Report No. 129
House Rent/Possession Litigation
3.1. The moment one focuses one's attention on urban litigation, the institution of suits involving rent and possession of urban property stares into face. It is a post-war phenomena. It is an inevitable consequence of ever-rising urbanisation process. It is attributable to the harsh law of demand far outweighing the supply and its consequences.
3.2. More and wore people migrated from the rural areas to the urban areas in search of livelihood. Availability of the jobs in rural areas was so scarce that the rural population in search of petty jobs migrated to nearby cities. Housing industry did not and could not cope with the mounting demand for housing accommodation. Apart from the emergence of slums, the pressure on availability of accommodation was so heavy that unless the greed for thriving at the cost of needy seekers of scarce accommodation is regulated and checkmated by adequate legislation, the seekers of accommodation were likely to be exposed to exploitation by the owners of urban property. This situation led to the enactment of Rent Restriction Acts by almost all State Legislatures as the subject of 'land, including the relation of landlord and tenant', is comprised in entry 18 of the State List.
3.3. A mere look at various Rent Acts would show the divergence in approach of various State Legislatures. This was sought to be justified on the one hand by saying that the local Acts reflect peculiar local situations and seek to meet local requirements and on the other hand urged that the degree of protection must differ from place to place relatable to the availability or the scarcity of the housing accommodation in the area. There is no material or appreciable difference between the position of a tenant in a city like Madras in Tamil Nadu compared to his counterpart in a city like Bombay in Maharashtra State or Calcutta in West Bengal. And yet the differential treatment is so glaring that one fails to understand why the Tamil Nadu Legislature would not grant that much protection which the Maharashtra Legislature considered appropriate to grant.
3.4. To illustrate, section 14 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, having the marginal note 'Recovery of possession by landlord for repairs or for re-construction', enables a landlord to obtain possession by an order of the Controller, if he is satisfied-(a) that the building is bona fide required by the landlord for carrying out repairs, which cannot be carried out without the building being vacant; or (b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, directing the tenant to deliver possession of the building to the landlord before a specified date.
Sub-section (2)(a) of section 14 ensures that if possession is given for repairs, on the completion of repairs the tenant would be re-inducted in possession. But when it comes to eviction on the ground that possession of the building is required by the landlord for the immediate purpose of demolition, the only assurance which the landlord has to give to the Controller is that he would substantially commence reconstruction within the time specified. There is no assurance that on the building being reconstructed, the tenant would be inducted in the building or in part thereof.
Compare this provision with section 13(1)(hh) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which provides that the landlord shall be entitled to recover possession of any premises if the court is satisfied 'that the premises consist of not more than two floors and are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting a new building on the premises sought to be demolished'.
Sub-section (3A) of section 13 further provides that no decree for eviction shall be passed on the ground specified in section 13(1)(hh) unless the landlord produces at the time of the commencement of the suit a certificate granted by the Tribunal under sub-section (3B) and gives an undertaking, amongst others, that the new building shall contain not less than two times the number of residential, tenements, and not less than two times the floor area, contained in the premises sought to be demolished.
Section 17B further provides that where a decree for eviction has been passed by the court on the ground specified in section 13(1)(hh) and the work of demolishing the premises and of erection of new buildings has been commenced by the landlord, the tenant may, within six months from the date on which he delivered vacant possession of the premises to the landlord, give notice to the landlord of his intention to occupy as tenant the premises in the new building on its completion on the conditions set out in the section. An obligation has been cast on the landlord to intimate to the tenant the date of completion of the construction of the new building by section 17C.
The landlord then is under an obligation to intimate to the tenant the date on which the erection will be completed and on that date the tenant shall be entitled to occupy the tenement assigned to him by the landlord. This is the whole scheme of law under the Bombay Act where possession is sought on the ground of demolition of the building. Now the Tamil Nadu Act also permits eviction on the ground that the building is to be demolished but there is absolutely no countervailing obligation on the landlord to reinduct the tenant in the new building nor the tenant has any right to that effect.
3.5. The Tamil Nadu Act did not impose any obligation on the landlord seeking possession on the ground that possession of a building is required for immediate demolition to reconstruct and reinduct tenant. This uninhibited right to seek possession on the ground that possession of the building is required for immediate demolition gave rise to numerous litigations where even possession of a recently constructed building was sought on the ground of immediate demolition.
There was a whole nefarious purpose behind this move. It is a notorious fact that when a building is under construction and intended to be let out, the prospective tenants in search of accommodation give advance loans on the assurance of securing accommodation. If such building is demolished, there can be fresh exploitation of such condemned tenants. Such a nefarious practice was curbed by the provision in the Bombay Rent Act as delineated hereinbefore.
3.6. Numerous matters under Tamil Nadu Act came before the Supreme Court for possession under section 14 of the Tamil Nadu Act. Possession in each case was sought by the landlord on the ground that the building is required for immediate demolition. The Court took notice of the fact that unlike other Rent Acts, the Tamil Nadu Act did not provide for re-induction of the tenant into the reconstructed building. Allowing the appeal of the tenants, the Court held that:
"The age and decrepit condition of the building is a relevant factor amongst several others which will have to be considered while adjudicating upon the bona fide requirement of the landlord under that provision (section 14B) and might receive greater emphasis in a case where the enactment as is the case here, contains no provision for reinducting the evicted tenant into the new building than where the concerned enactment has such a provision."1
In other words, the absence of a provision for re-induction of tenant in the newly constructed building is a relevant factor to be taken into consideration for determining the bona fides of the landlord and in some cases the Court insisted upon the landlord giving an undertaking that on the tenant evicting the premises and handing it over to the landlord for immediate demolition, the landlord must commence reconstruction within the specific time and complete it within a reasonable time and reinduct the tenant. The Court drew inspiration from provisions of Rent Acts in other States. The appeals of the tenants were allowed and the cases were remanded to the Controller.
1. Metalware and Company v. Bansilal Sarma and Co., (1979) 3 SCC 398 (407).
3.7. A grievance can be made that the approach discloses usurpation of the legislative power of the State Assembly. Conceding that the Judges have to interpret law and should not assume the role of legislators, yet it is well-established that they may legislate interstitially and where the prevision is brazen-facedly unfair as is the case here, the temptation to legislate cannot be thwarted. Where such a situation comes across, the Judges do not fold up their hands but would enquire what would they have done if they had been the legislators and to straighten out the ruck in the texture and iron out the creases-
Said Lord Denning, L.J.:-
"When a defect appears a Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament - and then he must supplement the written words so as to give 'force and life' to the intention of legislature. A Judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out? He must then do as they would have done. A Judge must not alter the material of which the Act is woven, but he can and should iron out the creases."1
The Supreme Court put its seal of approval on this statement of law.2 Consciously, and sometimes not so consciously, this is being done is a fact, and whatever be the criticism it cannot be wished away. More so when avoiding to do it would lead to manifest injustice. The Law Commission is conscious of the fact that the aforementioned observation was not approved by the House of Lords and in fact it was adversely commented upon but that is hardly relevant.
1. Seaford Court Estates Ltd. v. Ashor, (1949) 2 All ER 155 (164).
2. Bangalore Water Supply and Sewerage Board v. Rajapa, (1978) 2 SCC 213 (285).
3.8. Another illustration would further buttress this position. Delhi being the capital town, the Delhi Rent Control Act includes some special features which are absent in rent laws in other States. A large number of buildings in Delhi are either State owned or constructed by Delhi Development Authority. But apart from the members of the affluent section of the society who have built their houses, numerous co-operative housing societies have come into existence formed by employees of the Central Government and Delhi Administration.
Most of them while occupying Government accommodation available to them by virtue of their office built their houses and rented them out at very high rents. As if this is not sufficient, there is a provision in Delhi Rent Control Act which by itself renders insecure the possession of the tenant, simultaneously giving leverage to the landlord to extort higher rent on the pain of dispossessing the tenant. Section 21 of the Delhi Rent Control Act provides that:
'Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed manner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and tenant and the tenant does not, on the expiry of the said period, vacate such premises, then, notwithstanding anything contained in section 14 or in any other law, the Controller may, on an application made to him in this behalf by the landlord within such time as may be prescribed, place the landlord in vacant possession of the premises or part thereof by evicting the tenant and every other person who may be in occupation of such premises.'
The object underlying this provision was that numerous Government officers may be posted out of India for short durations and during the period of their absence from India, they may be able to rent out premises with the assurance that on their return they can evict the tenant without going through the rigmarole of a suit. The way in which this section is implemented has led to numerous extra legal devices. The landlord invoking jurisdiction under section 21 gets a decree for possession in advance. At the end of the specified period which is usually not exceeding two years, the decree can be executed even -without notice to the tenant.
Section 21 was used by unscrupulous landlords to let out the premises for the specified period on the ground that he/she does not temporarily require the same. At the end of the prescribed period, the landlord would call upon the tenant to vacate but would renew for a further specified period the tenancy by the same procedure at an enhanced rate. Interpreting section 21 in a case in which a landlady had let out premises by invoking section 21 in 1968 for a term and thereafter from time to time continued the possession of the tenant on a phased lease and increase in rent, the Court observed as under:
"We can correctly visualize the scope and sweep of this provision (section 21) only in its proper social setting. It carves out a category for special treatment. While no landlord can evict without compliance with sections 14, 19 and 20, does a liberal eviction policy underlie section 21?
Apparently contrary but actually not, once we understand the raison d'etre of the section. Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crisis. One source of such spare accommodation which is usually shy is potentially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he has some credible assurance that when he needs he will get it back.
If an officer is going on other assignment for a particular period, or the owner has official quarters so that he can let out if he is confident that on his retirement he will be able to re-occupy, such accommodation may add to the total lease-worthy houses Section 21 is the answer. The law seeks to persuade the owner of premises available for letting for a particular or limited period by giving him the special assurance that at the expiry of that period, the appointed agency will place the landlord in vacant possession."1
The Court then proceeded to point out that 'It is easy to envisage the terrible blow to the rent control law if section 21 were freely permitted to subvert the scheme of section 14'.2 The Court came to the conclusion that if the landlord at the end of every specified period repeatedly renews tenancy under the pretext of the accommodation being available temporarily for a short period, then such exercise would be violative of section 21 and it would be open to the Controller when warrant for possession is sent to enquire whether section 21 was wrongly invoked and deny the relief.
1. S.B. Noronah v. Prem Kumari Khanna, AIR 1980 SC 193 (195-196).
2. Id., at 197.
3.9. One more illustration would bring to fore the denial of protection to tenant under Delhi Rent Control Act. Section 14, with the marginal note of 'Protection to tenant against eviction, sets out grounds, proof of anyone of which would enable the landlord to re-enter. Right of re-entry of a landlord in demised premises is made specifically subject to the provisions of section 14.
One of the grounds enabling the landlord to obtain possession of the demised premises is 'that the premises let for residential purposes 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 that the landlord or such person has no other reasonably suitable residential accommodation'.1
If the ground herein specified is invoked by a landlord, he can proceed according to the procedure prescribed in Chapter IIIA of the Act. This Chapter was introduced by Delhi Rent Control (Amendment) Act, 1976, which came into force with effect from 1-12-1975. Section 25B provides that where an application is made by a landlord for the recovery of possession of premises on the grounds specified in section 14(1)(e), the same shall be dealt with in accordance with the procedure specified in the section.
Briefly, the procedure specified is of a summary nature, the peculiar feature, of which is that on the service of a summons of an application for recovery of rent made by the landlord, the tenant shall not contest prayer for eviction from the premises unless he files an affidavit stating the grounds on which he seeks to contest the application for eviction and obtains leave from the Controller in the manner provided in the section. The Controller would give leave to tenant to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for recovery of possession of the premises on the ground mentioned in section 14(1)(e).
In no other Rent Act throughout the length and breadth of this country except the Delhi Rent Control Act, the tenant is left at the mercy of the court even with his initial right to defend the action. The law reports bristle with numerous orders at the Supreme Court level where not only the Controller misdirected himself in refusing leave but the same was upheld in a revision petition to the High Court and the tenant was evicted without a semblance of defence being heard. Leave to defend oneself was treated a stage where long orders were written by Controller as if evidence has been lee and that is required to be appreciated.
Ultimately the Supreme Court had to point out that "Restrictions on the landlord's unfettered right to re-entry may be stringent or not so stringent depending upon the local situation. But the underlying thrust of all rent restriction legislations universally recognised must not be lost sight of that the enabling provisions of Rent Restriction Acts are not to be so construed or interpreted as would make the protection conferred on the tenant illusory by a liberal approach to the desire of the landlord to evict tenant under the camouflage of personal requirement".2
The Court pointed out that the procedure prescribed in section 25B is harsh compared to the normal procedure prescribed for dealing with application for eviction on grounds other than the one mentioned in section 14(1)(e). And it would be surprising to recall here that no appeal was provided against the decision of the Controller refusing to grant leave. The Controller was the final arbiter in a summary procedure of the destiny of the tenant.
The Court further proceeded to point out that the object and purpose of rent control statutes of putting a fetter on the unrestricted right of re-entry enjoyed by the landlords with a view to protecting the tenants assuring security of tenure, must always inform and guide the interpretative process of such socially-oriented beneficial legislation. The tenants in other parts of the country are not exposed to such harsh procedure almost bolting the doors of the courts for justice.
1. Section 14(1)(e) of the Delhi Rent Control Act.
2. Precision Steel and Engineering Works v. Prem Deva Niranajan Deva Tayal, (1982) 3 SCC 270 (279).
3.10. These illustrations amply demonstrate the need for a uniform Rent Act applicable to the whole country excluding such areas where inadequacy of accommodation is not a problem. Enactment of Rent Act being within the purview of the State Legislature, the Law Commission is not undertaking this exercise. However, time is ripe for formulating a model Rent Act.