January 08, 2019:
On Monday, hopes of property owners saddled with prime land paying paltry rentals in the capital were dashed when Delhi HC dismissed their petition challenging the city’s “rent act” ceiling.
A bench of Justices S Ravindra Bhat and A K Chawla declined the plea of an association of landlords to set aside the Delhi Rent Control Act, 1958 as “unconstitutional” and left it to the legislature to take a call if the cap imposed on rentals under DRC Act needs a relook.
The judgment, whose detailed copy with reasons is awaited, came on petitions filed in 2010 challenging the Act.
Introduced over five decades ago, the Delhi Rent Control Act puts a ceiling on maximum rent that could be charged by landlords and has been criticized by land owners for its failure to align rentals with prevailing market rates.
The Act protects those paying less than ₹3,500 per month as rent, which can’t be increased beyond this ceiling.
Property owners, including advocate Shobha Aggarwal, had argued that despite owning huge buildings in prime areas like Connaught Place, Karol Bagh, Paharganj and the Walled City, they draw a pittance as rent, while the tenants prefer to contest lengthy eviction proceedings.
The petitioners claimed that the DRC Act is ultra vires the Constitution as it discriminates against landlords and violates Article 14, 19(1)(g) and 21 of the Constitution.
The last big change in the Act occurred in 1995 when the government brought in an amendment that was never notified, in effect killing the change.
In her petition, Aggarwal had argued that half the properties covered under the archaic law fetch a monthly rent less than even the daily minimum wage of unskilled worker earning as low as ₹353 per day.
The petitioners had highlighted that even as property values skyrocketed, landlords were forced into poverty because they could neither evict tenants nor increase the rent and instead had to pay higher property tax to the corporations as the latter revised the taxes.
The advocate had also sought a direction to the Govt. to compensate landlords for their economic losses, and emotional and psychological trauma suffered by them because of the Act.
But the Centre, through standing counsel Akshay Makhija, had opposed the PIL’s arguing that all these issues have been considered by various courts, including the Supreme Court, earlier and were dismissed.
The Govt. also maintained that there is no data cited by the landlords to substantiate their claim that the DRC Act has become archaic.
Property owners, including advocate Shobha Aggarwal, had argued that despite owning huge buildings in prime areas, they draw a pittance as rent while the tenants prefer to contest lengthy eviction proceedings.