Legal Reference Library

In N.K. Bhasin vs Union of India, the division bench of the Allahabad High Court upheld the constitutional validity of provisions of Finance Act, 1994 imposing Service Tax on rented immovable property. While dismissing a bunch of writ petitions, the Court also confirmed the vires of connected circulars passed by the Ministry of Finance. The petitioners in the instant case, approached High Court challenging the constitutionality of Sections 75(A)(6)(h) and 77 of Finance Act, 2010 and Sections 65(90)(a) and 65(105)(zzzz) read with Section 66 of Finance Act, 1994 as amended by Finance Act, 2007 and Finance Act, 2010. They urged that the provisions are illegal, arbitrary and lacking legislative competence infringing Articles 14, 246 and 265 of Constitution of India. They further impugned the validity of circulars dated 04.01.2008 and 22.05.2007. The bench noticed that a similar issue was raised before various High Courts wherein these Courts upheld the validity of the above provision...

The Supreme Court, in Pawan Kumar Gupta vs BR Gupta, has held that condonation of delay in payment of rents can take place only when defaulting tenant so pleads with justifiable reasons which would show that he was prevented from compliance by circumstances beyond his control. In the instant case, in 2005, an order was passed by the rent controller directing the tenant to pay or deposit the rent with effect from 1.10.2004, and continue to pay the same at the aforesaid rate month by month. The tenant did not comply with the order. Observing that the tenant failed to provide any explanation regarding delay in depositing of rent month by month in terms of the order, the rent controller held that he was not entitled to the benefit under Section 14(2) of the Act and an eviction order was passed. The high court upheld this order refusing to condone the delay in payment of rents. An apex court bench comprising Justice J Chelameswar and Justice S Abdul Nazeer observed that the tenant was...

The Supreme Court, in Bhagirath Agarwal vs M/s Simplex Concrete & Piles (I) Pvt. Ltd, has held that once the court permits the tenant to pay arrears of rent in installments, there is no discretion available with the court to deny interest of the same to the landlord. A bench comprising Justice Kurian Joseph and Justice R Banumathi set aside the order of the trial court that denied interest for the arrears of rent payable to the landlord and allowed the tenants to pay the arrears in installments. Referring to Section 17(2A) of the West Bengal Premises Tenancy Act, 1956, the bench said whenever payment of rent, including arrears, is permitted to be paid in installments, the statute contemplates that the beneficiary shall be granted interest This is irrespective of the justification or explanation, if any, available for the non-payment, the bench added. The court also observed that though under Section 34, the said amount can be set off, in case the landlord has refused to provi...

In Rajesh Projects (India) Pvt. Ltd vs. CIT, the issue before the Delhi High Court was the nature of the payments made towards lease. Do they constitute rent so as to attract Section 194-I? The court is of opinion that clearly these payments are not “rent”. That they are annual payments cannot be doubted. Yet, part of the payment is clearly capital in nature. Clause 1 of the lease deeds entered into in each of the cases, clearly points to the fact that a small percentage of the agreed amounts were paid as part of the lease premium and were towards acquisition of the asset; they fell, consequently in the capital stream and were not “rents”. The balance of such premium payments were spread over a period of 8 to 10 years, in specified annual or bi-annual installments. Here, distinction between a single payment made at the time of the settlement of the demised property and recurring payments made during the period of its enjoyment by the lessee is to be made. This distinction is c...

The Supreme Court in Munshi Lal vs. Smt. Santosh, has observed that if a tenant enters into a partnership agreement with his son-in-law and allows him to occupy the tenanted premises, without obtaining the consent of the landlord, it cannot be said that there is no parting of possession. The high court in the instant case had upheld the view taken by the appellate authority, which had relied on Smt. Krishnawati Vs. Shri Hans Raj (1974) 1 SCC 289, in which it was held that in an arrangement where the premises was rented by the husband, and the wife was allowed to carry out business in a part of the premises, would not amount to subletting. “In this case, the relationship is not like that of a spouse being allowed to carry out a business in the same house. The relationship is of a son-in-law and father-in-law who had entered into a partnership agreement,” a bench comprising Justice SA Bobde and Justice L Nageswara Rao said. The court, referring to provisions of the Delhi Rent Contr...

In Nandkishor Savalaram Malu (Dead) Through Lrs. Vs. Hanumanmal G. Biyani (D) Thr. Lrs. & Ors., the matter was eviction of a partnership firm which was the lessee/tenant and whether employees as well as the partners have to be made parties to the suit. The Hon'ble Supreme Court of India held that " we are of the considered opinion that neither the Firm nor their partners and nor defendant no.1 had any legal right to remain in possession of the suit house. The reason being that so far as the Firm and its partners were concerned (defendant Nos. 2 to 9), they being the tenant rightly suffered the decree for payment of arrears of rent and eviction under the Rent Act and so far as defendant no.1 was concerned, he was neither an owner of the suit house nor a tenant inducted by the appellants and nor a licensee but was held to be an employee of the Firm and a rank trespasser in the suit house. 24) The legal effect of such eviction decree under the Rent Act was that the possessio...

The Supreme Court in Nandkishor Savalaram Malu vs. Hanumanmal G. Biyani, has held that when a partnership firm is the tenant, then an employee of the firm is not a necessary party to the eviction proceedings initiated by the landlord. The bench comprising Justice AK Sikri and Justice AM Sapre held that such persons since claim through the firm, they have no right of their own in the tenancy and in the demised property qua landlord. The trial court, though passed decree against the firm and its partners, found that no eviction decree can be passed against the employee of the partnership firm as he was in an unauthorised occupation of the suit house as a trespasser. Liberty to file a separate suit against the employee was granted to the landlord. On an appeal by landlord, the First Appellate Court held that being an employee of the firm, he was bound by the decree passed against the firm and its partners. The high court, exercising its revisional powers, restored the trial court order se...

Rent Law; Shahul Hameed Vs. P.E. Abdu Razak [Kerala High Court, 25-11-2016] Contents Stair Case Room Section 11(2)(b) and (3) of the Kerala Buildings (Lease and Rent Control) Act Adil Jamshed Frenchman v. Sardar Dastur School Trust, AIR 2005 SC 996 Raghunath G.Panhale v. Chaganlal Sunderji, AIR 1999 SC 3864 Rent Control & Eviction – When a tiny room only is required for the landlord, he need not forgo a monthly rent by occupying a spacious room. Rent Control & Eviction – A lazy trader cannot be considered to be a person solely or mainly depending for his livelihood on the income derived from his business. Rent Control & Eviction – In all cases tenants need not prove their precise income. But evidence must be produced to prove the approximate income. Rent Control & Eviction – If the tenant has only one source of income, he should prove that he is getting an income with which he can live. He cannot be heard to say that he need not produce any evidence to prov...

The Supreme Court in Rajender Bansal & Ors. Vs. Bhuru (D), has held that a civil court would not cease to have jurisdiction to try a pending suit of eviction if the suit property came under the notified area during pendency of the suit. The bench comprising Justice AK Sikri and Justice NV Ramana summarised the following principles laid down in several decisions like Mansoor Khan Vs. Moti Ram and Atma Ram Mittal Vs. Ishwar Singh Punia: * Rights of the parties stand crystallised on the date of the institution of the suit and, therefore, the law applicable on the date of filing of the suit will continue to apply until suit is disposed of or adjudicated. *If during the pendency of the suit, the Rent Act becomes applicable to the premises in question, that would be of no consequence and it would not take away the jurisdiction of civil court to dispose of a suit validly instituted. *In order to oust the jurisdiction of civil court, there must be a specific provision in the Act taki...

The Supreme Court has held that a farmer, who is in possession of leased land even after expiry of the lease period, cannot be evicted if the owner either acknowledges the tenancy or is accepting the rent. Referring to a provision of the Transfer of Property Act, a three-judge bench headed by Justice Ranjan Gogoi set aside the judgement of the Punjab and Haryana High Court which had ordered the eviction of a farmer after expiry of the lease period of the land. “The operation of section 116 of the Transfer of Property Act would confer legitimacy to the possession of the tenant even after the termination or expiration of the deemed period of the lease so as to confer on him a status akin to that of a statutory tenant and hence protection from eviction as envisaged by the provisions of the Act (Punjab Security of Land Tenure Act) of 1953,” the bench, also comprising Justices Arun Mishra and P C Pant, said. The bench said there was no legal provision to evict the farmers as ...

Tenants protected from creditors In a judgment that grants relief to tenants, the Supreme Court has declared that the provisions of the Securitisation Act (Sarfaesi) cannot be used to override the provisions of the Rent Control Act. The Supreme Court, while setting aside judgments in several cases of the Bombay High Court, underlined that the Rent Control Act is a social welfare legislation and must be construed as such. In the case, Vishal Kalsaria vs Bank of India, the court further explained that while Sarfaesi is concerned with non-performing assets of banks and financial institutions, the Rent Control Act governs the relationship between a tenant and the landlord and specifies the rules of ejectment with respect to tenants. The banks had proceeded to take possession of the properties of landlords, who had defaulted on payments for the loans taken by mortgaging the properties. The tenants were caught in between. "If the contentions of the banks are to be accepted," ...

a) issue in relation to revisional jurisdiction exercised by the High Court in rent matters; b) the scope of inquiry to examine the title of the landlord of the suit premises in eviction matters; c) whether all the co-owners/co- landlords of suit premises are necessary parties in the eviction petition filed under the Rent Laws d) law relating to power of attorney executed by principal in favour of his agent. 1) High Court while hearing revision petition arising out of eviction matter is concerned, it remains no more res integra and stands settled by the Constitution Bench of this Court in Hindustan Petroleum Corporation Limited vs. Dilbahar Singh (2014) 9 SCC 78. Justice R.M. Lodha, the learned Chief Justice. High Court shall not exercise its power as an appellate power to reappreciate or reassess the evidence for coming to a different finding on facts. Revisional power is not and cannot be equated with the power of reconsideration of all questions of fact as a court of first ap...