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Supreme Court gives relief to commercial landlords




For decades, the Indian Government and the legal system has been lopsided in favour of tenants, with the Rent Control Act being one-sided to protect tenants. The Act has reduced property rights, not letting landlords get their property back when they need the property for their own use, and not letting them raise rents in accordance with annual inflation trends. The Rent Control Act has scared landlords so much that there are many property owners who cannot envisage letting out their currently vacant properties for fear of not getting these properties back, or who let out properties on 11 month leases and get them vacated within 2 years so that properties do not get tenants who refuse to let go.
This situation had prevented the healthy growth of the market for tenancy and led to an artificial scarcity; so there was a great jubilation among property owners when the law was weakened some time back; the change allowed landlords to get their property back when they could demonstrate that they needed the property for their own needs, however, this was only for residential properties. Commercial properties were excluded. So you had the case where prime properties in commercial centers such as Connaught Place were on rent for decades old rentals of Rs. 100 per month; the landlord could only watch as their properties were used by tenants to make big money and they themselves got a pittance as rent. This would lead to a situation where the landlords would not invest anything on maintenance for these buildings. Finally the Supreme Court has corrected this, letting owners of commercial properties evict their tenants when they could prove that they needed the building:

For 50 years, tenants in shops and commercial premises in many prime areas of Delhi have had the upper hand over landlords. They lived without fear of eviction and paid a paltry rent as they were protected by laws that froze the amount negotiated decades ago. This special protection was because the law said that a tenant could be asked to vacate only residential premises, and not commercial property even if the premises were required for personal use. But all this has changed.


The court said the restriction on eviction of tenants from commercial premises was inserted in the law 50 years ago mainly because of the limited commercial space available in the city at that time. But that was a long time back. Now the scenario has undergone a sea change and a fairly large number of buildings and premises were now available on rent for non-residential and commercial purposes. Restricting landlords from seeking eviction of tenants from shops was no longer justified, the Bench said.

This is a judgment that was long awaited by landlords. There is no equitable reason why a landlord cannot get his / her property back when they need it. This judgment does not go all the way, given that it still does not give a way for a landlord to get rents raised to reflect current prices; one byproduct of this judgment however will be that landlords will try whatever tactic that they can to show that they need this property for their personal use and get the tenants evicted.




8 comments to Supreme Court gives relief to commercial landlords

  • sanjay mehta

    i would like to know which is the authority wera i can apply to vacate my rented property

  • subodh mehta

    I have one question regrding property law in Dapoli Ratnagiri.where we have 17 acres of land which is falsefully claimed by a local person.In ratnagiri and sindhudurga district.there are many cases where landowners are unable to keep their land for themselves. any local person can claim other persons land by just having 3 witnesses from the area.

  • Aditi

    I am also facing the same problem. We have rented our home 3 years back, bt now when we need the flat, tenant is not ready to move, as he is senior citizen we cant misbehave with him. and we need flat so urgently we cant wait, as court can long time to make the judgement. what should we do next. Kindly help

  • Aditi, if you consult your lawyer and armed with these recent judgments show this to your tenant, he may be prepared to be more amenable to moving now.

  • Aditi

    Dear Ashish,

    Thanks for your reply!! We have already consulted with few lawyers, they said that is a complicated case, try to settle down financially with him, as the tenantis also a sr.citizen we never knw wat would be the judgement, and tenant is nt behaving well with us, he is openly challenging us to go to court. But how can we trust the court, as one of our freind is fighting against the same scenario, and its been 15 yrs he is moving around courts. In case you know any further solution or info, pl inform.

  • rajesh Christain

    my tenet last two year left India with family do not pay rent
    i required house for own use please help me.

  • Raj

    Hi,

    Its pity that landlord suffers in the hands of tenant. Landlord purchases the property investing his hard earned money. Tenant just by paying 0.1% to 0.3% of property value as rent per month has right to not evict. Is this justified? Hardly the tenants pay 1 to 3% of the property value as rents in most of the cases in a year.

    I do agree for commercial properties there will be some kind of difficulties in vacating the premises as there will be a set business. Why the residential properties should have these benefits. Residental properties will not effect the tenant as there is always a scope of getting a new residential property if not at that locality then at some other locality.

    The law should change Landlord should have a right on his property. The best thing is if the owner gives in writing for 6 months time vacating the premisis, it should be the good time for the tenant to vacare the residential property. No Tenant should have right to stay in the property if given 6 months notice. Similarly for commercial properties 1 year time should be maximum for vacating the premises.

    If you see the number of cases going in courts are increasing at the rapid speed. In this scenario every landlord will have to go to court one time or the other. Why one should buy property give it on rent and get the headache? Just by paying fraction of the cost of the property why the tenant has to enjoy the so called rights?

    If any law maker is reading this will surely appreciate my point and will change the law in due course.

    Raj

  • Rajesh V.Christian
    Chakravati Street
    Anand-388001
    Gujarat
    rajchristianin@yahoo.com
    15.06.2009
    To.
    Respected Sir

    Sub :
    Help to Lanlord & Family Member His Tenat Migrate & permenanat
    Settlement USA Last three Years

    I Stay in Chakravati Street, Old S.T.Bus- stand Anand-388001 Gujarat INDIA withTwo married son and Ther Families on first floor of my house and I had aTenant on the Ground floor Namely Catherine Vipinchandra Palmer & Family Member they received December-2006 VISA for USA
    VIPINCHANDRA WILLAM PALMER BRITISH PASSPORT NO.75024218
    CHETHRINE VIPINCHANDRA PALMER INDIAN PASSPORT NO. A 4217316
    ASHITA JENIFAR VIPINCHANDRA PALMER INDIAN PASSPORT No. A 4217315
    BINAL JESION VIPINCHANDRA PALMER INDIAN PASSPORT No.A 4217404
    for Many Year who has Now Migrated to U.S.A. with her family for a permanent settlement. USA Address & Phone Number
    Name : VIPIN CHANDRA PALMER
    831 E ORANGEWOOD AVE,APT, C219
    ANAHEIM, CA 92802-4478 PH NO.714-996-1511
    USA
    Please healp me I appy some CIVIL Matter in Anand Distrik Court Gujarat India
    Party is not persent thats way court send Summance By Post USA Address.
    Your faithfully
    R.V.Christian

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