1. Introduction

This article contains a case study of the Delhi Rent Control Act case Standard Pharmaceuticals Ltd. Vs. Gyan Chand Jain Anr., 97(2002) DLT290. Various critical sections of the limitation act and the Delhi Rent Control Act are discussed in this case study.

Furthermore, the conditions under which a tenant can be asked to leave under the Rent Control Act are being discussed. The Supreme Court has answered various ambiguous questions and terms about which the Rent Control Act is silent. The case also addresses the issue of the jurisdiction of various courts under the act. So, this is the case study of the tenants eviction and the landlords rent increase.

2. Facts of the case

In 1968, the property in question was leased to Standard Pharmaceutical Ltd. Located at 24, Park Street, Calcutta. Fast forward to April 1, 1983, there was a rent adjustment, elevating it from Rs. 2,000/- to Rs. 2,500/-. Subsequently, on April 1, 1988, the rent experienced another increment, reaching Rs. 3,000/-.

Moving ahead to January 5, 1991, the landlord, invoking the amended Rent Control Act effective from December 1, 1988, issued a notice, effecting a 10% increase in rent. Consequently, the monthly rent escalated to Rs. 3,300/- until July 31, 1991.

However, the tenant, identified as the original appellant, failed to meet the revised rent. In response, the landlord initiated eviction proceedings before the Rent Controller. On February 14, 1994, the tenant, invoking Sections 6A and 8 of the D.R.C. Act, issued a notice to further raise the rent by 10%, from Rs. 3,300/- to Rs. 3,630/-, and concurrently filed a lawsuit.

In defense, the appellant contested the jurisdiction of the Civil Court under Section 50 of the Delhi Rent Control Act. Furthermore, they asserted that no cause of action existed and denied any increment in rent from Rs. 2,000/- to Rs. 3,300/-.

In the first paragraph of their written statement, the appellant contended that the rent was originally fixed at Rs. 2,000/-, with an additional payment of Rs. 1,300/- as service charges. They argued that any increase per the Delhi Rent Act should apply solely to the Rs. 2,000/- rent component, excluding the service charges. Notably, the appellant emphasized that no demand for an increase had been made in the eviction petition before the ARC, and the respondents continued to receive Rs. 2,000/- rent along with Rs. 1,300/- as service charges per month.

3. Petitioners contention

The notice, ostensibly increasing the rent by 10% on 14th February 1994, has been acknowledged. However, the argument posited is that if the initial rent was a mere Rs. 2,000, the logical escalation would cap at Rs. 2,200. Furthermore, its contended that the Civil Courts jurisdiction would remain intact, as the Rent Control Acts purview doesnt exclude premises with a monthly rent below Rs. 3,500, as elucidated in Section 3 (c) of the Delhi Rent Control Act.

The Appellate Courts refusal to condone the 55-day delay in filing the appeal is contested on multiple fronts. Firstly, the companys headquarters being in Calcutta is presented as a mitigating factor. Secondly, the delay is explained through an affidavit filed by the Counsel. Thirdly, a degree of confusion is asserted between the permissible 60 and 90 days for filing the appeal. Lastly, a plea is made for the Court to permit a substantive examination of the matter instead of dismissing it on the technicality of exceeding the limitation period.

4. Respondents contention

The inadequately explained delay provides justification for the learned Appellate Courts dismissal of the appeal and refusal to entertain the application for condensation of delay. Counsel for the respondent relies on Banwari Lal v. U.O.I.[1], arguing that the mistake of counsel cannot be deemed bona fide, emphasizing the necessity for a day-by-day explanation of the delay.

In reference to Pushpa Sen Gupta v. Susma Ghose[2], the respondent draws parallels with the judgment in Karnani (supra), particularly in paragraph 3. While the term rent lacks a specific definition, the Act implies a broader interpretation, encompassing not only the conventional rent but also payments related to amenities or services provided by the landlord under the tenancy terms. Section 8(3) underscores this perspective, considering furniture or fittings supplied for the tenants use, bringing agreements concerning other amenities within the Acts ambit.

Similarly, Sections 34 and 35 delineate the Acts reach to include the maintenance of essential supplies or services, incorporating the supply of electricity and emergency measures for additional services. These provisions signify that the Act encompasses tenancies entailing amenities or services to be maintained by the landlord. Failure to interpret the Act in this light could enable landlords to sidestep its provisions by imposing burdensome conditions on tenants regarding amenity supply as binding tenancy terms.

In Sewa International Fashions v. Smt. Suman Kathpalia and Ors[3], the learned single judge, referencing various precedents, addressed the contention that the suit, contended on grounds including the inclusive nature of rent concerning taxes, rates, and charges but excluding maintenance charges, should be computed accordingly. The judge framed a preliminary issue on whether the suit is barred under Section 50 of the Delhi Rent Control Act, ultimately determining that it is not barred based on the pleadings and circumstances presented by the parties.

5. Opinio juris

Addressing the first issue, the Appellate Court exercised its discretion favorably, granting approval to application C.R. No. 68/2001. This decision hinged on the precedent set by the Supreme Court in State of Haryana v. Chandra Mani[4]where the apex court, in a parallel situation, condoned a substantial delay of nearly 18 years. The Court underscored the importance of allowing parties to engage in substantive contestation rather than being hindered by procedural constraints.

Turning to the second issue, the definition of rent within the ambit of the Delhi Rent Control (DRC) Act came under scrutiny, given its absence in the legislation. The Supreme Court, drawing on Karnani Properties Ltd v. Augustin[5], articulated that in the absence of a statutory definition, the term rent should be construed in its ordinary sense. The ordinary meaning, as elucidated, encompasses all payments agreed upon by the tenant for the use and occupation of not only the building but also its furnishings, electric installations, and other agreed-upon amenities provided by the landlord. Consequently, the Court affirmed that the rent in question falls within the purview of the DRC Act, subject to control by the Rent Controller and other relevant authorities.

Referencing Radha Kishan Sao v. Gopal Modi and Ors[6] the Court, in a nuanced analysis, considered a scenario where the tenant, despite an agreement to pay furniture rent, deposited only the rent excluding furniture charges. The Supreme Court established a precedent, emphasizing that any subsequent agreement for an improved rent rate wouldnt affect the landlords entitlement to eviction under Section 11(1)(d) of the Bihar Buildings Lease Rent and Eviction Control Act. Notably, the Court held that default in payment of rent, as fixed by the Rent Controller, constitutes grounds for eviction, but defaults in furniture rent, agreed upon post-lease, do not fall within the purview of Section 11(1)(d) for eviction decree entitlement. Consequently, the Court rejected the appellants first contention, aligning its ruling with the derived jurisprudence.

6. Ratio decidendi

The proposition that service charges should not be encompassed within the term rent is untenable. However, the respondents contention gains merit by highlighting that in the cited case, both rent and service charges were explicitly stipulated in the lease deedan element absent in the present case where only the rent of Rs. 2,000 was specified. Consequently, in the context of Section 50 of the Delhi Rent Control (DRC) Act, the charges designated as maintenance fees, payable by the petitioner to the respondent, should be construed as falling within the broad scope of the expression rent.

Drawing from established case law, the court establishes a foundational assumption that service charges, amounting to Rs. 1,300 per month, should indeed be considered an integral component of the term rent. Hence, based on this interpretation and the applicable legal precedents, the court concludes that the rate of rent until March 31, 1994, stood at Rs. 3,300 per month.

7. Conclusion

The comprehensive nature of the term rent extends beyond its initial description in the landlord-tenant agreement. It encompasses payments directed towards maintenance charges for the leased premises and the provision of amenities to the tenant. The concept of rent is not restrictive; rather, it includes all payments agreed upon by the tenant for the utilization and occupancy not only of the physical structure but also for furnishings, electric installations, and various other amenities stipulated in the tenancy arrangement.

This expansive interpretation underscores that rent is a holistic concept, enveloping a spectrum of financial obligations borne by the tenant in exchange for the occupancy rights and the associated amenities provided by the landlord. The nuanced understanding of rent transcends mere monetary considerations related to the building, emphasizing the broader scope of financial commitments entailed in the tenancy agreement.

Citation

I. AIR 1963 1620 SCR supl.(2) 338

II. AIR 1990 SCR (2) 564, 1990 SCC (2) 651

III. 1999 VIAD Delhi 532, AIR 2000 Delhi 69, 82 (1999) DLT 104, 1999 (51) DRJ 591, (1999) 123 PLR 65

IV. AIR 1996 1623, 1996 SCC (3) 132

V. AIR 1957 309, 1957 SCR 20

VI. AIR 1977 ,1217 SCR 1977 (2) 984