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2013 Supreme(Del) 916
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN, J.
M/S ATMA RAM PROPERTIES PVT. LTD. – Plaintiff
Versus
M/S ALLIED MOTORS LTD. & ORS. – Defendants
CS(OS) 1206/2009
Decided on: 30th July, 2013
Mr. Sandeep Sethi, Senior Advocate with Mr. Ramesh Singh with Mr. Amit Sethi, Advocates
Mr. Neeraj Kishan Kaul, Senior Advocate with Ms. Diya Kapur and Ms. Manjira Dasgupta, Advocates for defendant No.1. Mr. Rajesh Yadav, Advocate for defendants No.3 and 4.
The main legal point established in the judgment is that a landlord must issue a compulsory notice for each increase in rent after every three years under Section 6A of the Delhi Rent Control Act, 1958.
Headnote:
Rent Control Act - Recovery of Possession - Delhi Rent Control Act, 1958 - Section 6A, Section 8, Section 67 of the Act, 1994 - Agreements dated 01st March, 1937, 25th August, 1943 and 31st July, 1946 - NDMC (Determination of Annual Rent) Bye-laws, 2009 - Atma Ram Properties Pvt. Ltd. vs. P.S. Jain & Co. - Atma Ram Properties (P) Ltd. vs. Escorts Ltd. & Anr. - Jeevan Diesels vs. Jasbir Singh Chaddha - Order 23 Rule 1(4) CPC
Fact of the Case:
The plaintiff filed a suit seeking recovery of possession of the suit premises and arrears and future damages for use and occupation against its tenant defendant no. 1-company through its Director, defendant no. 2 and also against defendant no. 3 and its partner defendant no. 4 who are sub-tenant with regard to a portion of the suit property. The plaintiff claimed that the defendants were not entitled to protection under Delhi Rent Control Act, 1958 due to increased rent exceeding Rs.3,500/- per month.
Finding of the Court:
The court found that the landlord must issue a compulsory notice for each increase in rent after every three years under Section 6A of the Act, 1958. It held that the increase in rent is not automatic and the landlord must exercise the entitlement in a particular manner. The court also ruled that house tax does not form part of the term monthly rent under the Act, 1958. The court dismissed the application as there was no admission calling for a judgment.
Issues: The primary issue involved whether a landlord has to issue a compulsory notice for each increase in rent after every three years under Section 6A of the Act, 1958 or can a landlord enhance the rent for any number of multiple of three years by a single notice or without any notice at all.
Ratio Decidendi: The court held that the landlord must issue a compulsory notice for each increase in rent after every three years under Section 6A of the Act, 1958. It ruled that the increase in rent is not automatic and the landlord must exercise the entitlement in a particular manner. The court also ruled that house tax does not form part of the term monthly rent under the Act, 1958.
Final Decision: The court dismissed the application as there was no admission calling for a judgment.
MANMOHAN, J.
I.A. 15081/2009 in CS(OS) 1206/2009
1. Present application has been filed by plaintiff under Order XII Rule 6 CPC seeking judgment on admission.
2. This suit has been filed by the plaintiff seeking recovery of possession of the suit premises, for arrears and future damages for use and occupation against its tenant defendant no. 1-company through its Director, defendant no. 2 and also against defendant no. 3 and its partner defendant no. 4 who are sub-tenant with regard to a portion of the suit property. The present suit has been filed on the basis that the plaintiff vide notice dated 12th March, 2009 had determined the tenancy of the defendant No.1 and furthermore, that the rent receivable from the suit premises has increased to more than Rs.3,500/- thus the defendants are not entitled to protection under Delhi Rent Control Act, 1958 (hereinafter referred to as ‘Act, 1958’).
3. The plaintiff’s case is that it is the landlord and owner of the suit premises admeasuring 8849.33 sq. ft. It is stated that the defendant was inducted as a tenant vide agreement dated 1st March, 1937 followed by subsequent agreements dated 25th August, 1943 and 31st July, 1946 with regard to major portion of the suit premises and Agreement dated 1st April, 1967 with respect to additionally built up mezzanine floor. It is stated that the plaintiff vide notice dated 13th June, 2007 had increased the rent and then vide subsequent notice dated 12th March, 2009 terminated the tenancy. It is also stated that in spite of the service of the notices the defendant has neither paid the increased rent nor vacated the premises. Hence the present suit.
4. Mr. Sandeep Sethi, learned senior counsel for the plaintiff contended that the defendant no. 1 in its written statement has admitted itself to be a tenant in the suit premises and has also admitted receipt of both the notices dated 13th June, 2007 and 12th March, 2009 whereby the plaintiff had increased the rent and terminated the tenancy respectively. He pointed out that defendant nos. 3 and 4 in their written statement have admitted that they are the sub-tenants at a monthly rental of Rs.345/-.
5. Mr. Sethi submitted that the defence taken by the defendant No.1 in its reply dated 27th March, 2009 to the termination notice that increase of rent of seventy eight percent by single notice is misplaced. According to him, Section 6A of Act, 1958 gives a statutory right to a landlord to exercise the option of increasing rent by ten percent and once the option is exercised the tenant has no right to object to it. Mr. Sethi submitted that Section 6A permits the landlord to increase the rent by a single notice for all the preceding intervals of three years, i.e., after 10, 15 or 18 years. Therefore, this right can be exercised by landlord after any number of years from the date when the rent was first fixed.
6. Mr. Sethi submitted that with the subsequent insertion of Section 6A in the Act, 1958, the requirement of a notice as stipulated under Section 8 of the Act, 1958 was done away with. He pointed out that Section 6A starts with a non-obstante clause.
7. Mr. Sethi contended that it is an admitted position that the defendant was paying Rs.1802.37 per month as rent and the plaintiff had vide notice dated 13th June, 2007 increased the rent by ten percent every three year from 1988 onwards. He submitted that ten percent enhancement from 1988 onwards after every three years, comes to a total of six such enhancements till 2006, thereby making the rent payable by defendant No.1 to Rs.3,193/-. Mr. Sethi submitted that adding Rs.345/- per month paid by defendant no. 3 to this increased rent of Rs.3,193/- makes the total monthly rent fetched from the suit premises to Rs.3,538/-, thereby taking the premises out of the purview of the Act, 1958. He relied upon a judgment of Division Bench of this Court in Atma Ram Properties Pvt. Ltd. vs. P.S. Jain & Co. wherein it has been held that once the rent of the premises
