Revision as of 19:28, 6 May 2017

Delhi Rent Control Act

Stillborn rent act headed for burial Owners worried, no clarity yet on focus of new law

Abhinav Garg & Dipak Kumar Dash TNN

The Times of India 2013/07/06

New Delhi: After 18 years in the mortuary, a politically sensitive property act is being given a quiet burial in the run-up to the Delhi assembly elections. The Centre’s move to repeal the amended Delhi Rent Act of 1995 has shattered the hopes of thousands of landlords who have properties in prime commercial areas such as Connaught Place, Karol Bagh, Paharganj and the Walled City.

Although the urban development(UD) ministry plans to introduce a fresh law, there is no clarity on its focus, intent and timeframe for introduction. The proposal to repeal the 1995 act was on the cabinet agenda last Wednesday but was withdrawn. It will be placed before the cabinet again soon, sources say.

The 1995 act would have replaced the archaic law of 1958 that protected the migrant population from arbitrary rent hikes by wealthy landlords. Although it served tenants well, the law became a tool to harass landlords over the next four decades. Even as property values skyrocketed, landlords bound by rent control rules continued to get paltry rents. The 1995 act was passed by both houses of parliament and received presidential assent, but after street protestsby tenantsthe government lost the will to notify it.

Sources said a proposal to repeal the 1995 law-in-waiting was moved aroundsix months ago after urban development minister Kamal Nath asked his officials to start work on a fresh law. “Until we withdraw the existing act, we can’t officially undertake the fresh task. Once the consultation process starts we can come to know what the shape of the new law will be,” said a ministry official.

Landlords are angry and say the government is delaying justice to appease the electorally significant tenant constituency. They term the 1958 act “unconstitutional” and have been fighting a casein the high court since 2010.

The UD ministry, which is supposed to push other states to undertake rent control law reform, is itself moving in the opposite direction, says Sobha Aggarwal, president, Committee for the Repeal of Delhi Rent Control Act. “Instead of notifying the Delhi Rent Act (DRC), 1995, which was passed by parliament, the government is repealing it. Since the implementing agency is itself violating the policy, it is not surprising that hardly any state has undertaken rent control law reform.” She alleges that the tenant-trader lobby in Delhi has compelled the government to “subvert” the policy, reform process and subsequent court orders.

In the absence of any legislation to remedy the situation, the courts led by the Supreme Courthave providedsomesuccor. They have allowed landlords to invoke “need” to get even commercial properties vacated. The DRC act remains the last defence available to tenants.

Property owners point out the1958 acthas no mechanism to bring the historical rent to the present market rate and gives a tenant the luxury to pay less than Rs 3,500 per month in perpetuity. The law clearly states that all those paying less than this amount will be protected. An amendment in 1988, though, allowed landlords to increase rent by 10% every three years. In effect, Aggarwal says, a tenant who was paying Rs 10 as rent in 1988 would hit the Rs 3,500 ceiling after 184 years. Even somebody paying Rs 1,000 in 1988 would cross the mark in 2027.

Rent Control Act, Delhi

History

From the archives of The Times of India 2007, 2009

LOW RETURNS

Delhi Rent Control Act, 1958 came into force in 1959 to check rent escalation and eviction of tenants in certain parts of Delhi, including places like Connaught Place, Chandni Chowk, Karol Bagh and South Extension

The Act is applicable to properties rented below Rs 3,500 per month These properties, worth crores in prime areas, fetch negligible returns, rents being as low as Rs 50 to Rs 150 In 1988, a provision to increase rents by 10% every three years was included in the Act In 1995, Delhi Rent Act was brought in to repeal the earlier law but was never notified due to resistance from traders and tenants In 1997, Delhi Rent (Amendment) Bill was referred to a Parliamentary Standing Committee. Though it submitted its proposals, which were accepted by the government, nothing happened A Supreme Court ruling last April relaxed norms for owners. It ruled that a tenant can be evicted if his landlord proves he needs the property for personal use Though the SC ruling is heavily tilted in favour of owners, they are still sceptical and not ready for another round of legal battles. But others have heaved a sigh of relief and finally hope to get back their properties

ZERO PROGRESS

1958 | Government brings Delhi Rent Control Act to protect tenants from arbitrary increase in rents

Makes eviction of tenants next to impossible. Tenants paying up to Rs 3,500 protected

1988 | Act amended to introduce 10% increase on base rental every 3 years

1995 | Major overhaul in law gives landlords more power to increase rent of property Outlines formula for rationalization of prevailing rental; links increase to inflation

The act was never notified after protests by tenants’ bodies despite assent from president

2013 | UD ministry decides to repeal 1995 act No clarity on focus of proposed alternative or deadline

Rent not paid

SC orders eviction

AmitAnand Choudhary , After 40-yr battle, man gets back shop he let out for Rs 30, April 16, 2017: The Times of India

The Supreme Court has come to the rescue of a man from Vadodara fighting to regain possession of a shop he had rented out in 1958 for a monthly rent of Rs 30. Anil Kumar Dhekle had to fight a legal battle for nearly 40 years: he first moved court in 1978 after the tenant defaulted on payment from 1974 to 1976.

The Supreme Court has directed the tenant to hand over possession of the shop in Vadodara within two months.Although the apex court sympathised with the shopowner for fighting such a protracted legal battle to get his property back, the court itself took 10 years to decide on his plea.

“It is unfortunate that the appellant-landlord is litiga ting for more than four decades to get back possession of his own premises and, therefore, the respondent-tenants are directed to hand over vacant possession of the premises immediately ,“ a bench of Justices Kurian Joseph and R Banumathi said. Dhekle received rent regularly till 1974 and after the tenant failed to pay till 1976, the landlord approached court, which passed an order in Dhekle's favour in 1981. But the district court set it aside in 1983. Thereafter, Dhekle approached the Gujarat high court the same year, which in 2003 upheld the district court's order and allowed the tenant to hold possession by paying monthly rent.

Granting him relief, the SC said, “The findings and the reasonings recorded by the high court are not based on evidence and cannot be sustained. As rightly held by the trial court, the tenants are liable to be evicted...The respondent or other person(s) are directed to hand over vacant possession within two months.“