Bonafide Need of Commercial Premises is Different from Residential Premises
WHETHER SECTION 14(1)(e) OF DELHI RENT CONTROL ACT IS VIOLATIVE OF ARTICLE 14 OF CONSTITUTION OF INDIA?
Delhi has always been the hot destination for the people from all over the India to come and settled. Under this impressions, the people of Delhi had leased-out their properties, either extra space in their property or extra shop or house, to encash the situation in order to earn income either as their main source or as an extra income. However gradually the value of the Properties in Delhi also started getting costly and the value of the rupee started getting devalued. This has caused the disparity in the lease rent and the market value of the properties especially the commercial properties. Due to this disparity, the courts burdened with the flood of litigation between the landlords and tenant. This litigation compelled the courts in Delhi to create a balance between the rights of the tenants and the Landlords. This litigation between the landlord and tenant has also invited the Apex court to pronounce various landmark judgements such as Gian Devi Anand Vs Jeevan Kumar 1985(2)SCC 683 wherein the Hon’ble Apex court decided that the statutory tenancy is also inheritable by the legal heirs of the deceased tenant, Precision steel ( AIR 1982 SC 1518) etc. wherein the Hon’ble apex court made pronouncements on the criteria of deciding the bonafide need of the landlord Viz a viz the rights of the tenants. However. An analysis of the judgments of 1950s’ to early 1990s’ would indicate that in majority of cases the courts heavily leaned in favour of an interpretation which would benefit the tenant were more or less favourable to the tenants as compared to the need of the Landlords. However this trend gradually started changing wherein the courts started looking for the bonafide need more sympathetically but despite that, there was always a hurdle with an issue regarding “the purpose of the lease” i.e. whether the tenancy was created for the residential purposes or commercial cum residential purposes due to the interpretation given by the courts in Delhi of the language of section 14(1)(e) of the Delhi Rent control, Act. The Hon’ble supreme court in another matter of Precision steel (AIR 2003 SC 650) has to lay down the criteria for the courts to decide the purpose of the lease. However despite this judgement, tenants in most of the cases used to take the defense that the premises has been let out for commercial cum residential purposes and the cases used to be dragged for years in evidence in order to get the adjudication “if the premises was leased out for residential purposes or for commercial cum residential purposes”
Facts of Gian Devi Anand Vs Jeevan Kumar 1985(2)SCC 683, the appellate purchased the premises in question from its previous owners, who had let out two shops in the premises for commercial use. Appellate filed an eviction petition under Section 14(1)(e) of the Delhi Rent Control Act on the ground of bonafide requirement, which was dismissed by the Rent Controller as the premises were not let for residential purpose and therefore, Section 14(1)(e) does not cover the ambit of it.. The appellant not only challenged the order but also challenged the Vires of section 14(1)( e) of the Delhi Rent control Act in the Hon’ble High court and full bench of the Hon’ble Delhi High court. The Hon’ble High Court heard the Civil Writ petitions and after relying upon the Delhi High court Judgement titled H.C. Sharma Vs LIC of India and Apex court Judgement titled Amarjit Singh vs Khatoon Quamaram ( 1986) 4 SCC 736 upheld the vires of Section 14(1)( e) of the Delhi rent control Act . The appellant Satyawati Sharam Challenged the order of the High in the Hon’ble supreme court wherein Supreme Court in Satyawati Sharma judgment held Section 14(1)(e) as unconstitutional, being violative of Article 14 of the Indian Constitution.
The foremost question before Supreme Court in this case was whether Section 14(1)(e) of the Delhi Rent Control Act is violative of the doctrine of equality as embodied in the Article 14 of the Indian Constitution?
Supreme Court held that “Section 14(1)(e) of Act is violative of the doctrine of equality embodied in Article 14 of the Constitution, in so far as it discriminates between the premises let for residential and non-residential purposes, when the same are required bonafide by the landlord for occupation for himself or for any member of his family dependent on him and restricts the landlord’s right to seek eviction of the tenant from the premises let for residential purposes only.”
Supreme Court further observed that “there is no denial of equality nor any arbitrariness in the second limb of Section 14(1)(e) of the Act, read in the manner contended for by the appellant. Article 21 is not violated so far as the landlord is concerned. The rent restricting Acts are beneficial legislations for the protection of the weaker party in the bargains of letting very often. These must be so read that these balance harmoniously the rights of the landlords and the obligations of the tenants.”
However, Supreme Court clarified that it is not striking down Section 14(1)(e) DRC Act completely as the complete Section is not violative of Article 14 of the Constitution, rather only the part which provides remedy only in case when the premises are being let out for residential purposes.
Thus in terms of the Judgment of the Hon’ble High Court Supreme Court , the provision of Section14(1)(e) is to be read as under:
“that the premises are required bona fide by the landlord for himself or for any members of his family dependent on him, if he is the owner thereof, or for any person for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable accommodation.”.
CONCLUSION
Before the Satyawati Sharma judgment, the premises let out for commercial purposes were not having any remedy to get the premises vacated under the Delhi Rent Control Act, which was leading to the violation of the rights of landlords.
With the passage of time and more and more cases coming forward, Supreme Court through its landmark judgment modified the part which provides remedies only to the premises being let out for residential purposes and came as a savior for landlords who have let out premises for commercial purposes as well.
There has been a definite shift in the Court’s approach while interpreting the rent control legislations. Mohinder Kumar and Others vs. State of Haryana and Another [1985 (4) SCC 221], Prabhakaran Nair and Others vs. State of Tamil Nadu and Others (supra), D.C. Bhatia and Others vs. Union of India and Another [1995 (1) SCC 104] and C.N. Rudramurthy vs. K. Barkathulla Khan [1998 (8) SCC 275]. In these and others case, the Court consistently held that the paramount object of every Rent Control Legislation is to provide safeguards for tenants against exploitation by landlords who seek to take undue advantage of the pressing need for accommodation of a large number of people looking for a house on rent for residence or business in the background of acute scarcity thereof. However, a different trend is clearly discernible in the latter judgments.