While rent laws were enacted, mostly in the 1950s, by states to protect tenants, the Supreme Court has in a slew of recent cases displayed an increasingly favourable disposition towards landlords, helping them reclaim their commercial premises.
Consider the various ways in which SC this month liberally interpreted the expression "bona fide requirement", which is statutorily the only circumstance in which landlords can seek eviction of tenants from non-residential or commercial properties.
• On September 11, SC upheld the landlords' contention in Shamshad Ahmad vs Tilak Raj Bajaj that they were entitled to claim the benefit of bona fide requirement despite being wealthy and not running the proposed readymade garment business for which they had sought eviction of the tenant from their shop in Dehradun. Accordingly, SC rejected the tenant's plea of "comparative hardship" saying that the prospect of an increase in rent in a new location "would not preclude the landlords from getting possession of the shop once they had proved genuine need of the property".
• On September 15, the concept of bona fide requirement became even more expansive when SC ordered the tenant in K Puttaraju vs A Hanumegowda to shift out of his Bangalore shop although the landlord was already "in possession of reasonable, suitable accommodation as he is the owner of shopping malls and 10 other shops in the area in question." This is because the landlord claimed that he needed that particular shop to set up a stationery business for his physically handicapped son.
• On September 16, SC ruled in Ajit Singh vs Jit Ram that even if the Punjab law specified that the landlord could reclaim a commercial property only "for his own use", his son too could be allowed to seek eviction of the tenant provided he was not already occupying another shop in Chandigarh.
Thanks to such activism displayed by SC, the balance of the rent laws is now clearly tilting in favour of landlords. This is a far cry from the pro-tenant rulings that were routinely made by courts for over four decades. The plea of bona fide requirement could then be taken only with regard to residential premises — there was hardly any scope to evict the tenant of a non-residential or commercial property.
The apex court finally broke the impasse in 1996 when it struck down a Punjab law provision that discriminated between residential and non-residential premises in the matter of eviction. The 1996 verdict in Harbilas Rai Bansal vs State of Punjab held that the discrimination was unconstitutional as it violated the commercial property owner's fundamental right to equality.
Since SC rulings are deemed to lay down the law of the land, the plea of bona fide requirement should have become available to landlords of all categories across the country after 1996. That did not however happen as evident from a 2003 verdict of the Delhi HC, which said that SC's 1996 ruling in the Bansal case did not apply to the capital as the Punjab law had been enacted in different circumstances.
"Legislative intent may change from state to state," HC said, leading to an anomalous situation in which the very provision that was held to be unconstitutional by SC in the context of one state was upheld by the HC of another state.It was only in April this year that SC's verdict in Satyawati Sharma vs Union of India corrected the anomaly as it partially struck down the provisi
on of the Delhi Rent Control Act 1958 that discriminated against the landlords of commercial premises. Applying the principle of the 1996 verdict to Delhi, SC has made it possible for a Delhi landlord also to seek eviction from a commercial premises citing bona fide requirement for himself or any family member dependent on him.
Recalling the influx of Partition refugees in Delhi, SC said that the 1958 Act did not provide for eviction of tenants from non-residential premises as part of the effort to rehabilitate those who had shifted from Pakistan. SC decried Delhi HC's failure to appreciate that the rationale behind the 1958 protection did not apply any longer.
In a related development last month, SC held in Leelabai Gajanan Pansare vs Oriental Insurance that government companies such as Oriental Insurance and Bharat Petroleum were capable of paying rent at the market rates in Mumbai and therefore not entitled to the protection of the Maharashtra Rent Control Act.
This is yet another indication that the new generation of judges in SC is taking a more liberal and realistic approach to landlord-tenant relations.
(TIMES OF INDIA-30th Sept 2008)
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