His lordship honorable Rakesh Tiwari, J in Civil Misc. Writ Petition on No. 69351 of 2006, Abdul Jalil v Special Judge EC Act and others, made elaborate discussion on the scheme, object and relevant provisions of Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction), Act, 1972 .Important portion of his thesis is being reproduced in this article.
The Act was legislated in the interest of general public for the regulation of letting, rent and eviction of tenants from certain classes of buildings situated in urban areas and for matters connected therewith. It replaces the United Provinces (Temporary) Control of Rent and Eviction Act, 1947 (hereinafter referred to as the Act of 1947) which was enacted as a temporary measure, relating to control of letting and rent of accommodation temporarily in anticipation/ expectation for tiding over the shortage of accommodation for a short period.
The Act of 1947 had been in fact enacted with an object to provide accommodation to the needy person to be made available by the landlord and for certain buildings or part thereof which come under the regulatory provisions of the Act for allotment. It was expected from the tenant that as soon as he has an alternative accommodation available to him, he would vacate the tenanted house or commercial accommodation under his occupation for others in time and if he does not do so, he may be directed to vacate the same in certain conditions as provided under the various provisions of the Act so that the accommodation so vacated may be given to other needy person on standard rent as determined by the authority under Section 9 of the Act from time to time or may be released to the landlord on his application for his personal need.
The first comprehensive legislation regulating rent and eviction bill was published in the Gazette dated 13th January, 1972 by way of United Provinces (Temporary) Control of Rent and Eviction Act, 1947 (U.P. Act 3 of 1947). In the statement of object and reasons it is stated that it was a temporary measure enacted for a limited period with a view mainly to continue in force provisions relating to control or letting and rent of accommodation similar to the earlier orders issued under the Defence of India Rules, 1939. It was expected that with the enactment of U.P. Act No.3 of 1947, the problem of shortage of accommodation would be tided over after a short period.
By enforcement of U.P. Act No.3 of 1947, the common law right of landlords to the seek eviction after determination of lease as provided under Section 111 of the Transfer of Property Act, 1882 were considerably curtailed. Section-5 of U.P. Act No.3 of 1947 is as under: -
" "Section 5(2): - Where the rent for any accommodation has not been agreed upon or where, in the case of tenancies continuing from before October 1,1946, the landlord wishes to enhance the rent agreed upon, he may, by notice is writing, fix the annual rent at, or enhance it to, an amount not exceeding the reasonable annual rent."
The phrase "reasonable annual rent" was defined in Section 2(f) of Act No.3 of 1947 as follows: -
"2(f)"Reasonable annual rent" in the case of accommodation constructed before July 1, 1946 means;
(1) If it is separately assessed to municipal assessment, its municipal assessment plus 25 percent thereon;
(2) If it is a part only of the accommodation so assessed, the proportionate amount of the municipal assessment of such accommodation plus 25 percent thereon;
(3) If it is not assessed to municipal assessment-
(i) but was held by a tenant on rent between April 1, 1942 and June 30, 1946 fifteen times the rent for the one month nearest to and after April 1, 1942, and
(ii) if it was not so held on rent, the amount determined under Section 3-A and in the case of accommodation, constructed on or after July 1, 1946 means the rent determined in accordance with Section 3A.
The municipal assessment has been defined in clause (e) of Section 2 of the Act, as under:-
"Section 2(e) "Municipal assessment" means, the annual rental value assessed by the municipal board or notified area, as the case maybe in force on April 1, 1942, in respect of accommodation which was assessed on or before such date and the first assessment made after April1, 1942,in respect of accommodation which was assessed for the first time after such date."
The District Magistrate was given power to determine the annual reasonable rent by virtue of Section 3-A of the Act which reads as follows: -
"3-A. Determination of annual reasonable rent by the District Magistrate: -
(1) The District Magistrate may, on the application of a person who has been allotted any accommodation to which sub-clause (1) of clause (f) of Section 2 applies declare the annual reasonable rent payable therefor. The District Magistrate may likewise on the application of a person who has been allotted any accommodation or of the landlord determine the reasonable annual rent of the accommodation to which any of the remaining provisions of the said clause may be applicable.
(2) In determining the reasonable annual rent the District Magistrate shall take into account-
(a) if the accommodation was constructed on or after July 1, 1946, the cost of land and the cost of construction maintenance and repairs thereof, its situation and any other matter, which in the opinion of the District Magistrate is material, and
(b) if it is accommodation falling under sub-clause or para (i) of sub-clause (3) of clause (f) of Section 2, the principles therein set forth, and
(c) if it is accommodation falling under para (ii) of sub-clause (3) of clause (f) aforesaid, the principles set forth in clause (a) of sub-section(1) of Section 6.
(3) Subject to the result of any suit filed under sub-section (4) of Section 6, the rent declared or determined by the District Magistrate under this section shall be the annual reasonable rent of the accommodation."
Thus, the rent for an accommodation covered by U.P. Act No.3 of 1947 was freezd to a level prevailing in 1940's or in case of a building let out subsequently to the amount determined under Section 3-A. There was no provision under the said Act for any revision in rent.
As U.P. Act No.3 of 1947 failed to meet the aspirations of the people in its principle and object of overcoming shortage of accommodation, therefore, it was replaced by the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. It was enforced with effect from 15 July, 1972.The statement of objects and reasons of Act No. XIII of 1972 mentioned that the new law i.e. the present Act is a permanent one instead of the earlier Act which was a temporary measure; that there will be a ten years holiday for new buildings in order to give incentive for construction of new building. Thus, the legislature while enacting the present Act was conscious of the fact that by regulating letting, rent and eviction, the construction activity has been adversely affected. Such regulations deter construction activity and thus the main and principal object of the earlier Act i.e. to give impetus to construction activity was defeated.
One of the objects of the new Act was to regulate rent and, therefore, a landlord whose building is covered by provisions of the Act can only claim standard rent as defined under Section 3(k) of the Act which is as follows: -
3(k) "Standard rent", subject to the provisions of Section 6,8 and 10, means-
(i) in the case of building governed by the old Act and let out at the time of the commencement of this Act--
(a) where there is both an agreed rent payable therefore at such commencement as well as a reasonable annual rent [which in this Act has the same meaning as in Section 2(f) of the old Act, reproduced in the Schedule] the agreed rent or the reasonable annual rent plus 25 per cent thereon, whichever is greater;
(b) where there is no agreed rent, but there is a reasonable annual rent, the reasonable rent plus 25 percent thereon;
(c) where there is neither agreed rent nor reasonable annual rent, the rent as determined under Section 9 ;
(ii) in any other case, the assessed letting value, for the time being in force, and in the absence of assessment, the rent determined under Section 9."
The reasonable annual rent has the same meaning as in Section 2(f) of U.P. Act No.3 of 1947.
"2(f) "assessment", in relation to a building, means the assessment or proportionate assessment, as the case may be, of the letting value thereof by the local authority having jurisdiction and "assessed" shall be construed accordingly."
Section 4(2) provides that except as provided in Sections 5,6,7,8 (9-A) and 10, the rent payable for any building shall be such as may be agreed upon between the landlord and the tenant, and in the absence of any agreement; the standard rent. Sections 5,6,7 8 (9-A) and 10 are as under:-
(5) Rent payable in case of old building- In the case of a tenancy continuing from before the commencement of this Act, in respect of a building to which the old Act was applicable, the landlord may, by notice in writing given within three months from the commencement of this Act, enhance the rent payable therefore to an amount not exceeding the standard rent, and the rent so enhanced shall be payable from the commencement of this Act.
(6) Effect of improvements on rent- Notwithstanding anything contained in Section 4 or Section 5, but subject to the provisions of Section 8, where the landlord has, after the commencement of this Act, either with the consent of the tenant or in pursuance of any requirement of law, made any improvement in a building, he may, by notice in writing to the tenant, given within three months from the date of completion of the improvement, enhance the monthly rent of the building by an amount not exceeding one per cent, of the actual cost of such improvement, with effect from the said date, and thereupon the standard rent of that building shall stand enhanced accordingly.
(7) Disputes regarding amount of standard rent, etc.-(1) Where a dispute arises with regard to the amount of the standard rent or to the amount of enhancement in rent permissible under Section 5 or Section 6 or to the date with effect from which such enhancement shall take effect, or to the amount of taxes payable by the tenant under Section 7, or to the amount of proportionate rent payable by the tenant after a part of the building or any land appurtenant thereto is released under Section 16 or Section 21, or to the amount of rent payable by the original tenant for the new building allotted to him under sub-section (2) of Section 24, the District Magistrate shall, on an application being made in that behalf, by order determine such dispute.
(2) Where the assessment of a building occupied by a tenant is lower than the agreed rent payable therefore, the District Magistrate, on an application of the tenant or of his own motion, may, after giving to the landlord an opportunity of being heard direct the local authority concerned to enhance the assessment in accordance with the agreed rent with effect from the date from which the agreed rent has been payable or the date of commencement of this Act, whichever is later, and thereupon notwithstanding anything contained in the law relating to that local authority, the assessment shall be corrected accordingly.
Every order under sub-section (1) or sub-section (2) shall, subject to the result of any appeal preferred under Section 10, be final.
Section 9 of the Act provides for the manner in which standard rent is to be determined which is as follows:-
"9. Determination of standard rent.-
(1) in the case of a building to which the old Act was applicable and which is let out at the time of the commencement of this Act in respect of which there is neither any reasonable annual rent nor any agreed rent or in any other case where there is neither any agreed rent nor any assessment in force, the District Magistrate shall, on an application being made in that behalf, determine the standard rent.
(2) In determining the standard rent the District Magistrate may consider--
(a) the respective market-value of the building and of its site immediately before the date of commencement of this Act or the date of letting, whichever is later (hereinafter in this section referred to as the said date);
(b) the cost of construction, maintenance and repairs of the building ;
(c) the prevailing rents for similar buildings in the locality immediately before the said date;
(d) the amenities provided in the building;
(e) the latest assessment, if any, of the building;
(f) any other relevant fact which appears in the circumstances of the case to be material.
[2-A) Subject to provisions of sub-section (2), the District Magistrate shall ordinarily consider ten percent per annum on the market value of the building (including its site) on the said date to be the annual standard rent thereof, and the monthly standard rent shall be equal to one-twelfth of the annual standard rent so calculated.]
A bare perusal of these provisions will show that under the Temporary Rent Control Act No. 3 of 1947 the rent was freezed at the level of 1940 and that in the present U.P. Rent Act No. 13 of 1972 has freezed the rent to those prevailing immediately before the date of commencement of the Act i.e. 15th July, 1972 or in case of a building let out subsequently, the rental value of the building on the date of letting.
There is virtually no provision for revision of rent as a result of inflation and rise in price of immovable properties except on account of improvement as defined under Section 3(n), or as a result of increase in taxes (Section-7); or in case of commercial buildings let out by public religious institutions (Section 9-A).
It would also be useful to take note of the provisions of other Acts which are applicable to the proceedings under the Act such as the Transfer of Property Act, Small Causes Courts Act, Civil Procedure Code and the provisions of Bengal Assam Act. A pre-view of the nature and kinds of tenancies, status of tenant after termination of tenancy, its consequence and whether enhancement of rent is the need of time or not is being given hereinafter before the conclusions.
It appears that the scheme of U.P. Act No. 13 of 1972 was not to delay the proceedings but was for resolving the dispute between the landlord and the tenant under various provisions of the Act within the time frame so that speedy remedy and justice is available. Its owned object to provide roof to the needy persons due to paucity of buildings, hence to achieve this object certain buildings were brought under the purview of Act.
A. Nature of Tenancies:
Protected tenancy: Protected tenancy is one, which is protected under Section 20(2) of U.P. Act No. 13 of 1972. In this type of tenancy the protection is only against eviction as per provisions of Section 20(2) of U.P. Act No. 13 of 1972 and not against termination of tenancy.
Unprotected tenancy: Unprotected tenants are those whose tenanted building is outside the purview of Act No. 13 of 1972 and their contract of tenancy is governed by General Law of Contract and dealt with under provisions of Transfer of Property Act.
Allotees and contractual tenancy:. There are other kinds of tenants also such as allottees under Section 16 of U.P. Act No. 13 of 1972 whose rent is either agreed between landlord and tenant or the rent is fixed by the District Magistrate under Sub-Section 9 of U.P. Act No.13 of 1972.
Contractual tenancy is a creation of contract vide explanation contained under sub-clause 9 of Section 19 of the Act. Section 16 of the Act deals with ''presumptive rent', which is with regard to provisions of Sub-section 2 of Sub-Section 2-A of Section 9 of the Act.
Rule 15(3) was also framed under the Act providing for disposal of release application within two months from date of presentation. Similarly Rule 7(7) was also framed under the Act, for the same purpose of speedy disposal of revision under Section 18 of the Act and appeal under Section 10 of the Act within two months and appeal under Section 22 of the Act within six months. In entire State of U.P. there may hardly be any case filed under Section 21 of the Act, which has been decided within the aforesaid limitation as provided in the Rules but the aforesaid provisions and the Rules have not been able to achieve the objects for which has led to the failure of the Act in U.P. and has given rise to multiplicity of proceedings.
B. Pecuniary jurisdiction: Under Section 25 of Begal,Agra, Assam Civil Court Act, applicable in U.P. read with Provincial Small Causes Courts Act, two sets of courts are contemplated for the purpose i.e. one dealing with pecuniary jurisdiction of only Rs. 5000/- of the level of Civil Judge, exercising the jurisdiction of Judge Small Causes Court and other of District Judge with unlimited pecuniary jurisdiction.
The Civil Procedure Code read with Section 20 of the Act is applicable and covers the cases between landlord and tenant Subject to order 50 C.P.C. though the entire C.P.C. is not made applicable by virtue of Section 34 of U.P. Act No. 13 of 1972, but only those provisions of C.P.C. are not made applicable for which provision is enacted in the Act itself. Section 20 of the Act contemplates rent, ejectment and damages while dealing with case under Section 21 of U.P. Act No. 13 of 1972. There appears to be no provision specifically enacted in the Act like as contained under Section 2(12) and order 20 Rule 12 C.P.C. hence C.P.C. to that extent will be applicable.
It may be noticed that Section 34 of the Act No. 13 of 1972 does not ouster of the applicability of CPC even in cases, which are either under Section 21 or 16 to 22 or the Act. It only makes the C.P.C. in applicable if a different provision is enacted in the Act or in the rules framed there under which is inconsistent with the provisions of C.P.C hence in order to meet the ends of justice the landlord is required to be compensated for either inaction of the Court or not granting relief in time as per the statutory time limit framed under the Act or for dilatory tactics adopted by party. The Court can therefore, pass order akin to provision of Section 2(12) of C.P.C. read with order 20 Rule 12 of the Code of Civil Procedure.
Rule 22 Sub Clause ''C' framed under the Act empowers the Court to award cost and special cost. If the cost is ascertained it will be with application of the provision of Section 21(12) read with order 20 Rule 12 C.P.C. Moreover, provision of rule 20(7) framed under the Act, further empowers the Court to make any order for ends of justice and/or to prevent the abuse of the process of authority concerned which covers all types of orders which can be passed in a suit, contemplated under Section 20 of the Act and is proceeded under the provisions of CPC.
Section 5 of Rent Act deals with only situation as on 15.7.1972 when Rent Act was enforced but not otherwise.
Section 5 of the Act deals with the enhancement of rent only for those buildings, which were governed by the old Act no.3 of 1947, which has been repealed now, and of no other building.
Section 9 of the Act is virtually pari-materia with the provisions of the proviso to Section 21(8) proviso of the Act, which says that the monthly rent in the cases covered by Section 21(8) of the Act will be 1/2th of the 10% of the Market Value of the property under tenancy."
Section 9-A deals with revision of rent of commercial building of which the landlord is public charitable or public religious institution and same formula has been adopted as contained under Section 9(2-A) and Section 21(8) proviso thereto. There is no other provision relating to enhancement of rent or control of buildings which are not commercial buildings or of which the landlord is not public charitable and religious institution.
Section 9(2-A) also provides that the monthly standard rent will be 1/12th of the annual standard rent. The annual standard rent will be 10%on the market value of the building, so there is nothing new to each of the clauses either Section 9(2-A) or Section 21(8) proviso of the same Act or Section 9-A of the Act.
C. Analysis of Quantum of Rent, Standard Rent And Procedure For Enhancement of Rent as provided under U.P. Act No. 13 of 1972:
Section 4 of U.P. Act No. 13 of 1972 imposes a bar upon the landlord to receive or take any premium or additional payment at the time of induction of tenant though it does not deal with quantum of rent as section 4(2) of Act provides that rent payable shall be the agreed rent between the landlord and tenant in absence the standard rent fixed as per the guidelines laid in Section 9 of the Act.
D. Status of Tenant After Determination Of Tenancy/Lease under the Transfer of Property Act:
The status of tenant, in a monthly tenancy is contemplated under Section 105,106 & 107 of the Transfer of Property of Act wherein it is provided that monthly tenancy starts from first day of month and shall come to an end on the last day of same month, thus monthly tenancy dies its own death by end of each month. By consent/ acceptance of rent by the landlord a fresh tenancy starts every month till end of the month. So long this consent and acceptance of rent by landlord continues the tenancy continues month to month.
Tenancy is creation of contract and termination of the contract of tenancy is permissible under Section 106 and 111 of the Transfer of Property Act.
There is no provision under Section Act No. 13 of 1972 or termination of a control over termination of tenancy. The tenancy of tenant is terminated under Section 106 of the Transfer of Property Act. The U.P. Act No. 13 of 1972 does not put any restriction upon termination of tenancy by landlord. It only imposes a bar on eviction in specified conditions i.e., if the matter after determination of the tenancy is not covered under Section 20(2) of the Act.
Even in matters of release the tenancy comes to an end after 30 days from date of passing of order by operation of law under Section 21(1)&(2) for release read with Section 21(6) of the Act.
The natural question in such cases then arise would that after determination of tenancy by landlord or otherwise and matter covered under Section 111 of Transfer of Property Act including Sub-Section (h) dealing with determination of tenancy read with section 106 of Transfer of Property Act.
The answer is that status of person whose tenancy has expired or terminated shall not be that of tenant. He may be an occupant only whose possession may be protected under any Act after termination of tenancy but the status of a tenant cannot be conferred upon him after determination of tenancy.
D-Consequence After Termination of Tenancy by Landlord Damages/ Compensation For Use of Occupation After Termination of Tenancy By Landlord.
That in view of Section 108 of the Transfer of Property Act, after ceassation and determination of tenancy by landlord, the tenant is bound to handover peaceful possession of premises to landlord.
In case of either protected or unprotected tenancy, the landlord may file suit for relief of eviction together with the mense profits. In event of determination or after ceassation of tenancy the mense profits are sought as against continuance of occupation of the premises by tenant.
In such a suit even when a decree of eviction is passed or refused, the tenancy stands determined, as there is no case of any agreed rent between the landlord and person whose tenancy has been determined thereafter. The question of agreed rent can only arise in case of continuance of tenancy and not on or after it determination as on date of suit there subsists no contract of tenancy. Hence there is no question of any agreed rent. The only relief available to the landlord after determination of tenancy provided is, the compensation or damages as against occupation after determination of tenancy.
In the Court of first instance i.e. JSCC; therefore, the Code of Civil Procedure applicable by virtue of Section 4 of the Code. The Court of JSCC is bound to act in conformity of the provisions of Section 2(12) C.P.C. defining " mense profits" and order 20 rule 12 CPC for granting mense profits. " Mense profits as per Section 2(12) CPC are those profits which the person in wrong full possession of such property received or might have received there from with ordinary diligence together with interest of such profits."
Since the Rent Control Act does not contain any alike provision for fixing of quantum of rent in absence of agreed rent. It becomes the duty of the Court to grant mense profits even though they are not asked for in order to meet the ends of justice provided enquiry is made under Order 20 Rule 12 C.P.C. before passing the decree. Covering the period prior institution of suit till the delivery of possession for ascertaining the mesne profits. This power and duty is imposed by CPC by order 20 Rule 12 dealing with mense profits. The provision of Section 9(2-A) read with pari materia provision of Section 21(8) and Section 9 (A) of U.P. Act No. 13 of 1972 are to be given effect to which appears to be logical and equitable.
Coming to question of enhancement of the amount payable by the tenant it may be noticed that in so far it continues under Section 104 of Transfer of Property Act, it remains a transferable right of the tenant except in certain exceptions under the Rent Control Act by which certain persons have been excluded from the definition of family to enjoy the property for a certain time, on consideration of price paid or promised to be paid in terms of money or in any other form, to be rendered periodically. After cession of tenancy neither there exist right of tenant to enjoyment over the property, nor there is any question of agreed rent, than in such a situation the amount payable under such a situation has to be determined by the Court of first instance and at later stage, following the same formula as contained under Section 9 of U.P. Act No. 13 of 1972 which in conformity with equity, equal protection of laws, good conscience and public policy.
On the date of suit except for purpose of eviction, the tenant loses his contract and identity/status as tenant though he happens to be occupying the premises on account of procedural delay. The rights of the landlord are therefore crystallized on the date of suit. Procedural delay in disposal of suit cannot adversely effecting his rights.
The statute provides the modus of fixation of standard rent of tenant under Section 9 of the Act but in those cases where there is total absence of any agreed rent on the date of suit cognizable by JSCC, or its continuance, therefore, there is no question of any agreed rent as provided in Section 9 read with Section 9(2-A) of the Act.
The Court, therefore, has to mould the relief on account of delay and development i.e. provide for the losses of the landlord by passage of time in accordance with law for continuance of such a person whose status of tenant has ceased.
Though the U.P. Act No. 13 of 1972 may be a beneficial legislation, it does not mean that it has to be read only in favour of the tenant. Once the legislature has legislated the Act it is to be presumed that the Act is balanced one and that legislature in its wisdom has removed all the social evils prevalent to achieve the object of the Act. Enactment of beneficial legislation is totally different. From the provisions of the Act, which are supposed to be balanced by the legislature, hence U.P. Act No. 13 of 1972 can not be read either in favour of the landlord or in favour of the tenant as it provides rights, liability and obligation upon both the tenant and the landlord. The law has to be interpreted according to the intention of the legislature and inconsonance with the needs of the time. As stated earlier 50% would not be reasonable rent in the present circumstances as it would not be even sufficient to meet the maintenance or cost of the building under the tenancy of the tenant or even for payment of taxes etc. as the landlord invests heavy amount in constructions of the building or purchase thereof. His family circumstances may change and he may need the accommodation for his own. It does not mean once the tenant has been inducted he can only be evicted through court of law or he can be evicted by giving premium. The purpose of the Act is to restrain the landlord from increasing the rent of the accommodation in dispute arbitrarily and eviction of the tenant in emergency though the legislature has taken care of it and provide grounds for eviction also under the Act. Therefore, the Courts have to strike the balance between the need of the landlord and tenant.
E. Enhancement of rent :
The U.P. Act No. 13 of 1972 is silent in so far as enhancement of rent of a private building is concerned. Inspite of directions of this Court in Milap Chand Jain and in the case of Bal Krishan referred and discussed in the body of the judgment no provision has been made by the legislature in this regard. The High Court as well as
Since there is no provision for enhancement of the rent in the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 in respect of a private building. Section 21(8) of the Act applies to enhancement of rent of a public building or any other remedy available to the landlord to mitigate his grievance his only remedy appears to be under extraordinary jurisdiction under Article 226/227 of the Constitution. This Court in the cases of Milap Chand Jain as well as in Ganga Prasad had expected from the legislature to fill up this lacunae but nothing has been done so far. This has led to anomaly regarding fixation of rent of private and public building. For example if a building is given on rent of Rs.50/- per month in 1955-56 there being no provision for enhancement of the rent even in the year 2006-07 whereas the rate of rent of the building has increased many folds. A tenant of a private accommodation who has taken the building on a very low rent does not want to leave it even though he has built his house as in the present case nor want to pay the enhanced rent as the law is silent in U.P. Act No. 13 of 1972. The result is that the litigation under the U.P. Act No. 13 of 1972 has increased many folds and there is frivolous litigations.
............ As rent has not been defined in the U.P. Act No. 13 of 1972. Therefore, it must be taken to have been used in its ordinary dictionary meaning.