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Introduction

The enactment of the East Punjab Urban Rent Restriction Act, 1949 (the Rent Act) in Punjab was a fallout of the Second World War. In order to raise additional revenue needed to meet the expenses of the war, the Punjab Immoveable Property Tax Act, 1940 was brought on the Statute Book. Under this Act, afresh tax was imposed on urban immoveable property to mobilise additional finances for the Government. Fearing that the landlords might pass on this extra burden to their tenants because of the growing shortage of accommodation in the urban areas, the Punjab Urban Rent Restriction Act, 1941 was brought on the Statute Book. The object of the Act was explicitly stated and reads as follows:1
An Act to restrict the increase of rent of certain premises situated within the limits of urban areas and the eviction of tenants therefrom.

The foremost purpose of the Act of 1941 is: (i) to determine the fair rent which tenants have to pay; (ii) to protect tenants from illegal and unreasonable eviction. Section 5(1) of the Act' completely prohibited any increase in the standard or agreed rent after 1st January; 1939. Through this provision, it was ensured that rent was not increased by the landlords due to the imposition of the new tax. The expression 'standard rent' was defined to be the rent of the premises as it existed or would have existed on 1st January, 1939. Thus 1939 was kept as the base year and the rent payable for the premises as on 1st January, 1939 was to be treated as standard rent payable by a tenant to his landlord. The expression 'fair rent' was introduced by the Punjab Rent Restriction Act, 1947 (as further amended by East Punjab Act of 1948), which replaced the Act of 1941. Keeping in view the fact that the cost of construction was on the increase, the legislature, through Section 4 of the Act, prescribed the procedure to determine fair rent of the premises. Under the Act it was provided that, firstly, the basic rent of the premises was to be determined by keeping 1939 as the base year. Thereafter to neutralise the extra cost of construction a particular percentage of the basic rent was to be allowed as the increase on it so as to make it fair rent in the overall context.2

1 2

Jauhar, Dr. D.N., RENT MATTERS ON TRIAL, 1998 Ed., pp. 99. Ibid., pp. 100.

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It is the same Section 4 of the Act of 1947 which continues to be operative for ascertaining the fair rent even in 1997. The provision, which per se was just, fair and reasonable at the time it was introduced in the Act, has now turned out to be most in equitable, unfair and unjust as it fails to give due cognizance to the high costs of construction and other inflationary trends in the economy of the country. Since a change in the statute is the exclusive domain of the legislature, the Courts have been helpless spectators of the sheer apathy of the legislature towards landlord-tenant relations.

Meaning of Fair Rent

The expression fair rent is not defined in the Punjab Rent Restriction Act 1947. However, the expression fair rent would generally mean that a rent payable by the tenant to the landlord is just and reasonable. It should neither be, oppressive for the tenant nor too meager for the landlord. The word 'fair' means just equitable, impartial, unbiased, dispassionate, uncoloured or objective.3 The term 'rent' has been defined as a piece of property that the owner allows another to use in exchange for a payment in services, kind or money.4 Putting the two terms together, the expression 'fair rent' would mean a rent payable by the tenant to his landlord which is just, equitable, and reasonable. Ordinarily the rent to be paid or received in respect of an accommodation, is purely a matter of contract, and therefore the ordinary connotation of the term rent is agreed rent, or contractual rent, but the legislatures have stepped into the field of this free contract and have put certain restrictions in the matter of recovery and realisation of rent, by prescribing the yardstick on the basis of which alone the rent would be recoverable: Such rent which is to be fixed and determined within the frame work prescribed by law, is termed as 'fair rent, or 'standard rent'.5 The prefix standard or fair to the term 'rent' itself denotes that it is something distinct from a contractual rent. 'Standard rent' means the ideal rent; recognised, and, approved by the statute as legitimate and lawful considerations to be paid by the tenant for enjoyment of the demised property to the landlord. It is the rent which the law presumes to be reasonable and legitimate, fair and honest, an ideal bargain between a willing lessor and willing lossee
3 4

Websters Third New International Dictionary, 1986 Vol. 1, pp. 815. Ibid., Vol 3, pp. 1923. 5 Aggarwal, Sukh Dev, Cases & Material on Rent & Eviction Laws, 2009, pp. 1127.

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uninfluenced by any extraneous circumstances, and which may afford a grounding test of reasonableness. An inflated or debated rate of rent, based upon fraud, emergency, relationship, any such other considerations may take it out of Bonds of reasonableness. By enacting the provisions relating to determination of fair rent, the legislature, lays down the norms of reasonableness in regard to the rent payable by the tenant to the landlord. Any rent which exceeds the norm of reasonableness, is regarded by the legislature as unreasonable or excessive and is also made irrecoverable and penal also.6 The very word "standard" is indicative that it is a 'model' or 'ideal' in the eyes of law. Similarly, the expression "fair rent" means the rent which is fair and proper in the eyes of the law.

Determination of Fair Rent


Section 4 of the Rent Act reads: Determination of fair rent7- (1) The Controller shall on application by the tenant or landlord of a building or rented land fix the fair rent for such building or rented land after holding such inquiry as the Controller thinks fit. (2) In determining the fair rent under this Section, the Controller shall first fix a basic rent taking into consideration a) the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months prior to the 1st January, 1939; and b) the rental value of such building or rented land if entered in property tax assessment register of the municipal, town or notified area committee, cantonment board, as the case may be, relating to the period mentioned in clause (a); (3) In fixing the fair rent of a residential building8 the Controller may allow, if the basic rent(i) in the case of a building in existence before the 1st January, 1939a) does not exceed Rs. 25 per mensem, an increase not exceeding 8-1/3 percent on basic rent; b) exceeds Rs. 25 per mensem but does not exceed Rs. 50 per mensem, an increase not exceeding 12-1/2 percent on such basic rent;
6 7

Deewan Daultrai v. New Delhi Municipality, AIR 1980 SC 541. Multani, Balbir Singh, Rent Restriction Law in Punjab, Haryana, H.P., 2006, pp. 111, 112. 8 Any building which is not a non-residential building.

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c) exceeds Rs. 50 per mensem, an increase not exceeding 25 percent on such basic rent; (ii) in the case of a building constructed on or after the 1st January, 1939a) does not exceed Rs. 25 per mensem, an increase not exceeding 25 percent on such basic rent; b) exceeds Rs. 25 but does not exceed Rs. 50 per mensem, an increase not exceeding 37-1/2 per cent on such basic rent; c) exceeds Rs. 50 per mensem, an increase not exceeding 50 percent on such basic rent. (4) In fixing the fair rent of a scheduled building9 the Controller may allow, if the basic rent(i) in the case of a building in existence before the 1st January, 1939a) does not exceeds Rs. 25 per mensem, an increase not exceeding 13-1/3 percent on such basic rent; b) exceeds Rs. 25 but does not exceed Rs. 50 per mensem, an increase not exceeding 17-1/2 percent on such basic rent; c) exeeds Rs. 50 per mensem, an increase not exceeding 30 per cent on such basic rent; (ii) in the case of building constructed on or after the 1st January, 1939a) does not exceed Rs. 25 per mensem, an increase not exceeding 30 per cent on such basic rent; b) exceeds Rs. 25 but does not exceed Rs. 50 per mensem, an increase not

exceeding 42-1/2 per cent on such basic rent; c) exceeds Rs. 50 per mensem, an increase not rxceeding 55 per cent on such basic rent. (5) In fixing the fair rent of non-residential building10 or rented land the Controller may allow, if the basic rent(i) in the case of a building in existence before the 1st January, 1939, or in the case of rented landa) does not exceed Rs. 50 per mensem, an increase not exceeding 37-1/2 per cent on such basic rent;

A residential building used by a person who is engaged in profession mentioned in Schedule I, partly for his residence and partly for professional services. 10 A building which is solely being used for commercial purposes.

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b) exceeds Rs. 5o per mensem, an increase not exceeding 50 per cent on such basic rent; (ii) in the case of a building constructed after the 1st January, 1939a) does not exceed Rs. 50 per mensem, an increase not exceeding 50 per cent on such basic rent; b) exceeds Rs. 50 per mensem, an increase not exceeding 100 per cent on such basic rent. (6) Nothing in this section shall be deemed to entitle the Controller to fix the fair rent of a building or rented land at an amount less than the rent payable for such building or rented land under a subsisting lease entered into before the first day of January, 1939. Sub-section (1) of Section 4 enjoins upon the Controller to fix fair rent of a building or rented land on an application made by the tenant or the landlord after making such enquiries as he may think fit. Sub-section (2) enjoins upon the Controller to first determine the basic rent keeping 1938 as the base year of rent for similar accommodation and also taking in account the rental value of the premises as reflected in the Municipal records. Once the basic rent has been determined then the controller may allow certain percentage of increase on that for residential, scheduled and non-residential building as provided in subsections (3) (4) and (5) respectively. Sub-section (6) restrains the Controller from fixing a fair rent, for the premises, less than the one payable under a subsisting lease entered into before 1st January 1939.11 It is to be clearly understood that the determination of fair or standard rent is neither reduction of agreed rent, nor enhancement of agreed rent. It is a rent which is determined as a lawful rent, under the provisions of the Rent Control Laws, What it is so determined and fixed, it supersedes the contractual rent. It may be less or more then the contractual rent, therefore if a tenant files an application for fixation of fair rent, alleging that the rent agreed is excessive, the landlord in his reply may also claim that the rent agreed is low and in such proceedings, initiated by the tenant for reduction of contractual rent, the R. C. A. would be empowered to determine and fix the fair rent, which may exceed the contractual rent. The reason being that it is the proceeding for determination of fair rent, and not for reduction or enhancement of the rent.12

11 12

Jauhar, Dr. D.N., RENT MATTERS ON TRIAL, 1998 Ed., pp. 103. Goverdhan v. Phoolchand, AIR 1953 MB 253.

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However, it is to be clearly understood that the provision relating to payment of fair rent would only be operative when it is determined. Till the fair rent is determined, the rent payable by the tenant to the landlord would be the 'contractual rent' or agreed rent. The contractual rent is to hold field till fair rent is determined and is substituted for the contractual rent.

Who Can Apply for Fixation of Fair Rent?

Landlord as well as the tenant can apply to the Controller for fixation of fair rent. For filing an application under Section 4 of the Act, the prerequisite is that there must exist the landlord - tenant relationship between the parties. The tenancy in question may be a contractual tenancy or a statutory tenancy. The landlord-tenant relationship should emerge from a legal contract between the parties. The two parties to the lease must be covered by the meaning of the terms 'landlord'13 and 'tenant'14 as defined in Section 2 of the Act. The parties to the proceedings under Section 4 of the Act must possess the status of' landlord;' and 'tenant'. Thus unless a person enjoys the legal status of a tenant, he cannot seek the fixation of fair rent from the Controller.15 In Dr. ES. Rikhy vs. New Delhi Municipal Committee,16 the Supreme Court has held that if the person in occupation of a house or a shop is of a status other than a tenant, he will not be entitled to apply under it Section 4 of the Act even if he is paying a sum of money to the owner of the building which he is occupying. A licensee has no locus standi under Section 4 of the Act. Similarly in TirathRam vs. Dalip Singh,17 the petitioner claiming to be a tenant had applied for fixation of fair rent under section 4 of the Act. The landlord claimed that the occupant was merely a licensee and thus ineligible to file an application under section 4 of the Act. Accepting the plea of the landlord, the Court held that it is a tenant and not a licensee who can file an application under section 4 of the Act.

13 14

Section 2(iii) - Landlord is any person who is receiving rent. Section 2(x) - Tenant is a person holding the land till the expiration of tenancy. 15 Jauhar, Dr. D.N., RENT MATTERS ON TRIAL, 1998 Ed., pp. 103. 16 (1962)64 P.L.R. 699. 17 1981 (1) RCJ 279.

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Since sub-letting is not permitted under the Act, rather it is one of the grounds for the eviction of the tenant, except when it is made with written consent of the landlord, a subtenant will not be construed as tenant and hence will not be entitled to ask for the fixation of fair rent. However, when a sub-tenant has been lawfully inducted by the tenant, then he too is a tenant within the meaning of the term and will be entitled to ask for fixation of fair rent. An alleged subtenant claiming and proving that he is directly a tenant under the landlord will also, be entitled to ask for the fixation-of fair rent.

Mechanism for Fixation of Fair Rent

Section 4 of the Act provides for the method according to which the Controller can determine and fix the fair rent, but does not define the term 'fair rent. The Controller cannot fix the fair rent of a building or rented land suo motu but can do so only on an application filed by the landlord or the tenant. When an application, for the fixation of fair rent is made to the Controller, it is mandatory for him to hold an inquiry, as he thinks fit, and then fix the fair rent. Clause (2) of Section 4 enjoins upon the Controller to first determine the 'basic rent' and then, if he thinks it reasonable, he may allow the increase of certain percentage over the basic rent. Thus, 'fair rent' is the 'basic rent' increased by certain percentage varying according to the quantum of basic rent well as the purpose for which the premises are used and the period of their construction. However, as per sub-section (6), "the fair rent cannot be fixed at amount less than the rent payable under a subsisting lease entered into before 1st January, 1939.18 While ascertaining the basic rent of the building or rented land, the Controller has to take into consideration two factors i. the rent prevalent in January, 1938 in that locality for similar accommodation in similar circumstances, and ii. the rental value of the premises as recorded in Property Tax Register of the Municipal Committee.

18

Sarin, H.L., RENT RESTRICTION IN PUNJAB, HIMACHAL PRADESH AND CHANDIGARH, 1985, Vol. I, pp. 157.

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The quantum of Property Tax chargeable is directly linked to rental value of that property. A particular value is fixed as property tax which is to be paid by owner to local bodies. If a building is occupied by a tenant, value which is payable by the tenant to the landlord is rental value of that property. The expression 'similar circumstances' has not been defined 'in the Act. Normally the expression connotes like-the same', 'close to the same' or 'identical to the same'. In the context of sub-section 2(a); the three expressions, namely, 'in the locality', 'same or similar accommodation', 'in similar circumstances' have been made use of: To make out a case under this sub-section, the building to be compared must be situated in the same locality: secondly, the building, which is to be sample for the prevalent rent in 1938, must be of the same type or with similar accommodation; and thirdly, the two buildings must be in existence in similar circumstance. Similar would generally mean having sameness in essential particulars. It may be practically impossible to have identical buildings. Some difference of varying degree can always be there and it may not be possible to lay a hard and fast rule as to cover up that difference. When it is practically not possible to have two identical buildings which existed in 1938, then the rule of more or less similar can be invoked to determine the basic rent of the building.

Increase on Basic Rent


Once the basic rent of the building has been ascertained, sub-sections 3, 4 and 5 of Section 4 permit the Controller to allow certain percentages of increase in case of residential, scheduled and non-residential buildings, respectively. However, the increase under these sub-sections is not automatic but discretionary. If the Controller is satisfied that an increase is called for, then he will fix the fair rent by adding such increase. The permissible increase about different types of building again depends upon the fact as to whether the building in question existed prior to 1st January, 1939 or came into existence on or after 1st January, 1939. The permissible increases are given at the next page:

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Residential Building Building Basic Rent existing prior to1.1.1939 Permissible Building Basic Rent increase on existing on or after Basic rent 1.1.1939 Permissible increase on Basic rent

Upto Rs.25/- Upto 8 1/3 % Exceeds Upto 12 % Rs.25/- and upto Rs. 50/Exceeds Rs.50/Upto 25%

Upto Rs.25/- Upto 25 % Exceeds Upto 37 % Rs.25/- and upto Rs.50/Exceeds Rs.50% Upto 50%

Scheduled Building Building existing prior to1.1.1939 Basic Rent Permissible increase on Basic rent Upto 1/3% 13 Building existing on or after 1.1.1939 Basic Rent Permissible increase on Basic rent Upto 30% Upto 42 % Upto 55 %

Upto Rs.25/Exceeds Rs.25/- and upto Rs. 50 Exceeds Rs.50/-

Upto Rs.25% Exceeds Rs.25/- and upto Rs. 50 Exceeds Rs.50/-

Upto 17 % Upto 30 %

Non-Residential Building / Rented Land Building existing prior to1.1.1939 Basic Rent Permissible increase on Basic rent Upto 37 % Upto 50% Building existing on or after 1.1.1939 Basic Rent Permissible increase on Basic rent Upto 50% Upto 100%

Upto Rs.50/Above Rs.50/-

Upto Rs.50/Above Rs.50/-

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It is evident from the above that these figures of Rs. 25/- or Rs. 50/- and the increases thereon from 8 1/3% to 100% were fixed in the forties when inflationary trends had not hit the rupee value. In the present context, more than seven decades after the Act became operative, these figures are totally incommensurate with the increasing devaluation of currency. Even with regard to the old properties which came up in the thirties or the forties, the fair rent fixed for them must have become irrelevant by the fifties. In view of the high rate of inflation, these figures of Rs. 25/- or Rs.50/- for fixing the fair rent are the most unfair feature of the Act.

Agreed Rent as Fair Rent

If there is sufficient evidence available either establishing the prevailing rent of similar accommodation in similar circumstances or there is the annual assessment value concerning the building available in the municipal register as on 1st January, 1938, then the prevailing rent or the rental value shall be taken as basic rent. On this basic rent the Controller may allow the permissible percentage of increase, as already discussed above, and fix it as fair rent. The difficulty arises in such cases where the party making the application or both the parties fail to lead evidence as required by clauses (a) and (b) of sub-section (2). In such cases the Controller, even after making enquiry may be unable to ascertain the basic rent of the premises. Although the enquiry by the Controller does not mean that he has to go about the streets of the town to ascertain the basic rent, yet the controller cannot decline to fix the fair rent for want of evidence or proof under sub-section 2(a) and (b). This is clearly evident from the opening sentence of Section 4 which makes it mandatory for the Controller to fix the fair rent by putting it as "The Controller shall on an application..." In view of the term "shall" used in Section 4(1), the Controller cannot escape his duty to fix the fair rent even when he has no material on record to determine the basic rent under clauses (a) and (b). To overcome the difficulty as envisaged above, the Courts have found a way out by holding that the agreed rent should be treated as fair rent. In Ved Parkash vs. Puran Singh19, it was held that where the parties fail to adduce evidence to determine basic rent or fair rent, the Rent Controller could not create evidence one way or the other. It was further

19

1977 (2) RCJ 831.

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held that in such cases the agreed rent between the parties will be the fair rent of the building.

Applicability to Chandigarh

The City of Chandigarh did not exist before 1952. It was under the Capital Project Act, 1952 that by acquiring a large piece of land comprising of many small villages, the Capital of Punjab was established and the city was named as Chandigarh. After reorganisation of 1966, Chandigarh, with some 25 adjoining villages, was declared to be a Union Territory. As the city itself neither existed in 1938 not it has had a local body since its inception in 1952, it is not possible to determine the basic rent for any building under section 4 (2) (a) and (b) of the Act. In the absence of any basic rent, the agreed rent has to be treated as fair rent. It is precisely for this reason that there are no cases of fair rent being pursued in the courts of the Rent Controller.

Constitutional Validity

The growing dissatisfaction with the outdated Punjab Rent Act was evident when the validity of the Section 4 of the Act was challenged before the Apex Curt in Sant Lal Bharti vs. State of Punjab20. Firstly the provision was attacked on the ground that it was ultra vires the constitution and unreasonable in as much as the section provides that rent prevalent in 1938 be the basis for the determination of the fair rent. It was urged that pegging the rent prevalent in 193 8 as the basic rent was inequitable and unjust in the background of the tremendous rise in prices. Repelling the argument, Sabyasachi Mukharji J (as he then was) on the behalf of the Bench observed:

20

AIR 1988 S.C. 485.

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But it has to be borne in mind that certain increases have been provided for in S.4 from the rent prevalent in 1938. It must, however, be remembered that the Act was passed as the preamble of the said Act which states, inter alia, "to restrict the increase of rent". One of the objects of the Act was to restrict the increase in rent. With that object the Act has provided certain provisions as to fixation of the fair rent. Secondly, it was contended that the provisions of the Rent Act in Tamil Nadu, Assam, Tripura and the adjoining State of Haryana for fixation of fair rent were far more fair, just and reasonable in comparison to Section 4 of the Punjab Act. Dismissing this argument, the Apex Court observed: We are unable to so accept this contention because each legislature in the several States has provided the method of determination of fair rent on the basis of local conditions, as judged to be, by each such legislature. It is well settled that the legislative wisdom of such legislation is not a ground for which the validity of the Act can be challenged. The Apex Court then went on to add: It must be the function of the legislature of each State to follow the methods considered to be suited for that State, that would be no ground for judging the arbitrariness of unreasonabless of a particular legislation in question by comparison. What may be the problem in Madras may not be the problem in Punjab. It most, however, be borne in mind that the Act in question was passed in 1949 and it pegged the rent prevalent in the similar houses in 1938 and as such is not unreasonable per se. The rises started tremendously after the end of the Second World War after the partition of the country. In that view of the matter, we cannot say that per se there is unreasonableness in fixing the prices in 1938 level. Having regard to the specific preamble of the Act we find nothing unreasonable in the Scheme contemplated under S.4 of the present Act. If we confine our attention to technical grounds, then it has to be agreed that the case has been correctly decided. But if we take note of the totality of circumstances, then it would not be wrong to say that the Apex Court missed a great opportunity to remedy the ills under Section 4 of the Act. In dismissing the petition on technical grounds, the learned Judges perhaps forgot that the Apex Court had been intervening in the rent

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matters to enlarge the scope of various provisions in order to cope with the changing socio-economic scenario in the country.21

Ancillary Provisions

Sections 5 to 9 of the Act are ancillary to Section 4 under which fair rent is fixed by the Controller. Section 5 of the Act22 provides that after fixation of fair rent under Section 4, if the landlord makes additions, alterations or improvements to the rented premises at his own cost, he may request for a further revision of the fair rent in view of the improvements made by him. The controller can allow an increase in fair rent keeping in view the rent of similar premises with similar improvement in that locality. Section 6 of the Act23 prohibits a landlord from charging any premium or lump sum payment like Pagri or key-money or Salami from the tenant. The only advance permissible for the landlord is one month's rent. Any agreement allowing the landlord to charge anything in excess of fair rent shall be null and void under this Section.
21

Gulraj Singh Grewal v. Dr.Hardans Signh, 1993 (2) SCC 68; Mohan Lal v. Jai Bhagwan, AIR 1988 SC 1035; Gurdial Batra v. R.K. Jain AIR 1989 SC 1841.
22

S.5 Increase in fair rent in what capes admissible - when the fair rent of a building <or rented land has been fixed under section 4, no further increase in such fair rent shall permissible except in cases where some addition, improvement or alteration has been carried out at the landlord's expense and if the building or rented land is then in the occupation of a tenant, at his request; Provided that the fair rent as increased under this section shall hot exceed the fair rent payable under this Act for similar building or rented land in the same locality with such addition, improvement or alteration and it shall not be chargeable until such addition, improvement or alteration has been completed: Provided further that any dispute between the landlord and tenant in regard to any increase claimed under this section shall be decided by the Controller: Provided further that nothing in this section shall apply to any periodical increment of rent accruing under any subsisting agreement entered into before the first day of January, 1939.
23

Section 6 of the Act reads : 6. Landlord not to claim anything in access of fair rent - (I) Save as provided in section 5, when the Controller has fixed the fair rent of a building or rented land under Section 4a. the landlord shall not claim or receive any premium or other like sum in addition to fair rent or any rent in excess of such fair rent, but the landlord may stipulate for and receive in advance an amount not exceeding one month's rent; b. any agreement for the payment of any sum in addition to rent or of rent in excess of such fair rent shall be null and void. c. Nothing in this section shall apply to the recovery of any rent which became due before the first day of January, 1939.

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Section 7 of the Act24 prohibits a landlord from charging any fine or premium for the grant, renewal or continuance of a tenancy. Section 8 of the Act 25 provides for the recovery of any sum paid by tenant to his landlord in violation of the rules under Sections 4 to 7 of the Act. The time limit to recover any such amount is a period of six months from the date of payment. Section 9 of the Act26 permits increase in fair rent when a fresh levy, cess or tax is imposed on the rented property by a competent authority. This provision is attracted in those cases where either a fresh tax has been imposed or an existing tax rate has been increased by the local authority. Interestingly, the introduction of this provision was contrary to the objectives of the Act of 1941 which prohibited the landlords from passing on the burden of additional taxes to the tenants.

24

Section 7 of the Act reads: S.7.Fine or premium not to be charged far grant, renewal or continuance of tenancy (1) No landlord shall in consideration of the grant, renewal or continuance of a tenancy of any building or rented land require the payment of any fine, premium or any other like sum in addition to the rent. (2) Nothing in this section shall apply to any payment under any subsisting agreement entered into before the first day of January 1939.
25

Section 8 of the Act reads: S.8. Rent which should hot have been paid may be recovered - Where any sum has, whether before or after the commencement of this Act, been paid which sum is by reason of the provision of this Act irrecoverable, such sum shall, at any time within a period of six months, after date of the payment, or in the case of a payment made before the commencement of this Act, within six months after the commencement thereof, be recoverable by the tenant by whom it was paid or his legal representative from the landlord who received the 'payment or his legal representative, and may without prejudice to any other method of recovery be deducted by such tenant from any rent payable within such six months by him to such landlord. (2) In this section the expression "legal representative'' has the same meaning as in the Code of Civil Procedure, 1908 and includes also in the case of joint family property, the joint family of which the deceased person was a member.
26

Section 9 of the Act reads: S.9. Increase of rent on account of payment of rates etc., of local authority, but rent not to be increased on account of payment of other taxes etc. (1) "Notwithstanding anything contained in any other provision of this Act a landlord shall be entitled to increase the rent of a building or rented land if after the commencement of this Act a fresh rate, cess or tax is levied in respect of the building or rented land by any local authority, if there is an increase in the amount of such rate, cess or tax to be levied at the commencement of the Act: Provided that the increase in rent shall not exceed the amount of any such rate, cess or tax or the amount of the increase in such rate cess or tax as the case may be. (2) Notwithstanding anything contained in any law for the time being in force or any contract, no landlord shall recover from his tenant the amount of tax or any portion thereof in respect of any building or rented land occupied by such tenant by arty increase in the amount of the rent payable or otherwise, save as provided in sub-section (1).

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Conclusion

From the analysis of the cases in the Apex court as referred to above, it was noticed that the conflicting expirations of the landlords and tenants over the quantum of rent are the main causes of litigation between the two. A tenancy cannot be created in an atmosphere of distrust or suspicion. No doubt in almost all the cases of prospective tenancies, the landlord is in a position to dictate terms and the tenant has no option but to agree to all that is being dernanded by the landlord. At this juncture, equitably speaking, any law governing the landlord-tenant relations must side with the tenant as he is disadvantageously placed vis-avis the landlord. However, once the tenant acquires the statues of a statutory tenant, the position reverses. Now it is the landlord who is at the receiving end. In ail tenancies, the landlord demands and gets the market rent from the tenant at the time of the creation of the tenancy. With the passage of time, due to inflation, the market rent of similar premises increases considerably. As a result, the landlord starts feeling that he is receiving a rent which is far less than the market rent. If he hit tenant to increase the rent then the whole trouble starts. The tenant will either refuse to increase the rent or will offer an increase which is so meagre that it means nothing to the landlord. All through this period, the relations between the two keep on worsening. Finally the landlord starts working in the direction of evicting the tenant. He normally tries extra-legal methods like threats, making false police cases, assault through goondas, etc. The tenant also counters the landlord on a similar pattern. If nothing comes out of all this, then a case is filed by the landlord seeking the eviction of the tenant on one or the other ground under section 13 of the Act. Thus the root cause of most of the disputes between the landlord and tenant happens to be the factor of rent. It is normal that the market rent of the day becomes almost marginal or insignificant after every three to four years with the prevalent rate of inflation.27 It is a matter of common knowledge that these days a tenant will not vacate the rented premises even when he does not require it. The tenant normally expects the landlord to pay him lump sum the total of the rent paid by him during the tenancy besides some premium to vacate the premises. It needs no emphasis that as a social welfare measure, the purpose of any rent legislation is to harmoniously regulate the relations between the landlord and the tenant and not to add to
27

Jauhar, Dr. D.N., RENT MATTERS ON TRIAL, 1998 Ed., pp. 134, 135.

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the conflict and hostility between them. But the provisions relating to the rent structure in the existing Act are the root cause of most of the disputes between landlords and tenants. The field survey has shown that while there is an acute problem of housing in Chandigarh, the landlords are keeping their residential buildings, or parts thereof, vacant as they not only have serious and legitimate apprehensions about the prospective tenants taking advantage of section 4 of the Act, but also find no incentive in letting out their buildings. This lack of incentives has also adversely affected the construction activity, adding further to the acuteness of the paucity of residential buildings to provide housing to the increasing population in the cities. It may practically not be possible to eliminate the gap between the landlord's and the tenant's conflicting aspirations, but a serious effort needs to be made to reduce the gap and regulate the landlord-tenant relations in a reasonable manner. Only then it may become possible that unused, locked houses may become available to the prospective tenants desperately looking for a shelter. The first step in the direction of overcoming the problems discussed above would become possible only when sections 4 to 9 of the Act are repealed. This is a necessary pre-requisite for bringing in or introducing a balanced rent structure which is not only fair but is also seen as reasonable by the landlords as well as the tenants.

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Bibliography

Books referred; 1. Aggarwal, Sukh Dev, CASES & MATERIAL ON RENT & EVICTION LAWS (1900 to 2099), New Delhi, The Bright Law House, 2009 Ed. 2. Jauhar, DR. D.N., RENT MATTERS ON TRIAL IN PUNJAB, HARYANA, CHANDIGARH & HIMACHAL PRADESH, Chandigarh, Jain Law Agency, 1998 Ed. 3. Multani, Balbir Singh, RENT RESTRICTION LAW IN PUNJAB, HARYANA & HIMACHAL PRADESH, Chandigarh, Chawla Publications (P) Ltd., 2nd Ed, 2006.

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