Joginder Singh Toor

EVERY law has its age and utility. In India different States at different points of time but under the same compelling circumstances; to control the arbitrary increase in rent and to provide some benefits to the tenants even to the disadvantage to the landlords passed Rent Control Acts. These had one uniform provision, freezing of the rent. The legislations specifically debarred the increase in rent. However, a provision for fixation of fair rent by the Controller was provided but his were tied. They were to observe the norms and rates of rent prevailing during the period when the enactment was made. For example the Punjab Rent Control Act was passed in 1940. It provided for the determination of fair rent by taking into consideration the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the 12 months prior to 1st January, 1939. The increase could not exceed from 8¼% to 25% of the basic rent prevailing in 1939. Similar norms were provided for schedule and non-residential buildings. It was specifically stated that rent once fixed, no further increase in such fair rent was permissible. The landlord was prohibited from making or receiving any premium or other like sum in addition to the fair rent. Any agreement for payment of any sum in addition to rent or of rent in excess of such fair rent was considered as null and void.

The controversy between tenants and landlords reached the Supreme Court, in which it was held, “it is common knowledge that there is acute shortage of houses, various factors have led to this problem. The laws relating to letting and of landlord and tenant in different States have from different state’s angles tried to grapple with the problem but it has become insoluble and litigation abounds.” The Court issued directions “the laws of landlord and tenant must be made rational, human, certain and capable of being quickly implemented.” This country very vitally and very urgently requires National Housing Policy if we want to prevent a major break down of law and order and gradual disillusionment of people. After all shelter is one of our fundamental rights. New National Housing Policy must attract new buildings, encourage and make available new spaces, rationalize the rent structure and rationalize the rent provisions and bring certain amount of uniformity though leaving scope for sufficient flexibility....... “A fast changing society cannot operate with unchanging law and pre-conceived judicial attitude.”

Six years thereafter, the Parliament of India passed Constitution’s (75th Amendment) in 1993 realising that operation of the rent control legislation, as are today in various States suffers from major weaknesses and has led to various unintended consequences. It noted the directions issued by the Supreme Court of India in Parbhakaran Nair’s case in 1987 and said in the statement of objects that laws should be simple, rational and clear. Legislation must come to an end quickly. The idea of National Rent Tribunal on all India basis with quicker procedure should be examined. As a result Article 323-B of the Constitution was amended so as to make “rent, its regulation and control and tenancy issues including the rights, title and interest of landlord and tenant”3 as a subject-matter of the Tribunals to be set up in India for various purposes.

Even the Constitution’s 75th amendment did not move the States either to amend the existing laws or to make new laws. The Supreme Court once again had to take note of it in3. The Supreme Court had to reiterate that “a statute which when enacted was justified, may with the passage of time become arbitrary and unreasonable.” It further observed that “the tenants are by and large, now getting an unwarranted benefit or windfall which can also be illustrated by taking an example of hypothetical tenant i.e. an Assistant in the Govt. of India posted at Bombay in the year 1948 was getting Rs.845.50 per month as salary and had taken premises on rent at Rs.100/- per month. He would be as such paying approximately 20% of his total emoluments by way of rent. That assistant in 1997 was getting total emoluments of Rs.11900/- per month but the permissible increase in the rent at the most makes RS.170/- from Rs.100/- which comes to 0.9% of his salary while he was paying 20% of his salary in 1948 as rent, taking all the facts and circumstances into consideration we have no doubt that the existing provision of the Bombay Rent Act relating to the determination and fixation of standard rent can no longer be considered as reasonable.”4

Thereafter the government India framed a Model Rent Control Legislation for the guidance of all the States for making changes in the existing laws so as to conform to the Model Rent Control Legislation.

In 1984 the Punjab Government formed a committee to revise East Punjab Rent Restriction Act,1949. The deliberations and proceedings of the committee could not be traced subsequently in the official record.

However, a bill was drafted known as Punjab Rent Bill, 1994 to supersede and substitute the 1949 Rent Act. Setting up of Rent Tribunals was part of the legislation. The Bill was passed unanimously by Punjab Vidhan Sabha in April, 1995 and the President of India assent in March, 1998. As per procedure laid down in the “Rules of Business” the bill was to be published in the gazette and date of its operation was to be notified which has not been done till date. For political reasons, in a meeting held on 13th September,1998, under the chairmanship of Parkash Singh Badal the then Chief Minister, it was decided to keep 1995 Act in limbo and take wholesome balanced approach in the matter. It was, however, admitted that the “old Act” had become obsolete. A sub committee headed by Balramji dass Tandon, the then Minister for Local Government, was constituted for the purpose. The committee was to make a report within a period of three months. After a lapse of 3 years and 5 months a Draft Amendment bill 2002 was submitted on 21.2.2002 for approval of the Governor. The Governor preferred the bill to be considered by new government after the result of February 2002 elections.

The Principal Secretary, Local Govt. submitted the Bill for consideration of the Council of Ministers on 21st May 2002 but the same was returned for assuring the compliance of the Supreme Court directions. Another committee was constituted and was entrusted the task of studying 1995 Act and Bill 2002 in the light of the observations of the Supreme Court in Rakesh Wahawan Vs Jagdamba Industrial Corporation case the committee submitted the report that The Amendment Bill, 2002 fails to conform to the judgment of the Supreme Court. It was also pointed out that Punjab Rent Act, 1995 meets the objectives of the new policy and its provisions adequately balance the interests of both landlord and the tenant. The Committee further said that it has no hesitation in recommending that 1995 Act be notified. As a result for taking further steps towards notification, the rules were got framed.

Various writ petitions were filed in the High Court of Punjab and Haryana requiring the Punjab Government to notify the 1995 Act. Every time the government assured the court that they are taking active steps. On 15.5.2006 the Punjab and Haryana High Court observed:

“We have seen the orders made in the proceedings from time to time and in particular those dated 19/10/2001,23/10/2001, 15/01/2002, 15/01/2002, 01/04/2002, 06/05/2002, and 20.o1/2003” and observed “that despite having sought time to notify the Act, no genuine effort seems to have been made so far. We find that the Rent Act was amended in the year 1995. This petition was filed in the year 2000 and despite the passage of six years and several undertakings given by the learned State counsel from time to time, no serious steps have still been taken. Accordingly, We direct the respondent-state to take a final decision in the matter and to notify the Act in terms of the undertakings given from time to time, within six months from today.”

The writ petition was disposed of with the above observations. In the meanwhile the election to the Punjab Assembly was due to be held in early 2007. Again for political reasons a Cabinet Sub Committee chaired by Rajinder Kaur Bhathal on 23rd of October,2006 said that the 1995 Act needs recasting, as such cannot be notified immediately. It was with a view to delaying the notification in view of the pending elections.

The Punjab government has signed a Memorandum of Agreement with Ministry of Urban Employment and Poverty Alleviation in March 2005. Another agreement was signed with the Government of India under “Jawaharlal Nehru National Renewal Mission”. Under both the agreements it was laid down that time bound implementation of various measures in regard to Housing, Urban Planning, Municipal Resources, and Urban Infrastructure would be made. Abolition of the Rent Control Act by 31 March 2007 is one of those conditions. Nothing has been done so far.

The government has drawn financial benefits under the scheme in violation of the agreement.

Meanwhile the high courts of Delhi, Kerala, Andhra Pradesh, Allahabad and Rajasthan have declared the provisions regarding freezing of rent as ‘discriminatory and violative of Article 14. Some High Courts have gone to the extent of saying that it is violative of Article 19(g) right to practice any profession or to carry on any occupation, trade or business.

With the passage of time a legislation, which was justified when enacted have become arbitrary and unreasonable with the change in circumstances. What was justified during the short period has turned out to be a case of hostile discrimination by lapse of time.

It is still unknown as to how long would it take to implement the Act passed in 1995 or its substitute, in compliance of 75th Amendment of the Constitution of 1993.

[Joginder Singh Toor is a senior advocate based in Chandigarh 91-9815133530. jogindersingh_toor@yahoo.com]

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