In a relief to a big population living in or running their businesses from rented accommodations in the Capital, the Delhi High Court has restricted the landlords from arbitrarily increasing the rent.
The court has ruled that the landlords cannot increase the rents in line with inflation or cost price index. A division bench headed by acting Chief Justice AK Sikri maintained that the 10 per cent increase in rent every three years provided under the Delhi Rent Act may be perceived as inadequate, but that is no reason to provide for a higher or more frequent increase. The court’s observation came while dismissing a plea of a landlord seeking a direction to increase the monthly rent of his tenant from Rs 150 to Rs 10,000 per month, citing inflation as a reason.
“A landlord of a premises governed by the Delhi Rent Control Act, 1958 is entitled to have increase(s) in rent only in accordance with the rules and not otherwise. Such a landlord cannot approach the civil court contending that the rent stands increased or should be increased in accordance with the inflation or cost price index,” the bench also comprising Justice Rajiv Sahai Endlaw said. “Even though the 10 percent increase in rent every three years provided under the Delhi Rent Act may be perceived by some as inadequate, that is no reason for this court to provide for a higher or more frequent increase,” the judges said. The court refused to interfere with the existing rules, saying it was the duty of the legislature. “The same (amendment of rules) falls in legislative domain. This court cannot step into the shoes of the legislature,” the bench said.
Expressing its serious concerns over the practice of increasing rent for mere monetary profit, the court said it would result in reducing the Rent Control Legislation to a ‘dead letter’ and defeating its purpose. “Owing to the prohibition against eviction, the landlord is not entitled to evict the tenant, but is nevertheless entitled to recover profits…the same would result in reducing the Rent Control Legislation to a dead letter and defeating its purpose. The same cannot be permitted. Thus, in the absence of a provision in the statute, it cannot be held that a landlord is entitled to market rent from a protected tenant,” the court held.
“The Rent Control Legislations enacted in the pre-independence and immediately after independence era to prevent exploitation of tenants provided a statutory mechanism enabling a tenant to pay rent at a standard rate as fixed by the rent controller which was generally lower than the prevalent market rent. The rent agreed between the landlord and the tenant binds both of them and neither is entitled to unilaterally vary the same,” the judges said in the judgement.
According to Vaid, the petitioner, he had let out his property to one Uttam Chand in November 1987 at a monthly rental of Rs 150, but Chand has not been paying rent since July 2009 after it was increased to Rs 10,000 per month. He submitted that after taking into account inflation and fall in the value of rupee, the value of the rent of Rs 150 would not be less than Rs 10,000. He contended that even the Municipal Corporation of Delhi (MCD) has started claiming house tax on the basis of Unit Area System. The High Court, however, said that the rent could be increased by the landlord every three years by 10 per cent as per section 6 read with Section 8 of the Delhi Rent Act.
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