The Delhi Rent Control Act, 1958 | Important Acts and Laws for Judiciary Exams PDF Download

Historical Background

• The first rent control regulations in Delhi were implemented during the Second World War in 1939 under the Defense of India Rules. Initially, these rules were confined to New Delhi and the Notified Area, Civil Station.
• In 1942, the provisions of the Punjab Urban Rent Restriction Act, 1941 were extended to the remaining areas of Delhi due to the inadequacy of the existing rules.
• To address the shortcomings of the Punjab Act, another order was issued under the Defense of India Rules in 1944.
• Post-war, a comprehensive legislation known as The Delhi and 'Ajmer Marwara Rent Control Act, 1947 was enacted for all parts of Delhi. This was later replaced by The Delhi and Ajmer Rent Control Act in 1952, which restricted the application of rent Acts from other states to certain areas of Delhi.
• In 1958, efforts were made to address loopholes in the 1952 act. Additionally, the Slum Areas (Improvement and Clearance) Act was passed in the same year to protect the interests of slum dwellers.
• The Delhi Rent Control Act, 1958, which became effective on February 9, 1959, was the subsequent significant legislation governing rent control in Delhi.

Current Legislation

• The Delhi Rent Control Act, 1958 is the prevailing legislation concerning rent control in Delhi.
• It applies to areas within the New Delhi Municipal Committee, the Delhi Cantonment Board, and the urban regions of the Municipal Corporation of the Urban Areas in Delhi.

Objectives of the Rent Control Act

• The enactment of the Rent Control Act aimed to achieve several objectives:
• To establish an efficient system for prompt resolution of disputes between landlords and tenants.
• To determine a fair standard rent for tenants of different types of premises, encouraging proper maintenance of houses and further investments in housing construction.
• To provide tenants with increased protection against eviction.
• The Rent Control Act aims to facilitate quick resolution of disputes between landlords and tenants, establish standard rent rates, and safeguard tenants from eviction.
• This legislation primarily governs private landlord-tenant relationships, excluding properties owned by the Government.
• Its purpose is to offer benefits to tenants while considering the interests of landlords through prompt dispute resolution.

Delhi Rent Control Act as a Socio-Economic Legislation

• The Delhi Rent Control Act serves as a socio-economic law designed to shield tenants from unjust evictions.
• It strives to shield tenants from arbitrary or unfair evictions and prevent them from being exploited by excessively high rents.

Key Points

• The Rent Control Act aims to balance the rights of landlords and tenants by streamlining dispute resolution.
• It offers tenants protection from unwarranted evictions and prevents them from facing excessively high rental charges.

The Delhi Rent Control Act, 1958

Short Title, Extent, and Commencement

• This Act is known as the Delhi Rent Control Act, 1958.
• It applies to specific urban areas within Delhi as outlined in the First Schedule.
• The Act comes into effect based on notifications by the Central Government.

Definitions

• Basic Rent: Refers to the rent of premises leased before June 2, 1944, as per the Second Schedule.
• Controller: Includes appointed Controllers responsible for certain sections.
• Fair Rate: Represents the rate set under sections 31 and 32.
• Hotel or Lodging House: Describes a place providing lodging for payment.
• Landlord: Denotes the individual receiving or entitled to receive rent for premises.
• Lawful Increase: Indicates permissible rent increments under the Act.
• Manager of a Hotel: Encompasses individuals managing hotel operations.

Key Definitions

• Owner of a Lodging House: Refers to an individual who receives payment for providing board, lodging, or other services in a lodging house, either for themselves or on behalf of others.
• Premises: Any building or part intended for separate residential, commercial, or other use. It includes the building's garden, grounds, and outhouses, along with any furniture provided by the landlord.
• Prescribed: Refers to regulations set by rules under this Act.
• Standard Rent: The rent specified in section 6, or any increased rent as per section 7.
• Tenant: Any individual liable to pay rent for premises, including sub-tenants and those remaining in possession after tenancy termination. Also includes specific family members in certain circumstances.
  • Spouse
  • Son or daughter
  • Parents
  • Daughter-in-law, under specific conditions

Order of Succession in Case of Death

When a person in possession of a property dies, the order of succession for continuing in possession after the tenancy ends is as follows:

• Firstly, the surviving spouse of the deceased.
• Secondly, the son or daughter of the deceased, or both if there is no surviving spouse who lived with the deceased.
• Thirdly, the parents of the deceased if there is no surviving spouse, son, or daughter living with the deceased.
• Fourthly, the daughter-in-law, widow of the deceased's son, if there are no other surviving relatives living with the deceased.

Explanation I

• Surviving spouse takes precedence, followed by children, parents, and daughter-in-law.

Explanation II

• If the successor was not financially dependent on the deceased, they have the right to continue for one year after which the right extinguishes or upon the successor's death.

Explanation III

• Extinguishment of one successor's right does not affect others of the same category. The right is personal and does not pass on to heirs. "Urban area" is defined as per the Delhi Municipal Corporation Act, 1957.

Definition of Tenant

• The definition of a tenant in the Act is detailed and can be broken down into three main parts:
  • The first part is the general part.
  • The second part includes specific persons such as a sub-tenant, a person continuing in possession after the termination of their tenancy, or a statutory tenant, and devolution or transmission of tenancy on the death of the tenant.
  • The third part excludes certain persons and specifies that only relations of the deceased tenant mentioned in the Explanation-I are benefitted.
• According to the opening general part of the definition, a tenant under the Act is any person who is legally obligated to pay rent for any premises.
• Clause (iii) of the third part states that the benefits apply only to specific relations of the deceased tenant, like a member of their family living in the premises up to the date of the tenant's death.
• This clause is applicable only to a tenant whose tenancy had been terminated during their lifetime and continued in possession thereafter.
• An example is the case of Jaimal Singh v. Jaswant Singh, 1989 (2) RCJ 246 Del.

Scope of Sub-Clause (iii) to Clause (1) of Section 2: Various Limitations

• In Mohan Lal v. Shri Krishan, 1977 (2) RCJ 505, the court ruled that the 1976 amendment extended protection to heirs and successors with restrictions.
• Limitations include:
  • The heir must not be financially independent to have a right to possession for a limited period of 1 year.
  • Only specific classes of heirs, such as the surviving spouse, son or daughter, parents, and widowed daughter-in-law of a predeceased son, have the right to continue in possession.

Order of Succession in Property Rights

• In the order of succession, the spouse inherits to the exclusion of the son or daughter.
• Children (sons and daughters) will inherit to the exclusion of the parents. Parents, in turn, exclude the daughter-in-law. The first category always excludes the second, creating a hierarchy of succession.
• When two successors of the same category exist and one is financially independent while the other is financially dependent, the financially independent successor has the right to possession for one year. The financially dependent one retains the right for his lifetime if he belongs to the same category as the financially independent successor.
• For a successor to be entitled to the right of possession, they must have "ordinarily lived in the premises with the deceased person as a member of his family up to the day of his death."
• If a successor of a category has already enjoyed the right to possession and there are no other successors of the same category, the right ends and does not pass to a successor in a lower category.
• The right of a successor is personal and does not extend beyond the successor's lifetime, nor does it pass on to their heirs.

Explanation of the Order of Succession

• Surviving spouse: The spouse of the deceased has the first right to inherit.
• Son or daughter: Children inherit after the spouse.
• Parents: If there are no children, parents of the deceased inherit.
• Daughter-in-law: The widow of a predeceased son inherits last in this succession order.

Conditions for Succession

• The successor must have been living in the premises with the deceased tenant as a family member until the tenant's death.

Additional Explanation

• If the successor who inherits the right to possession was not financially dependent on the deceased tenant, they will only have this right for a limited period of one year or until their death, whichever comes first. 
• After this period, the right is extinguished.

Statutory Tenancy

• Financial dependency on the deceased grants the right to continue in possession.
• Financial independence may limit the duration of possession.

Explanation III

• Specifies that successor's rights are limited to the same category.
• Successor's extinction does not transfer rights to lower category successors.

Application of Explanation III

• Exclusive to residential premises; non-residential premises follow general succession laws.

Explanation III

• When a tenant (A) dies, the tenancy rights of the residential premises pass on to the spouse (B) as per successions.
• If B was not living with the deceased tenant, the rights devolve on C, who receives limited tenancy for one year.
• If C was not financially dependent on A or B, their tenancy rights extinguish after one year, but this does not prevent D (Daughter) from claiming her tenancy right.

Explanation III Clause (b)

• Every successor has the right to continue in possession after the tenancy ends, but this right is personal and does not pass on to their heirs.
• There is only one succession allowed. Once a successor has occupied the premises for the permitted time, there will be no further succession to their heirs.
• For example, if C or D tries to claim rights after the successor in the first category, they will not be successful.

Interpretation of Key Words in Section 2(1)

• Ordinarily Living: Means residing permanently or for a considerable time.
• Living With: Implies residing with the predecessor, sharing living space and companionship.
• Financially Dependent: Refers to dependence on the deceased for residential purposes only.

Contractual and Statutory Tenancy

• Contractual Tenancy: Contractual tenancy is established when parties form a landlord-tenant relationship through an agreement or contract. It can be ended by notice, the passage of time, or other terms specified in the agreement.
• Statutory Tenancy: Statutory tenancy arises when a person remains in the premises after the contractual tenancy expires without vacating. This individual is termed a statutory tenant, with rights granted by law.
• Transition to Statutory Tenancy: Following the termination of a tenancy, the subsequent tenancy is not based on a contract but governed by the Rent Control Act. The concept of a statutory tenant bridges the gap between general law and rent control regulations.
• 1976 Amendment Implications: According to the 1976 Amendment, if a statutory tenant passes away, the widow inherits the rights. After the widow's demise, the rights cannot pass to the son or parents of the deceased.
• Position of Statutory Tenant in English Law: In English law under the 1920 Act, the right of a statutory tenant is non-transferable and non-inheritable. The tenancy terminates upon the tenant's death or voluntary surrender.

General Law on Tenant's Rights

• In the absence of a specific contract clause, a tenant typically has the right to assign, sublet, or part with possession of the tenancy premises.
• However, in England, these rights are regulated by statute.
• As a statutory tenant in England, one can sublet a part of a dwelling house but not the entire dwelling, as doing so would terminate the tenancy.
• In the case of Roe v. Russell, 1928 (2) KB 117, it was established that a statutory tenant without a subletting prohibition in the tenancy contract can sublet part of the premises but cannot sublet the entire premises.

Position of Statutory Tenant in India

• The principles of English law were first considered by the Supreme Court of India in Anand Niwas (P) Ltd. v. Anandji Kalyanji (1964) 4 SCR 892, in relation to the Bombay Rent Control Act, 1947.
• The court deliberated on the rights of a statutory tenant regarding subletting.
• It was questioned whether a tenant whose tenancy had ended had the right to sublet the premises.
• The court ruled that a statutory tenant, defined as a tenant whose tenancy has expired but who remains in possession, does not have the authority to sublet.
• The court emphasized that a statutory tenant lacks an interest in the property, making it impossible to transfer or assign the right of occupation.

Exceptions to the Application of the Act

The Act does not apply to certain premises under specific conditions:
(a) Premises owned by the Government
(b) Tenancies or similar relationships established by a government grant for leased or requisitioned premises
(c) Premises, regardless of type, with a monthly rent exceeding three thousand and five hundred rupees

Scope of Section 3

• Section 3 outlines exceptions to the Delhi Rent Control (Amendment) Act, 1988, specifically for premises owned by the Government or under specific relationships with the Government.
• The Act does not apply to premises owned by the Government, tenancies under Government grants, or premises requisitioned by the Government. However, if Government-owned premises are lawfully sublet, the Act applies to the subtenancy.
• Government ownership is defined as direct ownership by the Government. This is distinct from premises leased or requisitioned by the Government.
• "Other like relationships created by a grant" encompass relationships beyond typical lessor-lessee arrangements, such as licenses and allotments.
• The exemption under Section 3 is not contingent on the nature of the relationship with the occupier. Even if the Government leases out its property, the Act can still apply to subsequent lessees.
• For instance, if the Government leases a property, and the lessee further sublets it, the Act can extend to the subtenants, irrespective of their direct connection with the Government.

Provisions Regarding Rent

Rent in excess of standard rent not recoverable

• Section 4 of the Act specifies that unless a lawful increase is sanctioned, no tenant is obligated to pay rent exceeding the standard rent. 
• Any agreement contrary to this shall be treated as an agreement for the standard rent only.

Exceptions to the rule

• Where rent increase was agreed upon before January 1, 1939.
• Where the landlord is authorized to collect such an increase under the Act.

Unlawful Charges Not Permitted

The Act prohibits any person from demanding or receiving rent surpassing the standard amount. Additionally, no extra charges beyond rent should be claimed without Controller’s permission.

• No premium, pugree, or additional consideration can be demanded during tenancy or sub-tenancy.
• Without Controller's consent, rent exceeding a month’s rent in advance cannot be obtained.

Clause on Payment for Relinquishment of Tenancy

• It is not allowed for the tenant or anyone acting on their behalf to receive any payment for giving up their tenancy.
• Exceptions:
  • Payments agreed upon before January 1, 1939.
  • Payments for constructing premises on the landlord's land with the condition of future leasing to the payer, not exceeding the agreed rent for five years.
• Explanation: "Family member" includes various relatives depending on the type of family.

Standard Rent Definition

Residential Premises

• If leased before June 2, 1944:
  • If basic rent is ≤ ₹600 per annum, the basic rent is considered.
  • If basic rent exceeds ₹600 per annum, basic rent plus 10% is considered.
• If leased on or after June 2, 1944:
  • Applies to premises with rent fixed under specific Rent Control Acts.

Rent control laws govern the maximum amount of rent a landlord can charge a tenant for residential or commercial property. Let's delve into the specifics of these laws:

Calculation of Rent

• For rents not exceeding twelve hundred rupees annually:
  • Rent is fixed at the specified amount.
• For rents exceeding twelve hundred rupees annually:
  • Rent is fixed at the specified amount plus ten percent of the rent.
• For premises other than residential:
  • For premises rented before June 2, 1944:
    • Basic rent plus ten percent of the basic rent is charged.
    • If this exceeds twelve hundred rupees, fifteen percent is charged instead.
  • For premises rented on or after June 2, 1944 under specific acts:
    • If the rent is below twelve hundred rupees annually, it is fixed at that amount.
    • If the rent is above twelve hundred rupees annually, fifteen percent of the rent is added.
  • Other cases involve calculating rent based on construction costs and land prices.

Standard Rent Determination

For premises built between June 2, 1951, and June 9, 1955:

• The annual rent for seven years is determined based on the rent in March 1958 or the last known rent.

These guidelines provide a framework for determining rents in different scenarios, offering protection and clarity for both landlords and tenants under rent control laws.