, interpreted
the Rent Control legislation rather narrowly placing a
relatively heavier burden on the landlords in cases where
vacation of the tenants was sought on the ground of bona fide
personal requirement of the former. Recent decisions have
made a significant departure from that approach. In Mohd.
Ayub and Anr. v. Mukesh Chand (2012) 2 SCC 155 this Court
observed that the landlord's requirement need not be one of
dire necessity. So long as the need was bona fide, the mere
affluence of the landlord would not be a ground to reject his
application for eviction. To the same effect is the decision of
this Court in Bhimanagouda Basanagouda Patil v. Mohd.
Gudusaheb (2003) 3 SCC 101.
8. The noticeable shift in the approach adopted towards
eviction matters based on personal bona fide requirement does
not, however, necessarily cascade into a similar approach
towards grounds other than personal requirement, especially
where the default in the payment of rent is set up as a ground
for eviction. In such cases, the Courts will have to adopt a
relatively liberal approach towards the tenant. Just because
there is a default in payment of rent may not necessarily result
in an order of eviction unless the statute clearly or
unequivocally so mandates."
48. The reasoning of the Supreme Court in D.C. Bhatia (supra) which
upheld the classification of premises (`3500/- rent or more on the one hand
and those yielding less rents on the other) is as follows:
"47. In the instant case, the classification has been made on the
basis of the rent payable on the premises. A person, who can
afford to pay more than Rs. 42,000/- a year by way of rent will
be, by any standard, an affluent person in our society. He
cannot be said to belong to the weaker section of the
community. The argument that the rent payable for any
building in Delhi is very high and, therefore, Rs. 3,500/- per
month is comparatively a low figure of rent, overlooks the fact
that the Rent Act was passed initially to save the weaker
section of the people from arbitrary and sudden enhancement of
rent and also from eviction. If the argument advanced on behalf
of the appellants is to be upheld, then it will have to be held that
the people, who can afford to pay rent at the rate of more than
Rs. 3,500/- per month, belong to the economically weaker
section of the community and must also be protected. It was
argued on behalf of the respondents that if a man is paying
more than Rs. 42,000/- per year by way of rent, then his annual
income should be at least Rs. 1,50,000/- per annum. Having
regard to the average income of the people in India, such a
person cannot be treated as an economically handicapped
person. There is considerable force in this argument advanced
on behalf of the respondents.
48. However, we need not go too deeply into this aspect of the
controversy, as in our opinion, it is for the Legislature to decide
whether or not any section of the people should be protected in
any way by law. For this purpose, the Legislature can identify
the section of the people who needs protection and decide how
the classification will be done or what will be the cut-off point
for the purpose of making such classification. The classification
may be done on income basis or rental basis or some other
basis. The Court can only consider whether the classification
has been done on an understandable basis having regard to the
object of the statute. The Court will not question its validity on
the ground of lake of legislative wisdom.
49. Moreover, the classification cannot be done with
mathematical precision. The Legislature must have
considerable latitude for making the classification having
regard to the surrounding circumstances and facts. The Court
cannot act as a super-legislature and decide whether cut-off
point for the classification on the basis of monthly rent should
be Rs. 3,500/- or Rs. 4,000/- or Rs. 5,000/-. If the classification
is totally irrational and has no nexus with the object sought to
be achieved by the statute, then only will the Court strike down
such classification.
50. In the facts of this case, we are not persuaded to hold that
the impugned Section 3 (c) of the Delhi Rent Control Act
violates Article 14 of the Constitution in any manner.
51. The next point relates to interpretation of Section 3 (c) of
the Delhi Rent Control Act. It was urged that the Delhi Rent
Control (Amendment ) Act came into force on 1.12.1988. The
effect of Section 3 (c) which was introduced by the Amendment
Act was to remove those premises whose monthly rent
exceeded Rs. 3,500/- from the ambit of the Section 3 (c) of the
Delhi Rent Control Act. This amendment of the Rent Control
Act would not apply to those tenancies which were created
prior to 1.12.1988. It was argued that the Amendment Act has
not been specifically made retrospective. Therefore, it could not
affect the rights acquired by the tenants under the Rent Control
Act before its amendment in 1988. Under the existing law, the
tenants had acquired valuable property rights. The landlord
could neither evict the tenant nor enhance the rent at will. A
suit could not be brought against a tenant on the ground of
expiry of the lease, whether a lease was for a fixed term, year to
year or month to month, on the ground of expiration of period
of lease. Filing of such suit was barred by virtue of Section
14 of the Rent Act. Some of the tenants who could afford to
build did not build houses of their own because of the
protection provided by the provisions of the Rent Act . Had
these provisions not been there, these tenants or lessees might
have built houses of their own or purchased properties
elsewhere. These vested rights could not be disturbed unless the
Amendment Act contained specific provisions to that effect.
52. We are unable to uphold this contention for a number of
reasons. Prior to the enactment of the Rent Control Act by the
various State Legislatures, the legal relationship between the
landlord and tenant was governed by the provisions of the
Transfer of Property Act. Delhi Rent Control Act provided
protection to the tenants from drastic enhancement of rent by
the landlord as well as eviction, except on certain specific
grounds. The Legislature by the Amendment Act No. 57 of 1988
has partially repealed the Section 3 (c) of the Delhi Rent
Control Act. This is a case of express repeal. By Amending
Act the Legislature has withdrawn the protection hitherto
enjoyed by the tenants who were paying Rs. 3,500/- or above as
monthly rent. If the tenants were sought to be evicted prior to
the amendment of the Act, they could have taken advantage of
the provisions of the Act to resist such eviction by the landlord.
But this was nothing more than a right to take advantage of the
enactment The tenant enjoyed statutory protection as long as
the statute remained in force and was applicable to him. If the
statute ceases to be operative, the tenant cannot claim to
continue to have the old statutory protection. It was observed
by Tindal, C.J., in the case of Kay v. Goodwin (1830) 6 Bing.
576, 582:
The effect of repealing a statute is to obliterate it as completely
from the records of the Parliament as if it had never been
passed; and it must be considered as a law that never existed
except for the purpose of those actions which were commenced,
prosecuted and concluded whilst it was an existing law.
53. The provisions of a repealed statute cannot be relied upon
after it has been repealed. But, what has been acquired under
the Repealed Act cannot be disturbed. But, if any new or further
step is needed to be taken under the Act, that cannot be taken
even after the Act is repealed.
54. In the case of Kewal Singh v Smt. Lajwanti (1981) 1 SCC
290, vires of Section 25B of the Delhi Rent Control Act was
challenged. Section 25B was inserted to provide the landlord
with a speedy remedy of eviction in case of bona fide necessity
of the landlord. A contention was raised on behalf of the
tenants that the provisions of Section 25B violated Article 14 of
the Constitution. Fazal Ali, J., speaking on behalf of the Court,
repelled this argument by observing:
"Thus any right that the tenant possessed after the expiry
of the lease was conferred on him only by virtue of the
Rent Control Act. It is, therefore, manifest that if the
legislature considered in its wisdom to confer certain
rights or facilities on the tenants, it could due to changed
circumstances curtail, modify, alter or even take away
such rights or the procedure enacted for the purpose of
eviction and leave the tenants to seek their remedy under
the common law."
55. In the instant case, the Legislature has decided to curtail or
take away the protection of the Delhi Rent Control Act from a
section of the tenants. The tenants had not acquired any vested
right under the Delhi Rent Control Act, but had a right to take
advantage of the provisions of the repealed Act so long as that
law remained in force."
49. The petitioners‟ grievances are that despite the amendment, several
anomalies exist in the rent control law, which operate harshly and
unreasonably against the landlords. One of the acutest complaints is that old
tenancies, typically yield less than `3500/- and that Parliamentary
assumption that this class of tenants need protection the most, is unfounded.
Some examples cited by the petitioners are old tenancies of insurance and
banking companies, which are cash rich and do not need the protection of
rent laws. It is also urged that large public sector corporations, which do not
deserve any protection, but can comfortably negotiate good rental bargains,
are undeservedly and unreasonably the beneficiaries of such laws. It is urged
also that those who deserve protection are outside the pale of law, as they
live in unauthorized colonies or unauthorized premises.
50. As was noticed earlier, the response of courts to rent control
legislation has been balanced; as on date there is no perceived "tilt" towards
any particular class. The courts now recognize that there are amongst
landlords "weaker sections" too. This sensitivity, in the opinion of the court
is removed from the earlier understanding that all tenants as a class are
oppressed and need protection. Further, the courts‟ response to standard rent
provisions too has uniformly been in keeping with the times; whenever they
felt that laws unduly constrain choices and are therefore, unreasonable, the
declaration that they are ultra vires or unreasonable has been forthcoming.
For Delhi, the amending Act and the reasoning in D.C. Bhatia (supra),
generally supportive of it, as well as the "reading down" exercise performed
in Satyawati Sharma (supra), have breathed fresh air into the DRC Act;
coupled with the declaration in Raghunandan Saran (supra) the provisions
are not as restrictive as they were originally. Furthermore, Section 25B of
the DRC Act now enacts a special procedure for obtaining eviction in regard
to certain grounds: the procedure is akin to the summary procedure under
Order 37 of the Code of Civil Procedure. This court is also cognizant of the
fact that as on date about 14 courts exercise jurisdiction under the DRC Act
(as Rent Controller/Additional Rent Controller): far greater in number than a
decade ago, when there were only a few judicial officers.
51. In terms of a recent study of housing and urban development
contained in the economic survey of Delhi 2016-17, low income settlements
were steadily increasing over a period of 55 years. Such low income
settlements accommodated 6.75 million of the total 9 million residents of
Delhi NCT. The survey also showed that majority of such dwellings are sub-
standard housings, including 695 slum settlements and other jhuggi jhopri
clusters and 1797 unauthorised colonies. The survey noted that by 2021,
Delhi needs 24 lakh new housing units to provide proper homes for all its
residents. If one looks at these figures and keeps in the background the
legislative change that occurred to the DRC Act, on the one hand, and the
changes consequent to Court‟s interpretation, it is apparent that the "reality
check" which the petitioners urge is far from it. Whilst it is perhaps true that
several tenants do not deserve protection of a beneficial legislation - which
owe its origin as a temporary measure, to address best, what were housing
security, the fact remains that the housing situation is far from ideal even
today. Whilst the petitioners may be at the receiving end, in the sense that
they are landlords/landladies, of commercial tenancies and therefore, unable
to establish need for all the premises that they own, surely that ipso facto
cannot surely outweigh that consideration; i.e. that the landlords need to
carry on the occupation or business of making a living out of rents and
cannot outweigh all other considerations which underlie the objective of
DRC Act. Those objectives, i.e. protection of a section (which apparently
continues to be a large section of the population) from the depradations of
unscrupulous landlords, still has relevance. Without the protection of rent
legislations, the weakest section of the society to whom the DRC Act still
has relevance, may well face a daily threat of eviction. That some of them
are vacated outside the framework of the law (through strongarm tactics or
extra legal force) is not a ground for ignoring that if they choose to approach
the Court, the law does afford protection. In this context, it is useful to again
iterate that the abuse of law is not a ground for its unconstitutionality.
Equally, that it cannot be taken recourse to by some who deserved its benefit
cannot be a ground for ignoring the protection it gives.
52. For the above reasons, the Court is of the opinion that the charge of
unreasonableness and discrimination with respect to the amendment of
Section 3(c) and the general challenge to the DRC Act inasmuch as it
restricts the landlords‟ right to protect their business or occupation or derive
any income through rents has to fail. Turning now to the other challenge
with respect to the classification based upon ownership of the premises
(government owned) falling outside the DRC Act, whereas those yielding
less than `3500 per month falling within its scope, the Court is of the view
that this challenge too is unfounded. So far as the government property or
premises owned by the government are concerned, the availability of another
remedy through Parliament legislation (Public premises (Eviction of
Unauthorised Occupants Act, 1971), cannot per se be a ground for holding
that in the context of a somewhat similar challenge - to the overriding
challenge to the Public Premises Act, the Supreme Court, in its Constitution
Bench decision in Ashoka Marketing Private Limited v. PNB AIR 1991 SC
855 held as follows:‟
"...............The principle which emerges from these decisions
is that in the case of inconsistency between the provisions of
two enactments, both of which can be regarded as Special in
nature, the conflict has to be resolved by reference to the
purpose and policy underlying the two enactments and the clear
intendment conveyed by the language of the relevant provisions
therein. We propose to consider this matter in the light of this
principle.
The statement of objects and reasons for the enactment of
the Rent Control Act, indicates that it has been enacted with a
view:
(a) to devise a suitable machinery for expeditious adjudication
of proceedings between landlords and tenants;
(b) to provide for the determination of the standard rent
payable by tenants of the various categories of premises which
should be fair to the tenants, and at the same time, provide
incentive for keeping the existing houses in good repairs, and
for further investment in house construction; and
(c) to give tenants a larger measure of protection against
eviction.
This indicates that the object underlying the Rent Control Act is
to make provision for expeditious adjudication of disputes
between landlords and tenants, determination of standard rent
payable by tenants and giving protection against eviction to
tenants. The premises belonging to the Government are
excluded from the ambit of the Rent Control Act which means
that the Act has been enacted primarily to regulate the private
relationship between landlords and tenants with a view to
confer certain benefits on the ten- ants and at the same time to
balance the interest of the landlords by providing for
expeditious adjudication of proceedings between landlords and
tenant. As mentioned earlier, the Public Premises Act has been
enacted with a view to provide for eviction of unauthorised
occupants from public premises. In the statement of objects and
reasons for this enactment reference has been made to the
judicial decisions whereby by the 1958 Act was declared as
unconstitutional and it has been mentioned: "The court
decisions, referred to above, have created serious difficulties
for the Government inasmuch as the proceedings taken by the
various Estate Officers appointed under the Act either for the
eviction of persons who are in unauthorised occupation of
public premises or for the recovery of rent or damages from
such persons stand null and void. It has become impossible for
Government to take expeditious action even inflagrant cases of
unauthorised occupation of public premises and recovery of
rent or damages for such unauthorised occupation. It is,
therefore, considered imperative to restore a speedy machinery
for the eviction of persons who are in unauthorised
occupation of public premises keeping in view at the same time
the necessity of complying with the provision of the Constitution
and the judicial pronouncements, referred to above." This
shows that the Public Premises Act has been enacted to deal
with the mischief of rampant unauthorised occupation of public
premises by providing a speedy machinery for the eviction of
persons in unauthorised occupation. In order to secure this
object the said Act prescribes the time period for the various
steps which are enquired to be taken for securing eviction of the
persons in unauthorised occupation.. The object underlying the
enactment is to safeguard public interest by making available
for public use premises belonging to Central Government,
Companies in which the Central Government has substantial
interest, Corporations owned or controlled by the Central
Government and certain autonomous bodies and to prevent
misuse of such premises.
It would thus appear that, while the Rent Control Act is
intended to deal with the general relationship of landlords and
tenants in respect of premises other than government premises,
the Public Premises Act is intended to deal with speedy
recovery of possession of premises of public nature, i.e.
property belonging to the Central Government, or Companies
in which the Central Government has substantial interest or
Corporations owned or controlled by the Central Government
and certain corporations, institutions, autonomous bodies and
local authorities. The effect of giving overriding effect to the
provisions of the Pubic Premises Act over the Rent Control Act,
would be that buildings belonging to Companies Corporations
and Autonomous bodies referred to in Section 2(e) of the Public
Premises Act would be excluded from the ambit of the Rent
Control Act in the same manner as properties belonging to the
Central Government. The reason underlying the exclusion of
property be- longing to the Government from the ambit of the
Rent Control Act, is that Government while dealing with the
citizens in respect of property belonging to it would not act for
its own purpose as a private landlord but would act in public
interest. What can be said with regard to Government in
relation to property belonging to it can also be said with regard
to companies, corporations and other statutory bodies
mentioned in Section 2(e) of the Public Premises Act. In our
opinion, therefore, keeping in view the object and purpose
underlying both the enactments viz., the Rent Control Act and
the Public Premises Act, the provisions of the Public Premises
Act have to be construed as overriding the provisions contained
in the Rent Control Act.
As regards the non obstante clauses contained in Sections 14
and 22 and the provisions contained in Sections 50 and 54 of
the Rent Control Act, it may be stated that Parliament was
aware of these provisions when it enacted the Public Premises
Act contained a specific provision in Section 15 barring
jurisdiction of all courts (which would include the Rent
Controller under the Rent Control Act). This indicates that
Parliament intended that the provisions of the Public Premises
Act would prevail over the provisions of the Rent Control Act
inspite of the above mentioned provisions contained in the Rent
Control Act. It has been urged by the learned counsel for the
petitioner that there is no conflict between the provisions of the
Rent Control Act and the Public Premises Act and that both the
provisions can be given effect to without one overriding the
other. In this regard, it has been pointed out that since no
provisions has been made in the Public Premises Act for the
termination of the lease, the provisions of the Rent Control Act
can be held applicable upto the stage of termination of the
lease, and thereafter, proceedings can be initiated for eviction
under the provisions of the Public Premises Act. In support of
this submission, reliance has been placed on Dhanpal
Chettiar's case (supra), wherein it has been held that in view of
the special provisions contained in the State Rent Control Acts,
it is no longer necessary to issue a notice under Section 106 of
the Transfer of Property Act to terminate the tenancy because
inspite of the said notice the tenant is entitled to continue in
occupation by virtue of the provisions of the said Acts. In the
said case, it has been further laid down that the relationship
between the landlord and tenant continues till the passing of the
order of eviction in accordance with the provisions of the Rent
act, and therefore, for the eviction of the tenant in accordance
with the law, an order of the competent Court under the Rent
Control Act is necessary. This would mean that in order to evict
a person who is continuing in occupation after the expiration or
termination of his contractual tenancy in accordance with law,
two proceedings will have to be initiated. First, there will be
proceedings under Rent Control Act before the Rent Controller
followed by appeal before the Rent Control Tribunal and
revision before the High Court. After these proceedings have
ended they would be followed by proceedings under the Public
Premises Act, before the Estate Officer and the Appellate
Authority. In other words, persons in occupation of public
premises would receive greater protection than tenants in
premises owned by private persons. It could not be the intention
of Parliament to confer this dual benefit on persons in
occupation of public premises."
53. Earlier in another judgment - Northern India Caterers v. State of
Punjab AIR 1967 SC 1581, it was held that providing a different remedy to
the government is a class for eviction from its premises was discriminatory.
This decision (of 5 Judges) was overruled subsequently in Magan Lal
Chhagan Lal Private Limited v. Municipal Corporation of Greater Bombay
and Ors. AIR 1974 SC 209 as follows:
"To summarise:
Where a statute providing for a more drastic procedure
different from the ordinary procedure covers the whole field
covered by the ordinary procedure, as in Anwar Ali Sarkar's
case and Suraj Mall Mehta's case without any guidelines as to
the class of cases in which either procedure is to be resorted to,
the statute will be hit by Article 14. Even there, as mentioned in
Suraj Mall Mehta's ease, a provision for appeal may cure the
defect. Further, in such cases if from the preamble and
surrounding circumstances, as well as the provisions of the
statute themselves explained and amplified by affidavits,
necessary guidelines could be inferred as in Saurashtra case
and Jyoti Pershad's case the statute will not be hit by Art. 14.
Then again where tile statute itself covers only a class of cases
as in Haldar's cave and Bajoria's case the statute will not be
bad. The fact that in such cases the executive will choose which
cases are to be tried under the special procedure will not affect
the validity of the statute. Therefore, the contention that the
mere availability of two procedures will vitiate one of them,
that is the special procedure, is not supported by reason or
authority.
The statute itself in the two classes of cases before us clearly
lays down the purpose behind them, that is premises belonging
to the Corporation and the Government should be subject to
speedy procedure in the matter of evicting unauthorized
persons occupying them. This is a sufficient guidance for the
authorities on whom the power has been conferred. With such
an indication clearly given in the statutes one expects the
officers concerned to avail themselves of the procedures
prescribed by the Acts and not resort to the dilatory procedure
of the ordinary Civil Court. Even normally one cannot imagine
an officer having the choice of two procedures, one which
enables him to get possession of the property quickly and the
other which would be a prolonged one, to resort to the latter.
Administrative officers, no less than the courts, do not function
in a vacuum. It would be extremely unreal to hold that an
administrative officer would in taking proceedings for eviction
of unauthorised occupants of Government property or
Municipal property resort to the procedure prescribed by the
two Acts. in one case and to the ordinary Civil Court in the
other. The provisions of these two Acts cannot be struck down
on the fanciful theory that power would be exercised in such an
unrealistic fashion. In considering whether the officers would
be discriminating between one set of persons and another, one
has got to take into account normal human behaviour and not
behaviour which is abnormal. It is not every fancied possibility
of discrimination but the real risk of discrimination that we
must take into account. This is not one of those cases where
discrimination is writ large on the face of the statute.
Discrimination may be possible but is very improbable. And if
there is discrimination in actual practice this Court is not
powerless. Furthermore, the fact that the Legislature
considered that the ordinary procedure is insufficient or
ineffective in evicting unauthorised occupants of Government
and Corporation property and provided a special speedy
procedure therefore is a clear guidance for the authorities
charged with the duty of evicting unauthorised occupants. We,
therefore, find ourselves unable to agree with the majority in
the Northern India Caterers' case'.
We should add that the basis of that decision is that section 5 of
the Act enables the Collector to discriminate against some by
exercising his power under section 5 and take proceedings by
way of suit against others. In proceeding on that basis the
majority made an obvious mistake. Under section 4 of the Act
'if the Collector is of opinion that any person is in unauthorised
occupation of- any public Premises and that he has to be
evicted he shall issue a notice in writing calling upon such
person to show cause why an order of eviction should not be
passed'. Thus the Collector has no option at all but to issue a
notice. But after considering the cause and the evidence
produced by such person and after giving him a reasonable
opportunity of being heard. he may make an order of eviction.
Therefore, if he is of opinion that it is a case where, a suit is a
more proper remedy because, of the circumstances of the case
or its complicated nature he may not order eviction. Then it
would be for the Government to institute a suit. It is not for the
Collector to do so. The Collector has no discretion either to file
a suit or to take proceedings under the Act. Nor can the
Government order the Collector to pass an order of eviction in
every case under section 5 as the power under that section is
the Collector's statutory-power. Thus, the majority, in ignoring
the obligatory nature of the, notice under section 4 and the
discretionary power under section 5 which has to be exercised
after hearing the party was in error in proceeding on the basis
of section 5 alone and holding that it conferred arbitrary power
on the Collector to resort to the power under the Act in the case
of some and a suit in the case of some others. It is also
necessary to point out that the procedures laid down by the two
Acts now under consideration are not so harsh or onerous as to
suggest that a discrimination would result if resort is made to
the provisions of these two Acts in some cases and to the
ordinary Civil Court in other cases. Even though the officers
deciding these questions would be administrative officers there
is provision in these Acts for giving notice to the: party
affected, to inform him of the grounds on which the order of
eviction is proposed to be made, for the party affected to file a
written statement and Produce documents and be represented
by lawyers. The provisions of the Civil Procedure Code
regarding summoning and enforcing attendance of persons and
examining them on oath, and requiring the discovery and
production of documents are a valuable safeguard-for the
person affected. So is the provision for appeal to the Principal
Judge of the City Civil Court in the city of Bombay, or to' a
District Judge in the districts who has got to deal with the
matter as expeditiously as possible, also a sufficient safeguard
as was recognised in Suraj Mall Mehta's case. The main
difference between the procedure before an ordinary Civil
Court and the executive authorities under these two Acts is that
in one case it will be decided by a judicial officer trained in law
and it might also be that more than one appeal- is available. As
against that there is only one appeal available in the other but
it is also open to the aggrieved party to resort to the High Court
under the provisions of Art. 226 and Art. 227 of the
Constitution. This is no less effective than the provision for a
second appeal. On the whole, considering the object with which
these special procedures were enacted by the legislature we
would not be prepared to hold that the difference between the
two procedures is so unconscionable as to attract the vice of
discrimination. After all, Art. 14 does not demand a fanatical
approach. We, therefore, hold that neither the provisions of
Chapter V-A of the Bombay Municipal Corporation Act nor the
provisions of the Bombay Government Premises (Eviction) Act,
1955 are hit by Art. 14 of the Constitution."
54. It is therefore evident that the government and its premises have
always been treated as a separate class; exclusion of premises owned by the
government to enable it to obtain speedily and in public interest its premises,
and evict the tenants who occupy it, therefore, does not result in
discrimination or arbitrariness.
55. As far as the petition with respect to ground under Section 14(1)(d),
i.e. if the tenant or his family has not been residing in the premises for 6
months immediately prior to the filing of the eviction proceeding is
concerned, the argument is that 6 months period is undoubtedly long and
therefore, unreasonable. In this regard, the Court is of the opinion that this
provision is meant to balance the rights of both landlord and tenant. The
intention of a period of 6 months is a legislative choice of what the law
deems to be a reasonable period for a tenant to move in and use the tenanted
premises. This ground is separate from the case of non-payment of rent.
Thus, if the tenant concerned consistently pays the rent and does not fall into
arrears and yet does not move in for reasons best known, nevertheless, the
outer limit for keeping the premises vacant is 6 months. Like in the case of
cut off dates, there could possibly be an argument with respect to
arbitrariness; at the same time, whether a reasonable period is 3 months
(which would clearly favour the landlord or one year in which event it would
be more favourable to the tenant) is a decision that is ultimately be taken by
the concerned legislature - in this case, the Parliament. The mere fact that a
six month period can operate unfairly in some given cases, is not a ground
for its being characterised as arbitrary or unreasonable.
56. As regards the challenge to Section 50(1) goes, it is evident that the
bar of civil Court is only with respect to matters that concerned standard
rent. With respect to other issues, i.e. eviction of tenants on enumerated
grounds for which they are protected, the jurisdiction of the tribunal is
exclusive. Therefore, in the light of the decision in Raghunandan Saran
(supra), the challenge to Section 50 to this Court‟s mind without any
foundational facts is rendered academic. It is also worthwhile noting in this
context that Section 6A to the extent it is on the statute books survives
inasmuch as it enables enhancement of rent sans the concept of standard
rent, to the extent of 10% every three years. The Court, therefore, is unable
to hold the challenge to Section 50, and is of the opinion that it cannot be
countenanced. For the foregoing reasons, it is held that the challenge to the
various provisions of the DRC act, especially Sections 3, 14 and 50 are not
merited.
57. In view of the foregoing, the writ petitions fail. The reference to this
Bench in CS (OS) 3518/2012 too is answered in terms of the above reasons.
List CS(OS) 3518/2012 before the roster Bench on 04.02.2019. The writ
petitions are, therefore, dismissed without order on costs.
S. RAVINDRA BHAT
(JUDGE)
A.K. CHAWLA
(JUDGE)
JANUARY 07, 2019
