Arrears of Rent S. 11 (2)

11 (2) (a) A landlord who seeks to evict his tenant shall apply to the Rent Control Court for a direction in that behalf.
(b) If the Rent Control Court, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied that the tenant has not paid or tendered the rent due by him in respect of the building within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement by the last day of the month next following that for which the rent is payable, it shall make an order directing the tenant to put the landlord in possession of the building, and if it is not satisfied it shall make an order rejecting the application thereof by him:
Provided that an application under this subsection shall be made only if the landlord has sent a registered notice to the tenant intimating the default and the tenant has failed to pay or tender the rent together with interest at six percent per anum and postal charges incurred in sending the notice within fifteen days of the receipt of the notice or of the refusal thereof.
(c) The order of the Rent Control Court directing the tenant to put the landlord in possession of the building shall not be executed before the expiry of one month from the date of such order or such further period as the Rent Control Court may in its discretion allow; and if the tenant deposits the arrears of rent with interest and cost of proceedings, within the said period of month or such further period, as the case may be, it shall vacate that order.

1. Object

A tenant is under an obligation to pay or tender the rent in respect of the building under his occupation within 15 days after the expiry of time fixed in the agreement of tenancy or in the absence of such agreement by the last day of next month falling for which the rent is payable. Nonpayment of rent, as per contract and statutory provisions, entitles the landlord to seek possession after sending a registered notice to the tenants intimating the default. If after the receipt of such a notice a genuine tenant pays or tenders the rent together with interest at 6% per annum and postal charges, the right accrued to the landlord to get possession on this ground can defeated. Even after passing of the eviction order, a further right is conferred upon tenant to deposit the rent in arrears under clause (c) of sub-section (2) of section 11. The law requires the tenant to be dispossessed if he fails to pay the arrears even after 30 days of passing the final order, and any extension of time thereof. The tenants who have failed to pay the arrears of rent at all the three relevant times were not entitled to any discretionary relief under Article 227 of the Constitution of India.

2. Scope
Nonpayment of rent as a ground of eviction is a very weak ground as the statute provides payment of arrears at various stages to avoid any order of eviction being executed. The petition for eviction filed under this provision gets an order for the arrears mentioned in the notice only. The arrears accrued during the process of litigation is not taken care of in the section. For such arrears either the landlord has to file another petition or resort to section 12 of the Act. Although the rent is the consideration for the contract of lease, the legislature provides very little remedy against the defaulting tenant.
The Act does not provide a provision for allowing the landlord to realize the rent arrears. But the Rent Control Court can order to pay costs up to the amount due as rent arrears. There is no scope for passing money decree for recovery of arrears of rent. The execution petition seeking recovery of arrears of rent per se will not be maintainable.

3. Conditional Order
Order of eviction under section 11 (2)b is a tentative order liable to be vacated under section 11 (2) c. Even a formal application is not necessary under section 11 (2) c, just a memo or statement would suffice to vacate the order.
Eviction on the ground of arrears of rent is not absolute orders, they are conditional orders. It can be vacated by an application under S.11(2)(c) by the tenant.
Eviction order passed under S.11(2)(b) of the Act not to be executed before expiry of the period limited and the same to be vacated on deposit of arrears within that period.
Part payment of rent makes the tenant a defaulter, for he has to make full payment. Sum deposited by tenant falling short of rent due towards first default. The deposited sum cannot be adjusted against the second and third defaults as has been done by the Courts below. The tenant is not entitled to protection.

4. Rent
The court cannot take upon the duty of deciding “reasonable rate of rent payable in respect of the premises” and substitute the same for the rent due by the tenant as mentioned in Section 11(2) b.
A person who got assignment of the building has no right to claim eviction on the ground of arrears of rent which fall due before his assignment unless the right to collect arrears of rent has also been assigned to him by the same document.
Rent is the consideration in lieu of enjoyment of property payable upon accrual of periodical liability.
Landlord was a partner, and on dissolution of the firm the landlords claim of arrears up to the date of dissolution was considered as debt as per the partition deed. There after the landlord cannot claim the arrears under section 11 (2) b. It is only a debt.
When the landlord and tenant agree that the latter is liable to pay rent as well as the municipal tax for the building it is not possible to hold that the stipulation for the payment of municipal tax contravenes is aginst the Rent Control Act.
5. Period of arrears
The Rent Control Court is entitled and has got jurisdiction to pass an order on the basis of rate of rent or period of the arrears as stated by the tenant if the landlord failed to prove his case reagarding these two factors.
Landlord was a partner on dissolution of partnership settlement was executed by the partners on 16/10/1999 and shop rooms have been partitioned among partners. Landlord’s right to claim arrears of rent is controlled by terms of settlement. Arrears prior to 16/10/1999 can be considered as debt for which landlord is not entitled to seek eviction under S.11(2)(b).

The rent is merely a debt. Therefore, whatever might have been due prior to deed of lease could not constitute arrears of rent. It was mere actionable claim.

6. Error in Notice
Error on the quantum of rent is of little consequence while quantifying arrears for the purpose of passing orders. The intimation to the tenant that there is default in payment of rent only is relevant.
7. Civil Suit
Civil Courts jurisdiction to decide question of arrears of rent is not ousted by virtue of Section 11 (2) of the Act. A tenant can be evicted for arrears of rent only under 11 (2) of the Act but the Civil Courts jurisdiction to decide question of arrears of rent is not ousted by the said provision.
The rent arrears is an actionable claim which can be transferred by the landlord.
Section 3 of the T.P. Act defines actionable claim:

8. Rate of interest in civil suit
Section 11 (2) b specifies for 6% interest for arrears. But in a suit for realization of rent, the plaintiff can claim for interest at reasonable rates according to the respective nature of use of the building as commercial or residential. With regard to the rate of interest on the claim for money due as rent arrears in civil suits Section 34 of the CPC has to be prevailed. A tenant is bound by the statute to pay interest at the rate of 6% p.a. over the defaulted amount of rent. Any contra stipulation in the rent deed has no bearing over the provision. Nevertheless in civil suits the landlord is entitled to recover interest on the arrears of rent on the basis of rent deed.

9. Condition for eviction
Arrears of rent is a ground adopted from Transfer of Property Act Section 108(L) and incorporated in Kerala Buildings (Lease and Rent Control) Act to evict a tenant. To constitute that ground for eviction the landlord has to send a registered notice to the tenant intimating the default and the tenant has failed to pay or tender, the rent due together with six percent interest and postal charges incurred in sending the notice within fifteen days of the receipt of notice.

The cause of action arises when landlord sends the above-mentioned notice and 15 days have to be elapsed without payment or tendering the amount due by the tenant.
Rent Control Court has got jurisdiction under S.11(2)b to adjudicate rate of rent, period of arrears etc as stated by the tenant, if the court finds that landlord failed to prove his case on this issue.

10. Defenses
For a petition for eviction on the ground of Arrears of rent under section 11 (2),
(i) Deny the rate of rent and period of arrears so that landlord has to prove both these aspects.
(ii) Deny the service of notice, because the service of notice is a mandatory condition.
(iii) The tenant can take the defense that the building does not belong to the petitioner and thus deny the title of the landlord. Though the landlord cannot evade the Rent Control Act the tenant can evade the summary procedure prescribed in the Rent Control Act by just denying the title of the landlord. The landlord has to go to the Civil Court and there too the tenant gets all the protection of the Rent Control Act. The landlord has to prove the ground under the Rent Control Act in the civil court also, after proving his title, the tenant is not deprived any of his right by denying the title of the landlord.
(iv) Apply for extension of time for payment of arrears, this extension of time can be given according to the discretion of the court and there is no limit.
(v) After all the procedure, i.e. Appeal and revision, deposit the arrears within 30 days of last order. This deposit need only for the original arrears as per the petition, the arrears accrued during the petition need not be deposited, in order to avoid eviction.
The conduct of tenant in the proceedings cannot be taken against him when deciding the case on merit. Any of the ground under this Act is to be proved to evict the tenant. Order must be in terms of the provisions of the Act.
Payment of substantial amount by tenant towards construction cost of building and expenditure for improving the building for the purpose of business is a valid defense for ground of eviction under S.11(2)(b.

11. Service of Notice
Fifteen days after the receipt or refusal of the notice by the tenant, the landlord can make an application to the Rent Control Court to evict the tenant. If the Rent Control Court is satisfied that the tenant has not paid the rent due by him within 15 days after the expiry of the period fixed in the agreement of tenancy and in the absence of any such agreement, by the last day of the month next following that, for which the rent is payable (e.g. Rent for the month of February is in arrears on 31st day of March) the court shall make an eviction order. This eviction order is a conditional order and will be kept in abeyance for one month or such further period as the Rent Control Court may in its discretion allow and if the tenant deposits the arrears of rent with interest and cost of proceedings within the said period the court shall vacate the order. The Rent Control Court can extend the period at its discretion for such other period.
Heirs are joint tenants. Notice to one of the joint tenant is sufficient and the petition maintainable. Notice issued in earlier petition is not sufficient for institution of subsequent proceeding for eviction on arrears of rent.

The legal heirs of the original tenant are joint tenants and not co-tenants. The lawyers notice issued to the original tenant satisfies the requirement under the Proviso to section 11(2)b.

On admission by tenant, Rent Control Court passed an order of eviction on the ground of arrears of rent and granted the tenant a month’s time to deposit the arrears. Tenant failed to deposit the arrears. An appeal filed by the tenant against the order is not maintainable. Tenant cannot be said to be aggrieved, within the meaning of section 18, by an order based on consent.
The amount which the tenant is liable to deposit for the purpose of S. 11(2) is only the rent due at the time of notice and that the Landlords remedy for rent subsequently falls due will be to invoke S. 12 of the Act.

Every tenant is obliged to pay or tender rent to the landlord within 15 days of the month to which the rent relates. The purpose of advance rent is to protect the landlord from the unscrupulous tenant who may run into arrears and vacate the premises and comfortably walk away with arrears The advance rent is available for adjustment or is liable to be refunded at the time of vacating of the premises except where the law or the contract between the parties provides to the contrary.
Landlord borrowed an amount from tenant for construction of tenanted premises. The terms of the agreement definitely casts an obligation on the tenant to pay rent in respect of the premises occupied by him. Rent Control Petition for eviction is maintainable as a landlord – tenant relationship exists between them. Consequently, the provisions of the Rent Control Act are applicable.
Act II of 1965 does not take the civil court’s jurisdiction for recovery of arrears of rent away. The decision in the suit and appeal will be binding on the petitioner.
The Act does not provide a provision for allowing the landlord to realize the rent arrears. But the Rent Control Court can order to pay costs up to the amount due as rent arrears.

12. Rent advance
Where the arrears of rent is smaller than advance amount held by the landlord on account of the tenant, there is no default of rent. Hence if the tenant has evidence of deposit or advance he need pay rent after the deposit is exhausted.
The landlord can get advance from the tenant as security to be returned to the tenant on vacation of the premises. The landlord on his own volition may adjust the advance amount towards arrears of rent but the tenant cannot insist that the landlord should adjust the advance towards rent arrears. The tenant cannot adjust the advance rent towards arrears of rent on his own volition.

13. Value of improvements

Value of improvements made by the tenant on the building cannot be considered by Rent Control Court. Value of improvements made by the tenant cannot be raised in a rent control proceeding even if done with the knowledge and consent of the landlord.
Tenant invested substantial amounts towards improving the building with the consent of the landlord. Unless and until the amount expended towards improving the building is paid back, the landlord is not entitled to seek eviction.

14. Rent Arrears and Limitation Act

The court’s order to vacate will come into effect or crystallize as resjudicata depending upon the action of the tenant. If the tenant deposits the arrears after the judgment is pronounced within the time stipulated the order of the court becomes inoperative. If he fails to deposit or tender the arrears then the order can be executed by evicting the tenant. The reason behind the section is not to secure the benefits of rent to the landlord if the tenant occupies the building, but to protect the tenant from eviction even if he is a defaulting tenant. The primary right of the landlord to get the quid pro quo is uncared for by the Act.

Under S.11 (2) (b), order of eviction can be passed only on satisfaction that the tenant has not paid or tendered the rent due. But the arrears contemplated in S.11 (2) (c) for vacating the order include not only the arrears recoverable through a court of law, but also time barred arrears.
Limitation Act is applicable to the amount due as arrears of rent, but if the tenant wants to continue in the building as a tenant, he has to pay all arrears of rent irrespective of limitation period. But if the tenant vacates the building the landlord can recover the arrears of rent that is within the limitation period by way of a civil suit.

15. Maximum time for disposal Rule 7 (5)
Rule 7 (5) of The Kerala Buildings (Lease and Rent Control) Rules, 1979
Rule 7 (5) Every application for eviction under clause (a) of sub-section (2) of section 11 of the Act, shall as far as possible, be disposed of within a month from the date of filling of the application and if the tenant does not hand over possession within such time as may be specified in the order, the Rent Control Court may take possession of such building by forceful eviction and handover the same to the applicant.

The principle behind the fixation of time limit is that the landlord’s important right to get the rent should be preserved. In the case of arrears of rent no separate execution petition is to be filed, the Rent Control Court itself can take possession of such building by forceful eviction and handover the same to the applicant, if the tenant is neither paying rent nor handing over the possession of the building within the time specified in the order. This rule has got little significance on the light of Section 11 (2) c. This rule is just an eye washer, to cover-up the harsh realities embedded in the Act.
The Rent Control Authorities have the power to extend the time originally granted for the deposit of arrears of rent confirmed in appeal. The Rent Control Court has got the discretion to allow time more than once to the tenant to pay arrears of rent with interest and cost of proceedings under S.11(2)(c) after the expiry of statutory period of one month.

16. Execution
Execution court does not have the right to order restitution under S. 11(2) c. When an order under section 11 (2) (b) is put in execution the execution court is not empowered to receive evidence as to whether arrears of rent, interest or cost has been paid or not.

17. Subsection (c ) and enlargement of time

Eviction on the ground of arrears of rent was allowed. Extension of time was granted once. Rent Control Court has got no power to grant further extension of time after the expiry of the time granted earlier. (Overruled by Karthyayani v. S.N.D.P. Sakha Yogam 2004 (3) KLT (FB))

The Rent Control Court can allow time more than once to the tenant to pay arrears with interest after the expiry of statutory period. Either the Act nor the courts do not recognize or respect the right of the landlord to get even the rent which is the consideration for the rental agreement.
Section 5 of the Limitation Act, 1963 is not applicable where there is a default in depositing the rent by the tenant. The provisions of Section 5 of the Limitation Act must be construed having regard to Section 3 thereof. For filing an application after the expiry of the period prescribed under the Limitation Act or any other special statute a cause of action must arise. Compliance of an order passed by a Court of Law in terms of a statutory provision does not give rise to a cause of action. Instant consequences are provided for under the statute, when there is failure to comply with an order passed by a Court of Law. The court can condone the default only when the statute confers such a power on the Court and not otherwise. In that view of the matter we have no other option but to hold that Section 5 of the Limitation Act, 1963 has no application in the instant case.
Power to enlarge time in the matter of making requisite deposit under S. 11 (2) c is discretionary, it has to be exercised judiciously on sound legal principles and judicious manner on the basis of facts and circumstances. Whenever discretionary power is exercised courts often taken into account the general equities of the given case. It can be exercised more than once.

The power of the court has also been limited to the extent that it can extend time for such deposit not exceeding three months and so far as the deposit of monthly rent is concerned, by fifteen days. The court’s power, therefore, is restricted. In case tenant deposits the provisional rent as determined by the Court within stipulated period the tenant is relieved by the eviction decree.

Special leave petition is allowed and Supreme Court modifies or reverses the decision of the lower Court. The Supreme court’s decision is operative. Tenant gets benefit of S.11 (2) (c).
Arrears of rent deposited after dismissal of Original Petition filed under Article 227 within 30 days. The tenant is entitled to benefits under section 11 (2) c. 1991 (2) KLT 316 overruled.
Sub tenants cannot resort to S.11 (2) (c) of the Act to get an order u/s 11(2) of the Act.
The order of eviction, if passed against a tenant shall attain finality after the decision of the appellate authority or at the most after the decision of the revisional authority as contemplated under section 20 of the Act. If an order of eviction has been passed under section 11 (2) of the Act, the said order and direction shall become executable after the expiry of one month from the date of the final order passed by the rent control court, the appellate court or the revisional court, as the case may be, subject, however, to the extension of time granted by the aforesaid courts and authorities in terms of clause (c) of sub-section (2) of section 11. Proceedings under Act 227, not being extension of the proceedings under the Act would not automatically authorise the Court to extend the time.

How to evict a tenant and various grounds of eviction

Rent Control Act with Rules

Own use and Occupation

A landlord may apply to the Rent Control Court for an order directing the tenant to put the landlord in possession of the building if he bona fide needs the building for his own occupation or for the occupation by any member of his family dependent on him.
Provided that the Rent Control Court shall not give any such direction if the landlord has another building of his own in his possession in the same city, town or village except where the Rent Control Court is satisfied that for special reasons, in any particular case it will be just and proper to do so:
Provided further that the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building and there is no other suitable building available in the locality for such person to carry on such trade or business:
Provided further that no landlord whose right to recover possession arises under an instrument of transfer inter vivos shall be entitled to apply to be put in possession until the expiry of one year from the date of the instrument:
Provided further that if a landlord after obtaining an order to be put in possession transfers his rights in respect of the building to another person, the transferee shall not be entitled to be put in possession unless he proves that he bona fide needs the building for his own occupation or for the occupation by any member of his family dependent on him.

1. Object
Another ground provided to the landlord to evict his tenant is for his own occupation or for the occupation by any member of his family dependent on him. The bonafide need of the landlord is to be proved and the burden of proof is on the landlord. The Act is basically conceived in the interest of the tenants protecting them from being evicted illegally and arbitrarily. Therefore the onus is heavy on the landlord to establish the bonafide requirement.
The right of the tenant to occupy the property belonging to another person cannot be put above the ground of own requirement of the landlord. The landlord is entitled to get an order of eviction when the conditions imposed by the Act are satisfied.
There are four provisos for this section mentioned along with the relevant section and there is another proviso incorporated in the Act in section 11 (17) each of these five provisos restrict the landlord’s right to get the building for his own occupation. The provisos protect the tenant from eviction under certain circumstances. The circumstances are;
i. The Landlord has another building in his possession
ii. The tenant is depending on the business conducted in the building for his livelihood.
iii. there is no other building available in the locality for conducting the business of the tenant.
iv. Landlord got right of possession within one year
v. Tenancy commenced after 1940
vi. Tenancy period is over.

The provision of the statute cannot be stretched to such an extent that every claim put forward as bonafide need is preordinated to culminate in an order of eviction. The court is to rest its decision on totality of the circumstances. The concept of bonafide personal necessity should be meaningfully construed so as to make the relief granted to the landlord real and practical. Question of bona fides is certainly relevant not only in S.11(3) and S.11(8) but also in S.11(7).
The cause of action for eviction of several tenants occupying different portions of the same building on the ground of S.11(3) is a common or joint cause of action, a single petition is maintainable, especially when no prejudice is caused to tenants.

2. Own occupation
The provisions in this Act enabling the landlord to get possession of the building for own occupation is in public interest, for if the landlord is to be always excluded from occupying his house, persons with money will never invest in houses.
Even if the use may be intermittent or seasonal in nature the landlord cannot be denied his right under section 11 (3). The word “reasonable”, connotes that the requirement or need is not fanciful or unreasonable. The word “requirement” coupled with the word reasonable means that it must be something more than a mere desire but need not certainly be a compelling or absolute or dire necessity. It may be a need in present or within reasonable proximity in the future. A landlord need not lose his existing job or resign from it or reach a level of starvation to consider about getting possession of his premises for establishing a business.
It is for the landlord of the building to decide whether it needs reconstruction or whether he should have it for his purpose. It is his property; and he is the best judge on that matter. If a claim is made by the landlord for possession of the building on such a ground, Rent Controller, is not entitled to say that the landlord need not have it for reasons of his own. All that he is entitled to do is to enquire whether the need is bona fide, or whether it is only a pretext to evict a tenant. The right to reconstruct a building or to have it for the landlord’s own purposes is a very valid right attached to the property.

3. Landlord under section 11 (3)

According to the wide definition of “landlord” the building owner himself need not be the landlord. But for the purpose of this sub-section the ownership of the building has to be vested with the landlord. Further trustee landlord can apply under this section, but an agent-landlord cannot.
Though the definition of the landlord is couched in a very wide language, the landlord who is an owner and who would have a right to occupy the building in his own right alone can seek possession for his own use. Company which is a juristic person is also entitled to claim eviction under S.11(3) of the Act.
Requirement of the building for use of the company in which the landlord is a director cannot be considered as bonafide requirement of landlord.

4. Bonafide need
The main condition to be satisfied for an eviction under this sub-section is that the need of the landlord for own occupation is bonafide. For proving the bonafides the landlord may bring evidence of his necessity, desire, the preparations made by him for using the building for his proposed need. The circumstances would show the need is bonafide or not.
The landlord must prove that he genuinely requires the accommodation for the purpose of his own use. The mere desire of the landlord is not sufficient. The finding that the landlord bonafide required the premises for own occupation is one of fact. Bonafide requirement is a question of fact. Just an expression of desire would not entitle the landlord to get a decree for eviction
A bonafide requirement must be an outcome of a sincere and honest desire in contradistinction with a mere pretext for evicting the tenant on the part of the landlord claiming to occupy the premises for himself or for any member of the family which would entitle the landlord to seek ejectment of the tenant. The question to be asked by a judge of facts by placing himself in the place of the landlord is whether in the given facts proved by the material on record the need to occupy the premises can be said to be natural, real, sincere and honest. The concept of bonafide need or genuine requirement needs a practical approach instructed by the realities of life. In Deena Nath v. Pooran Lal (2001 (5) SCC 705) this Court reiterated that bona fide requirement has to be distinguished from a mere whim or fanciful desire. The bona fide requirement is in praesenti and must be manifested in actual need so as to convince the court that it is not a mere fanciful or whimsical desire.

It is unnecessary to make endeavour as to how else landlord could adjust himself. The fact that there is cordial relationship between land lady and her daughter-in-law or that she is comfortably residing in present building are not relevant. When a landlady who is living with her own family with her parents thinks that she should have an independent and separate establishment, normally it is a most justified claim. The question whether the son should reside separately after the marriage is a matter, which exclusively depends upon the attitude of the son and Parents it is not always necessary that there should be difference of opinion or quarrel to justify a separate residence.
Persistent demand or even compulsion on the part of the landlord for procuring early eviction does not show that the need projected by the landlord is not genuine. Nature of businesses of the landlord proposes to conduct is a matter of evidence and lack of specific pleadings is not very material. Financial capacity of the landlord is a circumstance that favours the desire to start a business and not a fact against the landlord. The pleading regarding bonafide need should be specific a vague, hazy and indefinite pleading regarding the purpose for which the building si required will result in gross prejudice to the tenant.
Attempt by landlord to sell away the tenanted premises to the tenant is not fatal to the plea under section 11 (3).
It is not for the Rent Control Court to decide whether the house is suited to the requirement of the landlord or not. If the bona fide requirement is established, then the absence of facilities or lack of ventilation, air etc. is not very material as it is for the landlord to live in his own house with all its defects and faults. Landlord is the best Judge of his requirements. The Courts have no concern to dictate how and in what manner he should live. It is for the Landlord to decide what modifications has to be made in the building for the residential purpose and the tenant cannot say that it is not suitable for residential purpose of the landlord.
A building used for a non residential purpose can be claimed for residential purpose of the landlord. It is for the landlord to decide in what manner the space is to be utilized and what are the modifications or additions, alteration etc. have to be made in the building. The tenant cannot dictate in what manner the landlord should make use of the building. It is the landlord who decides as to how the building could be put to their beneficial use. Landlord is the best judge of his requirement, courts cannot dictate how and in what manner landlord should live. It is trite that, it is not for the tenant to dictate to the landlord how to satisfy his need. When the landlord has a sufficiently spacious room owned by it, there is nothing wrong in the landlord wanting possession of the said room for its need.

Gift deed executed only to evict the tenant on facts it was proved to be sham document. There is no bonafide need.
If the need put forward is bonafide, the fact that the pathway made after demolition of the building would be used by others and landlord or by his tenants, will not take away the need. Eviction sought for by the landlord of the tenanted premises so as to use it as a pathway for the proposed multi-storied building will come within the scope of Section 11 (3) and not under 11 (4)1V. Building needed bonefidely to be demolished to make a pathway to buildings belonging to the landlord which are in occupation of landlord’s tenants is a bonafide requirement. It is for the landlord to decide through which portion he is to provide a way to the rear side of the building. The tenant cannot dictate to the landlord that the pathway should be through another portion. The recovery of site of the building for the purpose of the new construction can be said to be coming within the meaning of section 11(3). Landlord intending to demolish the existing building and put up a new building for his own use, the ground is under section 11 (3) and not one under 11 (4)iv. The need under section 11 (3) will encompass need including demolition and using the space for the landlord’s use. The site of the petition schedule building does not form the area where the proposed construction is to be had. The petition schedule building is to provide the main entrance from the State Highway and that if only the petition schedule building is demolished and removed the materials can be taken to the property for construction of the building. It is not at all possible for the landlord to construct the building, without removing the scheduled building. The need is a genuine bonafide need.

Putting the building to better use is a bonafide requirement. The landlord claimed too many purpose. That itself does not negative the bonafides of the landlord.
The personal necessity envisaged under the Act would include repossession of the demised premises by the landlord for the purpose of its demolition so as to widen the entrance to another building belonging to the landlord in the immediate vicinity.
The tenant cannot dictate the terms to the landlord and advice him what he should do and what he should not. It is always the privilege of the landlord. It is for the landlord to decide whether the space is sufficient for the need. Tenant cannot have a dictatorial role in that assessment of the landlord. Sale of other rented premises is not a ground for holding that the landlord has not proved that he required the building for his own occupation. Tenant cannot decide or dictate whether the building is suitable for the use of the landlord. The tenant cannot dictate to the landlord regarding his need or choice of the building.

Claim of landlord that he needs the building bonafide for his personnel occupation cannot be negatived on ground that building requires repairs and alterations before landlord can occupy the same.
The construction of another building is a bona fide need of the landlord and the petition schedule building is sought to be demolished to provide exit for the proposed building and thereby eviction sought can be styled as one for reconstruction, the landlord has no need to occupy the entire reconstructed building. Such being the factual background, the landlord is entitled to seek an order of eviction only under S.11(4)(iv) and not under S.11(3).

If the application is both under S.11 (3) and 11 (4) iv; the circumstance that the building requires reconstruction for the purpose of own use does not affect or alter the bonafide nature of the landlord’s need under Section 11 (3) (See note ‘Sec 11(3) and Sec 11 (4) iv’ under Section 11 4 (iv))
The periodical requests for enhancement of rent as such are not a ground to hold that there is no bonafides in the plea for eviction. The mere fact that landlord demanded higher rent on previous occasions which the tenant declined to oblige is not a reflection of any oblique motive on the part of landlord claiming eviction on the ground of his own need to occupy the building. It is only normal propensity of a landlord to desire increase in the rent for this building from time to time. Such a desire expressed is not a mark of misconduct in landlord-tenant relationship. No presumption of malafides can be drawn just because the tenant declined to increase the rent demanded by the landlord. Demand for increased rent is not a bar for claiming eviction on the ground of bonafide need or any other ground. Demand for periodical increase in rent cannot be so unreasonable and unjust so as to deny an otherwise just and genuine claim for vacant possession. Landlord asking for more rent will not affect the bonafides of claim under section 11 (3).
The bonafide requirement of the landlord should be objectively tested but the landlord need not establish that it is a dire need. In order to constitute Bona fide requirement there must be an element of need as opposed to a mere desire or wish of the landlord.

Eviction ordered on the ground that landlord required the premises bonafide for the purpose of business after demolishing the present building and putting up a new building in place. Since the order of eviction is based mainly under section 11 (3) the obligation to provide accommodation to the tenant in the new building will not arise.
The mere fact that the Landlord had constructed a building in another property and rented it out to another tenant by itself is not a ground to hold that there is no bonafide. Giving some other premises on rent prior to the institution of petition does not lead to a presumption that there was absence of bonafides in a petition under section 11 (3). The need of dependent family member must also be shown to be bonafide. Possessions of other buildings by these dependents are to be considered. Shifting of residence after the petition is not a ground for rejection of petition. The appellant living in a room of the huge building which does not exclusively belong to him, cannot be said that his requirement to occupy the premises for his residence and professional requirements is not reasonable and bona fide.
The eviction was sought on the ground that the premises were required for starting some business. The particulars of the trade were not given in the pleadings. Held that the precise nature of the business proposed to be conducted is not required to be stated in the pleading and that is a matter for evidence.
Landlord is not bound to disclose the details of his bonafide need and inconvenience experienced by him. Landlord was forced to surrender the building he was occupying to KFC. The landlord needs to get his tenanted building is bonafide.
While assessing bonafide need of the landlord court need not consider landlord’s social status, which prohibits him to start a ‘C’ class shop. Discontinuance of the business by the landlord for a temporary period cannot prohibit him from claiming the benefit to his favour.

It is for the landlord of the building to decide whether it needs reconstruction or whether he should have it for his purpose. It is his property; and he is the best judge on that matter. If a claim is made by the landlord for possession of the building, Rent Controller, is not entitled to say that the landlord need not have it for reasons of his own. All that he is entitled to do is to enquire whether the need is bona fide, or whether it is only a pretext not to lease out the building or to evict a tenant, as the case may be. The right to reconstruct a building or to have it for the landlord’s own purposes is a very valid right attached to the property.
Requirement of landlord is to be established as a genuine and bonafide need and not a pretext to get the tenanted premises. Heavy burden would lie on the tenant to prove that the requirement of the landlord is not genuine. Hence, mere assertion on part of tenant will not be sufficient to rebut the strong presumption in landlord’s favour.

There is no obligation on the part of retired Catholic Priests to reside in common residences provided by the Church. In any case residence in such common house cannot be termed as a matter of faith. The Priests may or may not choose to avail of any such facility which may be provided by the Church. Therefore the need set up by the landlord to retire and to live in the petition schedule building cannot be termed as a irrational need or a ground set up merely for evicting the tenants.

5. Right of Choice
The landlord is entitled to choose the building suitable for his purpose. if there are two or more premises the landlord could choose which one would be preferable to him or her and the tenant cannot question such preference. Power of landlord to pick and choose a particular room from among several tenants cannot be questioned in the absence of an oblique motive.

6. Landlord’s experience to do business

Fact that the landlord is a retired person and has no experience in business does not prevent him from starting his own business. Previous experience is not a precondition for seeking eviction on the ground of bonafide need to conduct business. Lack of experience of the landlord to run the business is not a bar to allow eviction on the ground of own use.
It need not be shown that landlord has know how for starting business. If a person wants to start new business of his own it may be to his own advantage if he acquires experience in that line. Experience can be earned even while the business is in progress. Lack of experience of landlords to run the business, is not a criterion to deny the landlord his building for own use.

Petitioner being a partner of a firm would enable him to evict the tenant for the need of the firm. Question of making arrangement for starting a business in a rented building can arise only after the owners gets possession of the building.

Law does not require that impeanious (poor) Landlord alone can think of starting an income generating activity in order that need set up will pass through the test of bonafide. Law does not insist that a Landlord having other source of income shall not carry on another income earning activity or venture to start a new business.
Examination of Power of attorney holder is not sufficient to prove the bonafide of the landlord. The landlord has neither established his need for own occupation nor that the need alleged was bonafide.

7. Dependent
Mother gifted the building to her daughter and continued to receive rent but it is insufficient to sustain the maintainability of petition for eviction. Previous written consent is necessary. Mother cannot ask for eviction of the tenant for her bonafide need. Or the mother should prove that she is depended on her daughter.
Non examination of dependent son of the landlord is not fatal to a petition for own use and occupation of the son. In order to assess whether the landlord bonafidely or genuinely requires a building can be assessed by court only by examining the landlord or the dependent son. The need for occupation of a dependent of the landlord can be proved on evidence of the dependent as witness.

Dependency does not mean financial dependency. There must be sufficient pleading that they are dependent upon the landlord so that the tenant could disprove the dependency. Dependency does not mean financial dependency. A daughter is dependent on the mother in spite of the fact that she has an independent income. The landlord had left the country three months after the institution of the eviction petition. But, the need projected in the eviction petition was of his wife as well. It cannot be said that the claim for eviction on the ground of bona fide need has extinguished. Landlord can seek eviction of tenant from building for his own occupation along with any of his dependents.
Dependency of the member should be pleaded and proved. Mere fact that husband is a member of the family does not presuppose his dependency on his wife.
The word dependent means a person who would in the normal course look up to the landlord to provide him with the facility of a building possessed by the landlord. A younger brother can also be said to be dependent on the elder brother for his needs. Daughter in law will come within the expression of dependent of landlord in section 11 (3) of the Act. The Act does not put any fetters on the landlord to accommodate his son in law. Dependency is not merely a matter of physical or pecuniary need.
The courts have found that wife, a widowed daughter and her children, married son, married daughter, Son in law, sister’s son, adopted son, husband, even a remote relative in certain circumstances treated as dependent. These relations may not be depended on the landlord financially, they depend on the landlord for the building in his ownership.
Dependency does not mean financial dependency, but dependency for the building which belong to the landlord. There must be sufficient pleading that they are dependent upon the landlord so that the tenant could disprove the dependency.

8. Hardship
The question whether or not there would be greater hardship caused to the tenant by passing the decree must necessarily depend on facts and circumstances of each case. Availability of alternate accommodation is an important but not the decisive factor. Whether serious efforts are made by the tenant to find out alternative building for his purpose is to be taken into account. Where the landlord proves his bonafide requirement and the tenant fails to prove his contention that he tried to find out alternate accommodation, the question of comparative hardship is to be decided in favour of the landlord. The plea of comparative hardship by the tenant is to be rejected when during the pendency of the petition for the last as many as 22 years; the tenant did not make any effort to secure alternate accommodation. Relative financial positions have no relevance while considering the comparative advantages and hardships to the parties.

The relative financial position of parties can be taken into consideration, but cannot be carried to extreme length of holding that the rich man be exposed to denials with a view to be charitable to the poor man, for the simple reason that it is not proper for the courts to be charitable at the expense of the parties. Then an affluent landlord can never get possession of his premises, in spite of his bonafide needs.
Offer by the landlord of alternate accommodation has to be given due consideration.
Where the requirement of the landlord is bona fide and reasonable, fact that tenancy was created before about fifty years back is not be a bar on the landlord for claiming the building for own use.
Long possession has no material bearing on the question of comparative hardship, and is likely to loose thousands of rupees which the customers owned him, it has been held that this is a natural hardship not amounting to ‘greater hardship’. Goodwill built in the premises is not a ground to deny eviction.
The burden of proof is on the tenant to prove the comparative hardship. It must be remembered that the landlord is claiming possession of his own house and that for his own use. Unless the tenant alleges and proves that his hardship is greater than the landlord, the benefit naturally goes to the landlord. Thus it can be said that the burden of proving greater hardship is on the tenant. In an eviction petition on the ground of own use the landlord is not supposed to plead in his plaint his comparative hardship.
The hardship landlord would suffer by not occupying their own premises would be far greater than the hardship the tenant would suffer by having to move out to another place. Whenever a tenant is asked to move out of the premises some hardship is inherent. That hardship can be mitigated by granting him longer period to move out of the premises in his occupation, so that in the meantime he can make alternative arrangement.

9. Section 11 (17) and S.11 (3)
Section 11 (17) is a proviso to section 11 (3) and prohibits the landlord to evict a tenant who is in continuous occupation from 1940 under section 11 (3). This is a personal privilege to the original tenant, heirs of the tenant will not get this personal privilege.
Section 11 (17) or rather this proviso has a proviso which cut short the ambit of this sub section. That proviso allows a landlord to file an application on the ground of own use if the building concerned is a residential building and that the landlord has been living for more than five years in a place outside the city town or village in which the building is situated but this application must be for
1. his own permanent residence, or
2. for the permanent residence of any member of his family, or
3. the landlord is in dire need of a place for residence and has none of his own.

Sub-section (17) is designed to give some additional protection to certain classes of tenants and in that sense it operates as a proviso to Section 11 (3). The burden of pleading and proving that he was in continuous occupation from 1940 is on the tenant. It is for the tenant to establish that he was in occupation prior to 1-4-1940. Execution of a fresh lease deed will not extinguish right under S. 11 (17). The protection under Section 11 (17) given to tenant in occupation from 1940 can be claimed only by a tenant who is sought to be evicted under section 11 (3) and not by a tenant who is sought to be evicted under Section 11 (8).
This section further prohibits the landlord to evict a tenant on the ground of own use where the tenant has been in continuous occupation of the building from 1st April 1940 as a tenant who has been in occupation. This is a personal right and can be availed of by the tenant and not by his successors.

This subsection is a clog on eviction on the ground of own use from tenants who started their occupation prior to 1st April 1940 and has been continuing the same. This is a further proviso to section 11 (3). Detailed discussion under 11 (17).

10. Redelivery of building to the tenant
The tenant has got right to redelivery of the building from which he is evicted, if the landlord who has obtained possession under the ground of own use, and has not occupied the building without reasonable cause within one month or if he vacates the building within six months.
Landlords asserted that there was no other means of livelihood with them and as such they wanted to set up their own business in the disputed premises. It was not necessary for the landlords to reveal the precise nature of the business which they intended to start in the premises. Even if the nature of business would have been indicated nobody could bind the landlords to start the same business in the premises.

12. Condition precedent and Subsequent for eviction under S. 11 (3): an aerial view

These are condition precedent as well as subsequent for reserving an eviction under this sub-section. In other words, if the landlord wants an eviction of his tenant on the ground of own use then he has to prove;
1. He bona fide needs the building.
2. He has no other building of his own in his possession, if he has other buildings he has to prove special reasons to have this building.
3. The tenant has other income and that the tenant is not depending on this trade or business carried on in such building for his livelihood. and
4. There are other suitable buildings available in the locality for the tenant to carry on such trade or business.
5. The landlord got his right over the property prior to one year. (if he got the right from a living person)
6. The landlord should not transfer his decreetal right to any other person i.e. he has to execute the eviction order himself, otherwise the transferee has to prove his bona fide need.
7. The tenancy commenced after 1940. (s. 11 (17) ((Personal right of the tenant, hence the legal heirs will not get the protection),
8. If the tenancy is commenced before 1940 the landlord is living outside the city town or village for more than 5 years and, (s. 11(17)
a. Requires the building bona fide for his own permanent residence or, )s. 11(17)
b. For the permanent residence of any member of his family or, (s.11(17).
c. The landlord is in dire need for a place for residence and has none of his own. (s. 11 (17).

9. Landlord who got evicted the tenant on s.11 (3) must occupy the premises within one month of date of obtaining possession and should not vacate it within six months. The court can order redelivery of possession of the tenant under section 11 (12) if the landlord is not able to show reasonable cause for such non-occupation or vacation as the case may be.
10. The tenancy period is over Sec. 11 (9)

LEASE AND LICENSE

1. Generally
Lease and license are two special types of contracts. Lease is an agreement by which the owner of the building or land allows other to use it for a specified time in return for payment. License is a permission by the granter to do or continue to do something which in the absence of such permission would be wrongful and such right does not amount to an easement or an interest in the property. Licence is just a permission given by the licensor to the licensee to do an act, or to occupy the particular premises for a particular time, which, in the absence of such right, will be unlawful.

The lease and the license over an immovable property, sometimes has close resemblances. In India the lease is defined in Section 105 of the Transfer of Property Act. According to which a lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, expressed or implied, or in perpetuity in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasion to the transferor by the transferee, who accepts the transfer on such terms. It further explains that the transferor is called lessor and transferee is called lessee, the price paid is called the premium and the money, share, service or other thing to be so rendered is called the rent. The lease of immovable property is generally governed by the provisions of chapter V (Sections 105-117) of Transfer of Property Act 1882. But if local rent laws are in force, then the local law which is the special law governs the leases in that area. If the duration of the lease is not specified in the contract the lease may be treated as month to month tenancy or year to year tenancy according to the nature of the use of the property by the lessee.
The contracts of licenses are generally dealt by the provisions of chapter VI (Section 52 to 62) of the Indian Easements Act 1882. Section 52 defines a licence as follows:
“Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do in or upon the immovable property of the grantor, something which would in the absence of such right, be unlawful and such right does not amount to an easement or an interest in the property the right is called the license”.
The person who grants the licence is called licensor and the person to whom the license is given is the licensee. The license is a personal privilege given to the licensee by the licensor. There are revocable and irrevocable licenses. If a person is given the right to use the immovable property in a particular way under certain terms while retaining control and possession of the same the person so permitted is only a licensee.
A dispensation of license properly passes no interest nor alters or transfers property in anything but makes an action lawful, which without it had been unlawful. As a license to hunt in a man’s park, to come into his house is only actions which, without license, had been unlawful. But a license to hunt in a man’s park and carry away the dead killed is a grant.
When once the license is revoked, licensee has no permission to use the premises and he is bound to surrender the property. It is the prime devoir of the court to avoid multiplicity of proceedings. After holding that the defendant was holding the property under a license and that license has been revoked, and that the defendant has got a duty to surrender the shop room in question to the plaintiff, it is not just and proper to direct the plaintiff to file another suit for the same relief, if the court can grant the relief in this proceedings itself.

2. Revocation of the license

A licensee has no interest in the land and his possession is purely permissive. A license does not create any estate or interest in the property to which it relates. As licensees the defendants cannot obviously claim any right of possession over the property. In the case of a license, though the occupation is with the licensee the control or possession of the property is with the licensor through such a licensee. The occupation of the licensee being purely permissive under the Licensor the former is under legal obligation to restore the possession of the property to the latter whenever license is terminated. Licensor can definitely call upon the licensee to vacate the premises. The Licensor is legally entitled to the relief by way of mandatory injunction if a suit is filed within a reasonable time after the termination or revocation of the licence.

2. Irrevocable license

Section 60 of the easement Act defines licences which are not revocable.
60. License when revocable:- A licence may be revoked by the granter, when unless-
(a) it is coupled with a transfer of property and such transfer is in force;
(b) the licencee, acting upon the licence, has executed work of a permanent character and incurred expenses in the execution.
Licence is irrevocable when construction of some permanent character is done on the premises with the consent of the licensor and the licencee has incurred expenses for such construction. This permanent construction must be for the purpose of enjoyment of the licence. The licence agreement must permit the licencee for such construction. Unauthorized construction made by the licencee will not entitle him for the right of irrevocable licence. Hence where the licence deed provides for construction of some permanent structure and the licencee expending money construct some permanent structure there for the enjoyment of the licence the licence is an irrevocable licence. Licencee had constructed a house which is permanent in character in the premises. No objection was raised by licensor. the licence has become irrevocable. The licensor is not entitled to recover the property after demolishing the building, which the licencee has constructed therein. Irrevocable licence can be created by agreement also.
There was a clear provision that at the time of surrender of possession, the licencee should dismantle the structures put up by him in the land in question and he would only be entitled to value of improvements in respect of the permanent structures put up by him. There is a clear contract which would disentitle the licencee from claiming the benefit under S.60 of the Easements Act.
A tenant of a plot of land raised a pucca petrol pump and shop at a considerable expense with the knowledge of the landlord but no express permission of the landlord was obtained to do so. The transaction was a lease and not a permanent licence and section 60 of Easement Act is not applicable.
Conduct of acquiescence to the raising of constructions was eloquent enough to show that the licence was irrevocable.
Licence coupled with transfer of property exists in a valid form; it operates as a contract, or a gift or a grant and become irrevocable. For example, where a common property is partitioned and a well falls in the share of one of them and it is provided in the partition deed that the one who got the portion without the well is allowed to take water from the well on the other part. This is a case of licence coupled with transfer of property and cannot be revoked. This is an irrevocable licence.
The plea of irrevocable licence should be taken at the trial stage and not at the appeal stage. The appellants are precluded from raising such a plea at the appellate stage.
The licence was to construct the building and hand it over to the licensor such a contract will not result in irrevocable licence.

3. Comparison of provisions
A comparative chart of lease under chapter V of the TP Act and licence under chapter VI of the Easements and Licences Act is given below:
Sl.No. Particulars Lease Licence
1. Provision Chapter V. TP Act 1882 Chapter VI of the I.E. Act 1882
2. Definition S.105 S.52
3. How to be made S.107 S.54
4. Duration S.106, 110
(perpetual lease possible) S.60
(Irrevocable Licence possible)
5. Duty of the lesser/ Grantor S108 (A)
Rights of the lessor’s/ Grantor’s S.57
6. Transferee S109 S.59
7. Termination S 111 S.62
8. After termination S 116 S.63, 64

4. Lease or License – the test
The test to know whether a transaction is a licence or a lease has to be ascertained by close scrutiny.
Supreme court of India in Associated Hotels v. R. N. Kapoor formulated the test for ascertaining whether a transaction is lease or license.
1) If the deed creates an interest in the property, it is a lease, whereas if it only permits another to make use of the property on which the legal possession continues with the granter, it is a license.
2) If the deed transfers exclusive possession of the property to the transferee the transaction is a lease.
3) What ever a document states whether a transaction is a license or lease can be ascertained by looking to the intention of the parties and not the form of the deed.
This intention has to be ascertained on a consideration of all the relevant provisions in the agreement. Fact that the premises are in exclusive possession of a person would not make him a lessee. The word ‘rent’ was used loosely for ‘fee’ does not indicate that the parties intended to bring into existence a lease.

Supreme court in B.M. Lall v. Dunlop Rubber Co India Ltd analysed the distinction between a lease and licence. They are,
1. Lease is the transfer of a right to enjoy the premises, whereas the licence is a privilege to do something on the premises which otherwise would be unlawful.
2. The transaction is a lease if it grants an interest in the property, it is a licence if it gives a personal privilege.
3. The label which the parties choose to put upon the transaction though relevant is not decisive. It is not the form but the substance is to be taken into account.
4. If the agreement is in writing it is the matter of construction of the agreement having regard to the terms and the objects and circumstances in which it is made. The question is not of words but of substance.

The intention of the parties is to be looked into, there is no simple litmus test to distinguish one from the other.

The litmus test to determine whether an arrangement is lease or licence is based on the possession. Possession in the legal sense is the determination to exercise physical control over a thing on ones own behalf coupled with the capacity of doing so and is, therefore, necessarily exclusive.
In the case of lease, interest in the property is transferred but in the case of licence the right to enjoyment of the property in a particular manner and for a particular purpose is only given. Licence is a right a person grants to another to do in or upon the immovable property of the granter something which would be unlawful in the absence of such right and such right does not amount to an easement as an interest in the property. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property, the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not it is a license.
If the document gives only a right to use the property in a particular way or under certain terms while it remains in the possession of the owner it will be a license and not lease.
The definition of lease cannot be stretched to the extent of being inclusive of license. The difference between the two is very thin and sometimes very difficult to make out, yet the difference is basic and fundamental. While lease is a transfer of interest in the property, the licence is merely a permission to do something on the immovable property, which, but for the permission would be unlawful. In this connection the definitions given in Section 105 of the Transfer of Property Act and Section 42 of The Indian Easements Act, 1882, would be very useful for making out the difference between the two. For purpose of ascertaining the nature of relationship, the “nomenclature” used in a deed or instrument is not very material.
There is no simple litmus test to distinguish a lease as defined in S.105, Transfer of Property Act from a license as defined in S.52 Easements Act, but the character of the transaction turns on the operative intent of the parties. To put it pithily, if an interest in immovable property, entitling the transferees to enjoyment, is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a license is the legal result.
A license does not create an interest in the property to which it relates while a lease does create interest in the property. Thus there is transfer of right to enjoy the property in case of a lease. Whether a transaction is a license or lease is a question of intention of parties which is to be inferred from the circumstances of each case.
The cardinal distinction between a lease and license is that in a lease there is a transfer of interest in land whereas in the case of license there is no such transfer although the licensee acquires a right to occupy the land.
There is no single litmus test to distinguish a lease from a license, but the character of the transaction turns out on the operative intention of the parties. To put it pithily, if an interest in immovable property, entitling the transferee to enjoyment is created it is lease. If a permission to use land without right to exclusive possession is alone granted, it is license.

1. A lessee can maintain a suit for possession but licensee cannot
2. A lessee can assign his interest to a third party, whereas licensee cannot
3. A licence can be revoked by the granter, whereas lease cannot
4. A lease of immovable property for more than one year can be created only by a registered deed, whereas registration or even writing is not necessary in the case of a licence.
The agreement described the transaction as a licence for eleven months, it is a licence.
Whether it is lease or licence is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances.
The word ‘rent’ or ‘pattom’ may be loosely used for ‘fee’ also. That does not mean that the word ‘pattom’ or ‘rent’ by itself be considered as indicating a landlord tenant relationship. It has to be understood and interpreted in a reasonable manner in the background of other statements, evidence and surrounding circumstances.
This is a matter of substance and not merely of words. The description given is a good indication of the intention of the parties. The parties can certainly be presumed to have reduced to writing what they had in their mind, in other words their intention. It is open to the parties to enter into a transaction of licence or to create a relationship of lessor and lessee. The parties are well aware nowadays of the distinction between lease and licence and the consequences that follow the creation of a licence in contra distinction to a lease, especially after the advent of the Rent Control legislations. When it is the express term of the grant that the grantee was only permitted to use the property as licencee for a specific purpose and that only that limited right was being granted to him, it requires cogent and convincing material to the contra by way of circumstances of the case or conduct of parties to hold that the transaction was nevertheless a lease. The indicia mentioned by us herein earlier are all indicative of the transaction being only a licence and not a lease. The building has been found to be in the exclusive possession of the first defendant that is not conclusive of the matter. As stated in the decision in Kalyani Amma v. Kunhambu Nair 1984 KLT SN 105 Page 62, possession given to the licencee is only such as is necessary to effectively use the premises for the purposes for which the licence was given. Even in cases where transfer of possession is exclusive, it need not necessarily be an indication of the creation of a lease for even in a licence there should be some transfer of possession. Possession is necessary even for a licencee to do such acts in the land as he is permitted to do. As held in Errington v. Errington (1952 (1) All England Law Reports 149) exclusive possession is by no means decisive of lease. Again as held in Abbey field (Harpender) Society Ltd. v. Woods (1968) (1) All. ER 352 a man may be a licencee, even though he has exclusive possession. It is the substance of the agreement that governs the matter. The court must look at the agreement as a whole and see whether a tenancy really was intended.
Occupation of the building on the basis of a licence agreement. Where licencee refuses to give vacant possession of the building on expiry of lease period, suit for mandatory injunction and recovery of damages demanding vacant possession is maintainable. Law does not prohibit parties from entering into a licence arrangement and conducting themselves accordingly. I do not find anything to hold that notwithstanding the terms and conditions stated in the deed the real transaction was one of lease and that the deeds were intended as a camouflage to cover up the real transaction. In that view I find nothing illegal in taking the view that deeds revealed licence arrangement. That is a finding of fact entered on the evidence and on proper construction of licence. As such no substantial question of law is involved. Counterfoil of receipt book for payment of (licence) fee shows that he has received receipts for payment of ‘licence fee’. The parties have meant and understood the transaction not to be a lease arrangement but only as conferring a personal privilege on the appellant to use the premises for the specific purpose of conducting business in jewellery.

5. Distinctions between lease and license

The apex court has listed some tests to determine whether a deed is lease or licence, they are; Whether a particular document will constitute “lease” or “licence” would depend upon certain factors which can be summarized as follows:
(a) Whether a document creates a licence or lease, the substance of the document must be preferred to the form;
(b) The real test is the intention of the parties — whether they intended to create a lease or a licence;
(c) If the document creates an interest in the property, it is a lease; but if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and
(d) If under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease.

Whether a particular transaction creates a lease or a licence, is a question of intention of the parties which is to be inferred from the circumstances of each case it is therefore essential, to look to the substance and essence of the agreement and not to its form. Thus it is clear that the intention of the parties is the paramount consideration and the fact of exclusive possession together with the payment of rent is of foremost importance, but the circumstances in which exclusive possession has been given and the character in – which money paid as rent has been received, are also matters to be duly considered.
Normally in a case of licence, question of subletting does not arise, but simply for giving such a clause in an agreement, it cannot be held to be an agreement for lease.
(1) To ascertain whether a document creates a licence or lease, the substance of the document roust be preferred to the form; (2) the real test is the intention of the parties whether they intended to create a lease or a licence; (3) If the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, ‘prima facie’, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease”.

Space in hotel let out for carrying on business where possession and control with the licencee, the transaction is a lease and not a licence.

The following aspects can be considered in a test to identify a transaction whether a lease or licence.

1. In the case of LEASE Transfer of right of possession is essential 1. In the case of LICENCE there Need not be a right of possession
2. In the case of LEASE Such right must be an interest in the property 2. In the case of LICENCESuch right does not amount to an interest in property
3. In the case of LEASE Lessee can sue in his own name in respect of property 3. In the case of LICENCE Licencee cannot
4. In the case of LEASE If the duration is for one year or more registration is compulsory 4. In the case of LICENCE If interest is not coupled with an interest (u/s. 60(a) of Easement Act) registration is optional
5. In the case of LEASE Notice to quit is essential by lessor 5. In the case of LICENCE No notice is necessary in case of licence
6. In the case of LEASE Transferable (exclusive to the lessee) 6. In the case of LICENCE Non transferable (personal privilege)
7. In the case of LEASE Heritable to natural heirs (exclusive to the lessee) 7. In the case of LICENCE Not hereditary (personal privilege alone)
8. In the case of LEASE Forfeiture by denial of title is applicable 8. In the case of LICENCE Not applicable to licence
9. In the case of LEASE Possession continues after agreed period is holding over 9. In the case of LICENCE Continuation after agreed period is trespass
10. In the case of LEASE In case of forcible eviction, suit is possible based on prior possession 10 In the case of LICENSE In forcible eviction damages alone is the remedy
11. In the case of LEASE Court fee payable in a suit between lessor and lessee is under Section 43 Kerala Court Fees and Suits Valuation Act 1959 11. In the case of LICENSE Court fee payable in a suit between licensor and licensee is under Section 31 Kerala Court Fees and Suits Valuation Act 1959
12. In the case of LEASE The owner himself need not be the lessor (landlord) 12. In the case of LICENSE The owner alone can be the licensor (grantor)
13. In the case of LEASE There must be a contract between two living persons 13 In the case of LICENSE there Need not be a contract
14. In the case of LEASE The lease cannot be created by a will 14. In the case of LICENSE it can be through a will
15. In the case of LEASE The Stamp duty payable to a lease deed is under Article 33 of the Schedule of Kerala Stamp Act 1959 15. In the case of LICENSE The stamp duty payable to a license deed is Rs. 50 as per article 5 of the schedule to the Kerala Stamp Act 1959

6. Characteristics of a License
The essential feature of a license are :-
1. License arise out of permission and not otherwise. It may be express of implied.
2. It is a personal privilege, totally unconnected with the ownership of the property.
3. It does not create an interest in the property in respect of which it is granted.
4. It is non-transferable.
5. It is not heritable
6. It is a positive right (there can be no license to prevent a person from doing something)

Rent Enhancement Petition under section 5

BEFORE THE RENT CONTROL COURT KOTTAYAM
R.C. O.P. NO /2 010
Petitioner
M. O, Mani

Counter Petitioner
Jose Philip

Name and address of petitioner
M. O. Mani aged 74, residing at Thannickal House, Pakkil P.O. Kottayam.
Name and address of the counter petitioner .
Jose Philip aged, 65, J & P Paint House, KMC/799/IX, Thannickal Buidings, Thirunakkara, Kottayam, residing at Kavumgumkattil House, Kidangoor South P.O. Kottayam.
1. The above named petitioner respectfully submits as follows.
2. Petition is filed under section 5 (1) of Act II of 1965 The Kerala Buildings (Lease and Rent Control) Act 1965 for fixation of fair rent for the schedule building occupied by the counter petitioner as the tenant thereof.
3. The building was originally let to the father of the counter petitioner by the petitioner. On the death of the original tenant, the counter petitioner attorned to the petitioner and remained as the sole tenant thereof with the consent and knowledge of other heirs of the original tenant. The counter petitioner alone is paying rent to the petitioner and counter petitioner alone is in occupation and possession of the building and he is the tenant of the schedule building.
4. The rent paid now is only a meager amount and the said rent is not paid from 26/12/1978 onwards.
5. The cost of living and price of all articles and value of properties have got increased to a very great extent. So it is just and necessary to fix the fair rent of the schedule building.
6. The room is having an area of 600 sq ft. The building is on the ground floor. The cost of construction of the building now in the occupation of the tenant will be not less than Rs. 7,20,000/- excluding value of land.
7. A fair return on such investment in the circumstances has to be ensured.
8. The building is a concrete structure having two shuttered entrance, one to the west and one to north and another door with wooden door panel and having three phase electric connection and attached latrine facility.
9. The tenant is paying only Rs. 1500/- per month which comes to Rs. 50 per day which is a paltry sum rent is to be increased to make it in parity with rent of similar building with similar amenities in the locality.
10. The present rate of rent of similar accommodation in the Kottayam Municipal area is Rs.25 per square feet.
11. The Kottayam Municipality is assessing annual building tax of the building as per the new norms formulated by the local self government and it comes to Rs. 3570/-.
12. The schedule building is situated in the centre of Kottayam Town in a very commercially busy and important area. The present rate of rent of similar accommodation in the Kottayam Municipal Area is at the rate of Rs. 25 to 45 per square feet at the ground floor. The schedule building is within 150 meters from Kottayam Municipal Office, Kottayam Private Bus Terminal, Centtral Junction, Mahathma Gandhi Square, Kottayam Y.M.C.A. , Hospital etc. which are all places of public importance.
13. The building is used for commercial purpose of selling painting materials which is a very lucrative business due to location of the building and its commercial importance.
14. The Municipal building tax was Rs.1624/- At the time of letting and it has shoot up to Rs.3570
15. Thus if the rent is calculated at the rate of Rs. 25 per sq.ft. for 600 sq. feet the rent per month will amount to Rs. 15,000/-
16. The rent at the time of letting has become a paltry sum due to inflation and consequential devaluation of money. The money value decreased and price increased several times during these thirty two years.
17. The scheduled building is situated in a very commercially important part of Kottayam town on the ground floor.
18. Considering all the above facts and the cost of living index and increase in construction cost and increase in price of all articles, it is only just and proper to fix the fair rent of the building scheduled here under at Rs.25/- per square feet of the plinth area of the building which is not less than 600 square feet.
19. The court may pass an order to fix the fair rent from Rs. 1500/- To Rs.15,000/- Considering the increase in Municipal tax, decrease in the money value, and increase in the importance of the place during the last thirty two years.
20. In spite of repeated request the counter petitioner refuse to pay a fair rent. Hence this petition. The cause of action has arisen from 1.12.2009 at Muttambalam Village which is within the jurisdiction of this court.

On the above facts it is humbly prayed that this Hon’ble court be pleased to fix the rent of the building at Rs. 25/- per square feet and direct the tenant to pay the rent accordingly at Rs.15,000/- per month, and further grant such incidental and consequential reliefs also.

Schedule of building
District Thaluk Village Municipality Municipal No. Sy No Description North East South West
Kottayam Kottayam Muttambalam Kottayam 799 of ward IX 12 in block No 55 One room having 42 feet long from north to south & 21 feet broad from east to west and have 600 sq. ft. area in building numbered 799/IX of Kottayam Municipality. Private Passage Private pathway Petitioners’ building Private pathway

Petitioner- M. O. Mani

Advocate for the petitioner : Sajan A. Varghese

All what is stated above is true to my direct knowledge and I affirm and declare them to be true and correct.

Dated this the th Day of September 2010 at Kottayam

Petitioner:- M. O. Mani

Grounds available to the landlords for eviction of a tenant

27. 

11(2)	Arrears of rent
11(3)	Own Use
11(4)i	Subletting
11(4)ii	Reducing Value or utility of the building
11(4)iii	Tenant acquiring building
11(4)iv	Reconstruction (Temporary eviction)
11(4)v	Tenant ceases to occupy
11(5)	Renovation (Temporary eviction)
11 (7)	landlord religious charitable or public institution and such institution needs the building for it’s own use
11(8)	Additional Accommodation

Effect of Globalisation in the field of Rental Buildings

India has opened its door to globalization enabling Indian Economy to attain a growth rate which is unprecedented. The business community as a whole enjoys the benefit of globalization. The governmental control on various sectors are withdrawn and free market triggered the economic growth in all sectors of business activities except in rented building stock, thanks to the rent control laws in India. In Raval & Co v. K.G.R., AIR 1974 SC 818 our supreme court has addressed this problem and commented that fools build houses for the wise men to live in. When fools turned wise building stock reduced and as a result of reduced housing stock in the rental market the rent and key money shoot up.
The Ministry of Urban Development (Central Government) had formulated a policy on Urban development and formulated a model rent control act, and requested states to enact laws in tune with the model act. Further laid down stipulation that central fund for urban development can be availed by the states only if such rent control law is passed. One of the mandatory conditions for availing JNNRUM (Jawaharlal Nehru National Urban Renewal Mission) funds is to pass New Rent Control Act balancing the interest of landlords and tenants. Asian Development Bank also urged the States to amend the Rent Control Laws in order to attain sustained growth.

The Kerala legislature had brought a bill in 2002 in the name “The Kerala Buildings Lease Bill, 2002” and the Kerala Law Reforms Commission had brought a bill in 2008. Inspite of all this, the 1965 Act still exists with all its defects and judicial pruning. The Act 2 of 1965 passed by the Kerala Legislature has been modified with several amendments and judicial interventions. Anyway this special area of contracts requires a replacement by a new statute with time bound remedies to the landlords and tenants. The present law has not attained its aim, as the aim of the act is to ensure availability of building at a low rent to the needy.

Policy Paper on Amendments to the Rent Control Acts

Introduction

The basic objective of the rent control legislation is to protect the tenant against exorbitant rents, arbitrary increases in the rent and ensure him security of tenure. The legislation has been necessitated by conditions of scarcity prevailing in rental housing markets of urban areas. As housing is a State subject, different State Governments have framed their own rent control laws. By 1972, almost all the States in the country had enacted Rent control Acts (RCA).
1.2 Rent control was conceived as a short-term measure to overcome the problem of temporary shortages during World wars. The Acts were therefore enacted for short and limited durations. This practice has continued and the rent control Acts in most States are temporary Acts and are extended every few years. The State Governments have periodically amended the Acts either in response to changing market conditions or to plug some loopholes and improve the functioning of the Acts.
1.3 The rent control Acts are generally applicable to all urban areas in the States and to most of the residential and non-residential premises in these urban areas. The exempted premises include those belonging to the Union Government, State Government and local authorities. Some states also exclude from the preview of the Act properties falling below or above certain rental values, newly constructed properties, as also properties belonging to charitable Trusts etc. In each city these exemptions account for a significant proportion of the total rental housing stock.

Major Provisions of the Rent Control Act

2. The Acts typically contain in regard to the following provisions:
a) control on letting and leasing of vacant buildings to assist tenants in their search for desirable rented accommodation,
b) fixation of ‘fair’ or ‘standard’ rent,
c) protection to tenants against indiscriminate eviction by unscrupulous landlords,
d) obligations and duties of landlords vis-avis maintenance and upkeep of their rented properties,
e) rights of landlords against tenants who default in paying rent or misuse the premises, and
f) rights of landlords for the recovery of premises in specific cases.

3. Operation of Rent Control Act

The Rent Control Acts have not been very effective either in protecting tenants against high rents or ensuing upkeep of premises. They have been relatively more effective in providing security of tenure to tenants. In so doing however the right of la lord to recover his premises has been eroded.

The provision of “fair” or standard” rent is at the core of the rent control. Standard Rent is fixed by the rent controller on application from the tenant or the landlord. The basis of fixation in most Acts is either the rent fixed for the premises at some historical date (basic rent) or the cost of or investment in the house. Standard Rent is defined either in relation to the basic rent or as a percentage of the cost or investment in the house. This rent normally is much lower than the prevalent market rent. Under most Acts, tenant is not liable to pay a rent higher than the prescribed standard rent (SR). The provision of fair rent is generally flouted excepting in cases of old tenancies, where the rents have been frozen at historical levels and approximate standard rent, and the rent fixed is the one prevailing at the time of the commencement of tenancy and is much higher than the standard rent. Under inflationary conditions, these rents soon become lower than the market rents. Once however, the rents are fixed, it is very difficult to increase these. There is no provision under the Acts (barring a few cases where the provision has been introduced recently) for increasing the rent over time. The only way to get a higher rent for the premises is to evict the older tenant and re-let the house at higher rent. A significant number of eviction cases are instituted with this motive though the ostensible ground is some other.
Eviction of a tenant is difficult even where a house is required by the landlord for his own use and Special summary procedure has been provided for a few of such cases and in some States for all such cases. This provision however, has not helped the landlord much and the legal process continues to be long drawn. Sometimes, landlords to resort to extra judicial methods to evict the tenants.
The low Standard rent and the difficulty of evidencing the low-rent paying tenants has led to emergence of various unhealthy practices to avoid evade rent control Acts –the most prevalent being demand for key money to offset the impact of low rents and risk of losing the property.
The provisions relating to notification of tenancies and allotments through the rent controller are either not implemented rigorously or have proved to be both ineffective and costly. Further, the way these provisions are operatinalised; they benefit the higher income groups. In most States, the allotment rules give precedence to Government servants. In some cases eligibility is limited to Government servants. The benefits thus accrue to a very small section of the population (society)
The beneficiaries of rent control any way are selection the poorer income groups. The poor tenants can neither afford a lawyer nor spend numerous man days (cases lasting over 10-20 years would mean extensive loss on this account) to get protection under Rent Control Act. In many cities, low rent properties which normally would house very poor tenants are exempt from the purview of the rent control act. Further, the poor tenants in slums and unauthorized colonies are quite wary of approaching the rent controllers in the misinformed belief that they are not protected under the Act.

4. Impact of Rent Control Acts

There is a near unanimous opinion that the social objectives of rent control acts have not been realized. On the other hand there have been various adverse effects. The most significant impact is on the supply of rental housing which is influenced by the Act in three different ways:-
a) The negative effect on investment in new rental housing and supply from the existing stock of housing. This is not only due to low rents but also due to the fear of losing the house to the tenant altogether.
b) Withdrawal of supply from existing rental housing stock. Even though evicting the tenant is very difficult, as and when the landlord recovers the premises the disincentive to re-let the premises is quite high. The large number of vacancies is an evidence of the same.
c) Accelerated depreciation due to inadequate maintenance. Under the controlled regime, the rents continue to remain at a low level whereas the cost of maintenance continues to increase. The situation is more severe in case of old tenancies where the rents have been frozen at historical low levels. It is in case of these old properties that the need for maintenance is higher. The older housing stock in our urban areas thus faces premature decay and degradation. These are also the areas with highest productivity of land. The economic cost of premature death of these properties as also of their low productive use is quite high.
The rent controls have led to stagnation of revenue from property taxes since the base of property tax is Standard Rent which has been frozen under most Acts.
The frozen rents have led to emergence of practices like key money. Thus, apart from creating a black market in rental housing, the Act has reduced the accessibility of low income groups to rental housing, as they cannot afford to pay large deposits to rented premises.
The widening divergence between the interests of landlords and tenants has not only led to increased litigation under rent control Acts (the rent control cases make for a majority of cases in courts) but also to increased crimes. A large number of criminal cases have their origin in disputes over rented properties.

5. Delhi Experience
5.1 Recognising the negative impact and tension created by the rent control Act, various commissions have been set up by the Central and State Governments to suggest reforms in the Act. At the center, Economic Administration Reforms Commission was set up in 1980 and National Commission on Urbanisation in 1985. The amendments in the Delhi Rent Control Act 1958 in the year 1988 have been influenced by these suggestions. Many other States (among them Maharashtra, Tamil Nadu and Madhya Pradesh) have also carried out amendments in their Acts.
5.2 The reforms in the Rent Control Act have been motivated by the following objectives:

a) promoting adequate supply of rental housing for different income groups and ensuring proper maintenance of old housing stock, especially in inner city areas;
b) establishing a better balance between the interests of bonafide tenants in terms of security of tenure and those of landlords in terms of adequate return and easy resumption of possession in genuine cases;
c) making rent control acts less inhibitive;
d) reducing litigation under the Rent control Act
In pursuance of these objectives, the reforms have been directed towards;
i. Liberalising the existing Rent Control Acts by slowly releasing a larger segment of the rent housing market from the purview of the market and reducing the stringency of controls in the controlled segment of the market;
ii. Amending provisions to facilitate expeditious disposal of cases;
iii. Plugging loopholes in existing rent control Acts for enabling periodic rent revision, enforcing obligations of landlords and tenants and balancing security of tenure with resumption of possession by landlords in genuine cases of need or hardship;
5.3 The Delhi Rent control Bill 1988 which was to provide a model for amending the various State Acts has been a precursor of similar amendments in various state governments. The salient features of this Bill are given below:

1. Exemptions from the purview of the RCA extended to newly constructed properties for a period of ten years;
2. Exemption to premises carrying rent beyond Rs. 3,500/- per month;
3. The calculation of Standard Rent to be based on actual rather than reasonable cost of construction and the market price of land in the base year.
4. The permissible Standard Rent raised to ten percent from 7 ½ percent earlier;
5. The Standard Rent or agreed rent to be increased by ten percent every three years;
6. The tenant to be protected against eviction for ten years from the date of building his own house (Clause 14(1) (hh);
7. Right to recover for their own use immediate possession of residential premises made available on rent by certain sections of population like widows, defense personnel and retiring Government personnel;
8. Increased penalties for reletting (after reentry for bonafide reasons) and other offenses; and
9. In calculating cost of the house or additions thereto, the controller permitted to take help of the valuers approved by the Central Government.

5.4 The Act came into effect in December 1988. Large number of writ petitions were filed in the Supreme Court challenging the constitutionality of the amendments. The syprem court, in a series of judgments, has upheld the validity of most of these amendments. The Government of India has requested all the state governments to enact amendments to rent control laws on similar lines. This was broadly endorsed, as a part of the Draft National Housing Policy, in the conference of Housing Ministers in October 1990. A number of States have initiated amendments in this regard.

5. Suggested Amendments in Rent Control Act.

In the light of the principles accepted in the context of Delhi and other reforms dictated by practical experience in a number of states and the requirements of conservation and better maintenance of existing stock of buildings, and in the light of suggestions received from state governments and experts, it is recommended that the following broad framework for revision of RCA may be considered:
A. Exemption
1. Taking into account the fact the problem of rent control is more severe in larger cities and inner cities and the need to enable the judicial bodies to dispense justice expeditiously with lesser load on the courts, the rent controls should be applicable only to large urban areas with population of 3 lakhs and above as per 1991 census. This will mean coverage of a total of 92 cities/towns having population above 3 lakhs. In urban areas with population of less than 3 lakhs where rent control be applicable at present, the Act may cease to be operative from the date of notification of the amended RCA in the State. The population limit is indicative and the State Governments may cover cities of 1 to 3 lakhs also or even less than 1 lakh as per local needs.
2. Exempt new construction for a period of fifteen years. New construction may be defined not only as entirely new construction on a vacant plot of land, but also substantial renovation on existing site so long as 75 per cent of the building is built anew. Technical criteria for determining the extent of renovation will be prescribed. Rent agreed between the landlords and the tenants of above Stated premises and being paid in the fifteenth (last) year of exemption may be deemed to be the standard rent subject to future indexation. Tenant’s refusal to pay this rent could be a ground for his eviction.
3. Exempt premises whether newly constructed or otherwise for a period of 15 years, where the premises have not been under tenancy for seven years or more after the last tenancy.
4. Exempt all tenancies where the term of tenancy extends beyond 20 years, as the tenure terms are more appropriately governed by the conditions of lease than by rent control.
5. Exempt residential and non-residential properties above a specified rent, cut off rent to be defined for single tenancy, as per the proposed new formula for standard rent and as net of property taxation, maintenance charges and charges for amenities. The exemption to apply to existing tenancies also and both existing and new constructions. The exemption limits may be in relation to size of the cities/towns based on population. This will be revised every 3 years according to the consumer price index. The suggested exemption limits could be as follows:-

Urban Areas Exemption limit

>10 lakh Rs. 3500/- per month
5-10 lakh Rs. 2500/- – do –
3-5 lakh Rs. 1500/- – do –

6. Exemption to premises with legal title and valid building permission owned by Wakf and such other religious and charitable trusts including trust operating educational institutions may be considered on a uniform basis by State Governments according to local circumstances.
7. The exemption to low rent properties can be withdrawn as it merely exposes poor tenants to exploitation.

The exemption to low rent properties was granted on the ground that at very low rents the need to protect the tenant was minimal. Also the absence of rent co troll may encourage more rental housing in this segment. This however has not happened. Moreover, as has been the experience in many States, RCA is more effective in granting security of tenancy and assuring availability of minimum amenities to the tenant rather than in controlling rents. The exemption deprives the low-income groups from this protection.

In many States (Tamil Nadu, Karnataka Andhra Pradesh) where properties below a particular rent level have been exempted, the historically prescribed rent levels have been too low to be relevant after 20 years. In cases where the levels have been revised upwards, many high valued properties where the rents have been frozen due to operation of rent control laws have been exempted thereby distorting the intent of the legislature. It is, however, proposed that the low rent properties may continue to be exempted from the provisions relating to accommodation control, wherever these are retained by the State Governments in their states.
8. Exemption of premises hired by diplomats, foreign missions and international agencies. Since most of them pay high rents, these will be anyway exempted under the proposed provision of exempting high-rent properties.
9. Accommodation owned by Governments, Cantonment Boards and local authorities as defined in Nagar Palika Bill should also be exempt. The accommodation rented by the Governments and local bodies however will be under the purview of Rent control Act subject to the exemptions specified above.
B. Standard Rent

6.2 Substitution of multiple formulae for fixing standard Rent (SR) by a simple formula, which will provide fair rate of return on the investment in the house.
a) Standard Rent (SR) to be fixed on the basis of 10% return on the cost of construction an market price of land at the commencement of construction. The rate of return can be varied by legislation. The Standard Rent so derived could be increased by a certain percentage from the year of construction to the present year to arrive at Standard Rent for given year.

To this Standard Rent are to be added charges on account of maintenance, taxes payable and amenities. The maintenance charge may be ten per cent of the Standard Rent, that for taxes as per actual tax payable pro-rata and the charge for amenities as agreed between the landlord and the tenant subject to a maximum in relation to the rent paid. These charges are over and above the standard Rent and do not constitute a part of it.

b) The new Standard Rent to become applicable from the day the Act becomes effective. The permitted increases in Standard Rent would also be effective from the day the amendment permitting the increase in rent comes into effect.

c) The Standard Rent may be revised every three years on the basis of criteria notified by the State Governments. Meanwhile, the Standard Rent to increase by a given percentage every year to be prescribed by each State according to rate of inflation, subject to adjustment at the end of three years according to CPI. The increase in, Standard Rent will be automatic. Reference to the rent controller will be made only in case of disputes on the base rent.

The rate of increase could vary from city to city and can be higher for larger urban areas. Thus in cities like Delhi, Bombay etc. Standard Rent could increase by eight per cent every year, where as for smaller urban areas this figure could be five per cent or as the State Government may decide. The percentage of increase n Standard Rent may be higher in case of non-residential properties.

For most of the States in India, price increases over the past one to two decades have been in the range of 8-10 per cent. This should determine the outer bound for prescribed increases in rent, since in smaller cities as well as in some parts of large cities an increase of ten per cent may result in Standard Rent being higher than the market rent. Further the rent control acts have also been used as anti-inflationary measures and rent increases equivalent to price increases may fuel the inflationary pressures. Under the current macro-economic scenario when the CPL has crossed 14 per cent mark, linking rents with CPI will lead to sharp increases in rents.

Extrapolating the current rents at 8 percent per annum, a rent of Rs. 1500/- for a two bedroom flat in a middle class colony in Delhi in 1991 will increase to Rs. 2204/- by the year 1995 and will approximate Rs. 3500/- by 2001.

d). The increases in Standard Rent for premises in non-residential uses may be at a higher rate.
e). The new Standard Rent will be applicable to all old new tenancies. The rent of the old tenancies with less than the specified rent is to be brought at par with the prescribed Standard Rent gradually over a period of five years in order not to impose a sudden financial burden on tenants. The State Government may decide to have a longer adjustment period and/or a lower rate of growth of rents of older tenancies to further lighten the burden on tenants.

The level of neutralization of rent may relate to the age of premises and lower rates of increases be used/adopted for earlier period. Further, the level of neutralization could range from 25 per cent for residential premises with less than 25 square meters area to 100 percent for plinth area over 80 sq.mtrs. and for non-residential premises.

f). Standard Rent is to be increased if landlord invests subsequently in the premises and the investment has been made in agreement with the tenant/s and it leads to significant improvement in the flow of service or amenities to the tenant/s. The increase in Standard Rent will be only in relation to expenditure incurred on construction by the landlord. The land price taken for calculation of the rent will continue to be the price prevailing at the time of initial construction as indexed upto the year of reconstruction.
g). Reduction in flow of service due to reduction in accommodation space or poor maintenance or deterioration in services will result in lowering of standard rent and the tenant can apply to Rent Collector for refixation of rent.

The important principle is that while the tenant will enjoy security of tenure in controlled premises, he should agree to pay a rent that provides adequate return on investment and provides for proper maintenance and taxes, so that he does not enjoy an unfair advantage over the landlord. If at all the tenant is to be subsidized, it should be done by the State and not the landlord.

Standard Rent and Revenue Base of the Local Authority:

The revision of standard Rent will strengthen the property tax base and augment the financial resource base of the local authorities for whom property tax is a major source of revenue.

C. Eviction

6.3 Almost all state Acts specify certain grounds for evicting the tenant which include non-payment of rent, misuse or non-use of premises requirement for major repair or reconstruction, bonafide need of the owner and acquisition of a house by the tenant. It is suggested that the following grounds may be added to the above:-
a). refusal to pay revised standard rent;

b). sub-letting of premises (without the permission of the landlord);

c). Failure of tenant to deliver possession after giving notice to quit;

d). Denial by the tenant of title of landlord;

e). Deliberate misuse or damage of premises, and other reasons cited in a number of State
laws. These have been included as the statutory grounds for eviction in various states.

6.4 In the current Acts, summary procedure is available for evicting the tenant in case of bonafide requirement of the landlord for certain category of owners. In Delhi, Summary procedure is available for eviction on bonafide grounds to all owners. With this a special category of persons like Government servants, widows, armed forces, etc. has been created who is to be provided immediate possession incase of bonafide requirement. It is suggested that to this special category we add the aged (65 years and above) and the handicapped. The State Government may include some other groups (like scientists etc.) for special treatment depending upon the special requirement of these in each state.
6.5 In eviction proceedings, compromise between landlord and tenant should be permitted at any stage.
6.6 The landlords should be penalized heavily for not occupying or relating the premises within three years of getting possession on grounds of bonafide need. This offense can be taken cognizance suo moto by the Rent controller who can also charge the fine on a continuing basis. In case the landlord demolishes and reconstructs the house after acquiring possession, the period of three years is to be counted from the day of his occupying the house. The penalties may be provided for n State laws.
6.7 Acquisition or building of a house by the tenant his spouse or dependent children will be a ground for eviction of the tenant. The tenant is to be given a period of one year to move to the newly acquired house from the time it is ready for occupation so long as he does not let out the house whereafter the landlord can move the rent controller for eviction of the tenant by summary procedure.
6.8 Resumption of possession for own use should be provided for controlled non-residential premises. The grounds for eviction should be specified. Under the RCA, special rules should be framed for non-residential premises. Most of the premises should be brought within the purview of contractual tenancy as far as possible. The law can provide for penalty for both landlords and tenants for the violation of obligations listed in the Model Law.

Streamlining Judicial Procedure Under Law

a).The present civil courts are over burdened with cases under the Rent Control Act over and above other cases, and it takes many years for disputes to be settled or for landlords to get possession even in genuine cases. In Delhi, 10,000 cases are filed each year in contrast to the maximum disposal of 4000 cases, and there are three tiers apart from the SLP to the Supreme Court. Court has recognized this in a number of cases and has advocated a system of adjudication by Tribunal and the exclusion of civil courts from hearing rent cases. A proposal for amendment to Article 323 B of the constitution to provide for the establishment of state level Rent Tribunals and exclusion of jurisdiction of High Court and other Courts has been approved by the Cabinet. Adjudication of rent control would be vested in rent controllers (excluding civil courts), with only one court of appeal to Tribunals at the State level. The State level Tribunals to be set up will not be governed by Civil procedure code and may be given powers to decide all issues (like that of ownership, title etc.) pertaining to resolving of tenancy disputes. Under Article 136 of the constitution, SLP will be only to the supreme Court against the orders of State level tribunals. Tribunals can also take up cases suo moto for revision. The constitutional amendment will ensure excluding the writ jurisdictions of High Court. Details of composition, jurisdiction and procedure of the Rent Tribunals and Rent Controllers will be finalized in consultation with Min. of Law.

The powers of rent controllers would include the power to accept affidavits as proofs. The controller should also have the power to record a lawful agreement or Compromise between the litigants and make an order accordingly. There should be heavy penalty for adjournment on frivolous grounds. It is open to State Governments to extend the jurisdiction of the proposed two tier system to properties or towns not falling under Rent Control Law if they can make the budget provision or strengthen the set up suitably.
b). The procedure of litigation should be simplified. Summary procedure should be followed and decision should be given largely on the basis of written statements and plaints as suggested by the Supreme Court itself in one case. Oral evidence can be limited to minimum. Representation by Counsel allowed only when absolutely necessary. Code of civil procedure in all its details should not be applicable to the functioning of the Tribunals.

There should be a time limitation of disposal of cases specially under the Summary procedure. This would be facilitated if day to day hearing is allowed for these cases. In case the Rent Controller fails to abide by the time limitation, the Tribunal will have suo moto powers to call for the papers of the case and decide the case itself.

c). Prescribed standardized proformae for instituting appeal under various provisions to be prepared for use of landlords and tenants.

D. Maintenance

Providing for better maintenance and up gradation of houses by:

a). including maintenance cost explicitly as charges payable by the tenant to the landlord, thus making it viable for the landlord to carry out proper repairs etc.
b). The landlord to be responsible for all structural repairs whereas the tenant can carry out day-to-day repairs against adjustment towards rent. These should be specified.
c). The landlord to be given the right to inspect the rented premises;
d). The tenant to restore premises o the landlord in as good a condition as at the time of entry.
e). Procedures for temporary vacation of premises for renovating old buildings to be simplified. In this respect, the RCA should be excluded from the operation of the other related Acts like slum Clearance and Improvement Act etc.

Following terms of re-entry of the tenant can be prescribed:-

i. The tenant is not to be provided any compensation for temporary vacation.
ii. The tenant is to be given first choice in the allotment of accommodation in the renovated premises.
iii. The landlord can apply for revision of rent taking into account expenditure incurred on special repairs to the building.
iv. The tenant is to be required to pay the revised rent on the basis of the prescribed percent of cost of reconstruction (renovation). The cost of land taken for calculation of standard rent will be based on indexation of the original land price rather than market value of the year of reconstruction.
v. Tenants refusal to pay the revised rent will be a ground for eviction.
vi. The landlord can use the remaining premises for any purpose permissible under the Building Bye-Laws etc. after providing for residential space equivalent to that available in the older building to the erstwhile tenants.

E. Obligations of Landlords and Tenants

Whereas most of the State Acts prescribe obligations of the landlords, that of the tenants are omitted. In order to streamline the system, it is imperative that the Act not only states responsibilities of landlords but also of tenants.
1. Landlord to compulsorily register tenancy with the authority designated by the State Government.
2. Landlord liable to give rent receipt to the tenant.
3. Wilful cutting off or withholding of essential services by the landlord or tenant to be penalized heavily.

Obligation of tenants have been covered under “Maintenance” paragraph.

Limited Period Tenancy
In order to induce landlords to supply rental housing a few state Governments have introduced new provisions in the Act to create special category of contractual or semi contractual tenancy within the framework of rent control acts. Recognising that the major disincentive to rent out the premises has been the difficulty associated with getting repossession by the landlord at the end of the contracted period. It is proposed that such provisions be introduced in all state Acts.

i. The landlord be permitted to let out his premises for a limited period not exceeding five years, if he does not require the same for that period;
ii. Such permission will be granted by t the rent controller after verifying the bonafides of the landlords contention. There will be a limitation on the number of times such permission can be granted;
iii. During the period of tenancy all provisions of rent control act be applicable. However at the termination of the limited period the tenant will have to vacate the premises. No judicial proceedings be required for this eviction;
iv. The failure to vacate at the end of the ‘limited period’ should be liable for heavy penalty.

It is expected that this provision will bring in a large pool of transient supply of rental housing in the market.

It is proposed to create three types of tenancies in the controlled rental housing market (i) long term tenancy extending over a period of 20 years or more; (ii) limited period tenancy extending upto a period of five years; (iii) all others specifying no period of tenancy.

Under the proposed scheme (i) is exempted from most of the provisions of the rent control act during the contracted period of twenty years. It is believed that the ‘security of tenure’ extended to the tenant under this provision compensates for the partial non-protection of the tenant under the Act. The limited period tenancy is already provided for in the Delhi Rent Control Act, 1958.

It is believed that providing for a plurality of typologies of tenancies will provide incentives for larger supply of rental housing in the market, since different factors motivate different suppliers of rental housing.

Other Provisions

1. Make rent control act as a permanent Act The rent control act in most states is a temporary Act and is extended every few years. The failure to extend can result in unintended suspension of the Act and consequent chaos in the rental housing market. Since there is no intention to abolish the Act even in the conceivable long run it might be better to make the Act a permanent Act;
2. Vest administration of the Act in the State Housing Department –The adjudication of rent control act falls under different departments in different states. If Rent Control/act is to be used as an instrument of housing policy and integrated with other instruments, it is important that the entire operation of the Act (legislation, implementation and adjudication) is with the Ministry or department of housing. This reform will also improve the efficiency of the Act.
3. Abolition of provision for accommodation control –The provision of Accommodation control is a feature of Rent control Act in some states. This provision was introduced at a time when there was dire need to house army personnel and such officials in times of scarcity of housing and is out dated. Of all the provisions this provision has turned out to be the most expensive to operate and most difficult to operationalise. The provision should be abolished with immediate and retrospective effect. All properties which have been leased under this provision should be treated at par with other tenancies under the Rent control Act. If however, certain states believe that there is need to retain this provision it may be continued for a .limited period or as decided by the state Government or notified areas.
4. Limit the inheritability of tenancy to all legal heirs who had been living with the deceased and dependent upon him and do not own a house in the urban area. In case of minor children, the right of inheritability to be applicable only for a limited period. In case the heir owns a house in the urban area, he is to be permitted one year’s time to vacate the premises.
5. Subletting to be permitted only with the written permission of the landlord. The illegal sub-tenancy to be converted into lawful ones within a given period, if landlord agrees;
6. Rent control provisions to be extended by State Legislature to private properties in cantonment areas in consolation with the Central Government as provided in the existing Cantonments (Extension of Rent Control Laws) Act, 1957. The properties of cantonment Boards themselves should be exempted from the provisions of RCA.
7. All tenancies to be registered;
8. Provisions relating to charging of premium to be deleted from the Act;
9. Part vacation of the house to be made feasible;
a) if the tenant does not require whole of it and subject to the landlord agreeing;
b) under eviction proceedings for bonafide reasons; if the landlord is agreeable to get part of the house vacated;

The old Acts could be repealed by state Governments rather than amended as the drastic amendments required may lead in some cases to confusion and make the Act very complicated.

What is the use of Judicial System if the justice is not done in the lifetime of a Person

A building owner has filed a rent control petition with No 25/1983 (Rent Control Court, Kottayam) when the building owner was 48 years, the tenant denied the title of the owner and rent control court passed order on 24/10/1991 that as there is dispute of title the civil court only has jurisdiction.

The tenant had tried to do some modification in the building which the Landlord opposed and filed an injunction petition in 1997 in which the court ordered that the tenant can do only painting and whitewashing in the building, and no other work of permanent character can be done by the tenant in the building.

The Building Owner filed OS 200/1992 (Sub Court, Kottayam) and judgment was delivered on 11/6/1999 declaring that the building owner aught to have probated his title deed (his father’s will).

The Building Owner has field appeal with No AS 139/2000 (District Court, Kottayam) and judgment was delivered on 18/7/2003 finding the title of the building owner but remanding the case to the lower court for disposing the suit on any of the grounds mentioned in the rent control Act.

The building owner preferred appeal (FAO 158/2003) (High Court of Kerala, Ernakulam) on that order of remand and the tenant preferred appeal (FAO 136/2005) (High Court of Kerala, Ernakulam) against the finding that the building owners has title.  Common judgment passed on 14/8/2005 confirming the title of the building owner and remanding the case for disposing on any of the ground mentioned in the rent control act with a direction to dispose of the case with in 3 months.

The tenant filed Special Leave Petition Before the Supreme Court of India SLP CC No 1918/2008 ;  SLP No 4837/2008 which was dismissed by the Supreme Court on 15/2/2008

The suit was heard in the lower court (OS 200/1992) (Sub Court, Kottayam) and passed order on 7/7/2011 finding the title of the building owner and finding that the own use claimed by the owner is bonafide.  meanwhile the tenant had gone to the high court in a writ (WP(C) 43/1998 (High Court of Kerala, Ernakulam) which was disposed of on 28/5/2008) claiming that his pleadings has to be amended (which was rejected by the high court).

Against the order of the lower court the tenant preferred an appeal (AS 192/2011) (District Court, Kottayam) mean while the building owner died on 16/5/2012 at the age of 78.

During this 30 years the building owner was shuttling from one court to another and from piller to post with no result.

The irony is that the tenant is occupying the building having 1800 sq. ft. for a meager rent of Rs 125 per month with amounts to Rs. 0.06 per sq. ft.

For this injustice the building owner has filed a Rent control petition for revision of rent (RCOP 34/2011) (Rent Control Court, Kottayam) which was stayed by the Kerala High Court on an order on OP (RC) 2410/2013 (High Court of Kerala, Ernakulam) stating that as there is a unsettled dispute over the title pending in the court as AS 192/2011. OP (RC) 2410/2013 ordered that RCOP 34/2011 can continue pending AS 192/2011.  The High Court of Kerala on 14/08/2013 vacate the stay ordered in OP (RC) 2410/2013 on finding the fact that FAO 158 of 2003 and FAO 136 of 2008 was already ordered finding the title of the petitioner by HON’BLE MR.JUSTICE T.R.RAMACHANDRAN NAIR and HON’BLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI. On continuing the trial of RCP 34/2011 the trial court ordered the rent as Rs.10 per square feet in RCOP 34/2011.  The tenant filed RCA 24/2014 and the building owner filled RCA 25/2014 common order enhanced the rent to Rs. 30 per square feet.  The tenant filed RCR 250/2016 and RCR 251/2016 before the High Court of Kerala against the order of the district court. RCR 250/2016 and RCR 251/2016 is ordered on 11/10/2018 by Justice Harilal. The tenants went to Supreme Court of India and filed Special Leave Petition Numbered as SLP (C) 6556 and  6557 of 2019 and is dismissed on 11/3/2019 upholding the order in RCR 250/2016 and RCR 251/2016.

Mean while the landlord had filed petition for arrears of rent RCP 11/2017 which is stayed by the Munciff on the ground that the matter is pending before the High Court. The building Owner filed a OP(RC) 109/2018 before the High court to vacate the order of stay. OPRC 109/2018 ordered in favour of building owner.

AS 192/2011 ordered in favour of the building owner finding the ground of own use.  The tenant filed Regular Second Appeal RSA 1109/2016 before the High Court of Kerala. The same was heard by  Justice Harilal but the order of the judgement not pronounced. Later the case was posted in regular list for further hearing.

From 1983 to 2019 the building owner is shuttling from one court to another.  During these thirty six years the building owner is not getting any remedy for his legal battle in spite of his reverence to the judicial system from the court of law.

The tenant is very affluent and rich.  The tenants are conducting  Kumarakom Hotel, at Kottayam Gandhi Square. Initially taken on rent by Itty Chacko, thereafter his son T. C. Abraham conducted hotel, now his sons T. A. Thampan residing at Flat No. 2A-1, Century Towers Kottayam. Phone No. 9447014797 and worship at Solomon’s Portico and Sunny Abraham alias T.A. Sunny residing at Thyparambil House Kottayam and worship at Abundant Life, Kottayam Phone Number 9496375957 are conducting the case against the landlord in order to grab the property.

T. A. Thampan married Maya Thampan and has Son Joshwin Thampan and works as Chief Strategy Officer at AL Jassar LLC, Muscat, Oman.

T.A. Sunny alias Sunny Abraham married Sherley Sunny and has a daughter Chintu Sunny working at International Modern Hospital, Dubai as Clinical Audiologist and a Son Deepu Sunny who married Lija Mary Jacob and he is Assistant Director at EY (Ernst and Young).

All this happened at Kottayam, Kerala

Is this the type of justice the courts are rendering ?

Is Judiciary a farce ?  A petition before the court if not settled finally and given a remedy within a reasonable time is a waste of time money and effort and make the Judiciary a mockery.

Will a sensible man come to judiciary for getting any remedy for any injustice he has faced ? Is it advisable to seek remedy in a court of law in India ?

The Kerala Buildings (Lease standard Rent and other facilities) Act 2013

http://www.thehindubusinessline.com/industry-and-economy/real-estate/rent-agreement-registration-to-be-mandatory-in-kerala/article4160825.ece

New Rental Regime in Kerala

New Rental Regime in Kerala

(Click the above link for the article)