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All over the world, several experiments have been done with rent deregulation.

Some of them were successful, while others were not. Thus, the theoretical consensus on the harms of rent control hasnt translated into uniform and universal success of deregulation measures. There are other factors too like urban infrastructure, rural-urban migration, regulation of land use and size of land holdings, etc., which go a long way in determining the structure of rental housing markets anywhere in the world. Salient Features of the Maharashtra Rent Act, 1999 By Bharat Gupta, Advocate The Maharashtra Rent Control Bill, 1999 (L.C.Bill No.VI of 1993) passed with amendments by both the Legislative Council and the Legislative Assembly aims to unify the three different Rent Control Laws, in operation in the State of Maharashtra. The Bill has brought about several changes in the existing Bombay Rent Control Act which expires on 31-3-2000. The new Act called the Maharashtra Rent Control Act, 1999 extends to the whole of the State of Maharashtra and shall come into force on the date notified by the State Government in the Official Gazette. Exemptions (Sec.3): The Act shall not apply to : - any premises belonging to the Government or a local authority or against the Government but shall apply in respect of premises let out to the Government or a local authority; any premises let or sub-let to banks, Public Sector, Undertakings (PSU), foreign missions, international agencies, multinational companies, private and public limited companies having paid-up share capital of Rs. 1 crore or more. - Any premises let or sub-let to banks, Public Sector Undertakings (PSU), foreign missions, international agencies, multinational companies, private and public limited companies having paidup share capital of Rs. 1 crore or more. - The State Government may direct that all or any of the provisions of the Act shall, subject to such conditions and terms as it may specify, not apply to premises held by religious or charitable institutions administered by a local authority and to premises held by an universityprovided the tenancy rights of the existing tenants in such premises are not adversely affected. Act does not apply to the premises, which are let or given on license for less than 12 months. Definations (Sec.7): Standard Rent means standard rent fixed by the Court plus an increase of 5%; or the rent at which the premises were first let on or after 1-10-1987. Tenant includes deemed tenant, sub-tenant, heir, legal representative, assignee. Transmission of tenancy shall not be restricted to the death of the original tenant, but shall apply even on the death of any subsequent tenant Rent in excess of Standard Rent illegal; any contravention punishable with imprisonment upto 3 months or fine upto Rs. 5000/- or with both. Increase in rent (Sec. 11) : 4% p.a. from the date of the commencement of the Act; 15% p.a. for improvements and alterations other than tenantable repairs which the landlord is required to carry out, provided 70% pf the tenants consent in writing; 25% p.a. for special or structural repairs, exclusive of any repairs, exclusive of any repairs carried out under the MHADA Act ; Due to any increase in taxes; to the extent of increase. Recovery of Possession : No eviction suit can be filed on the ground of arrears until the expiration of 90 days next after notice of demand served upon the tenant. No decree for evicton shall be passed in an eviction suit on the ground of arrears, if the tenants pays

upwithin 90 days from the date of service of the summons of the suit the arrears of rent with 15% interest and continues to pay the standard rent and permitted increases till the suit is finally decided and also pays the costs of the suit. Landlord entitled to recover possession from licensee : On expiry of license; in default can apply to the Competent Authority. Such licensee liable to pay damages at double the rate of the license fee an arrangement of license in writing shall be consclusive evidence of the fact stated therein. Time Limit for disposal of suits/appeals : For suits : 12 months from the date of service of summons For appeals : 6 months Pending Suits : Pending suits and proceedings not to be affected by the new Act and to be heard and disposed of as if the new Act had not been passed. Offences (Sec.53) - Charging rent in excess non cognizable imprisonment 3 months fine 5000/- or both (Sec.10); - Failure to commence the work of repairs after the tenant has vacated by the date specified in the decree or fails to comply with the Courts Order of repossesion after repairs cognizable imprisonment 3 months fine 1000/- or both (Sec.17); - Failure to occupy the premises recovered on the ground of bonafide requirement cognizable imprisonment 3 months fine 5000/- or both (Sec.18) : - Failure to carry out any undertaking given to Court or failure to comply with Courts Order under a decree obtained on the ground of bonafide requirement by the landlord for the demolishing the premises for the immediate purpose of erecting new building cognizable imprisonment 30 days fine 5000/- or both (Sec.19); - Failure to intimate to tenant the date on which the erection of the erection of the new building shall be completed cognizable imprisonment 3 months / fine 5000/- or both (Sec. 21); - To cut-off withhold essential supply or service upto Rs. 100/- for each day during which the default continues (Sec.29); - Failure to restore any essential supply or service imprisonment 3 months, fine 1000/- or both (Sec.29); - Conversion of residential into commercial premises by landlord imprisonment 6 mts fine 10000/- or both (Sec.30); - Failure to issue the rent receipt fine 100/- for each day of default (Sec.31); - Failure to enter into a written agreement of tenancy or leave & license or have the same registered imprisonment 3 months fine 5000/- or both (Sec.55). Tenancy agreement to be compulsorily registered (Sec.55) : - agreement of tenancy or agreement of leave & license to be in writing and shall be registered responsibility of getting such agreement registered shall be on the landlord and in the absence of the written registered agreement, the contention of the tenant about the terms and conditions on which the premises were given shall prevail, unless proved otherwise. Stamp duty on Tenancy Agreement (Art. 5 of Stamp Act) - for non-residential premises = 1000/- per sq.metre; - for residential premises = 100/- per sq.metre. (in Mumbai). Right of Tenant & Landlord to received lawful charges (Sec.56) (i.e.PUGDI) : - It is lawful for the tenant to receive any pugdi as a condition of relinquishment, transfer, assignment of his tenancy; - It is lawful for the landlord to receive any pugdi for grant or renewal of a tenancy or for giving his consent to transfer the tenancy to any other person. Under Section 55, all tenancy agreements, including leave and licence agreements, must be in writing and are to be compulsorily registered after the commencement of the Act. It will be the responsibility of the landlord to get such written agreements registered. If he fails to get the

agreements registered, the contention of the tenant about its terms and condition shall prevail, unless proved otherwise. Further, if the landlord fails to register the agreement, he shall be punished with imprisonment which may extend to three months or with fine upto five thousand rupees or with both, under Sub-Section (3) of the said Section 55.

A Rent Act under review


The Maharashtra Government is in a bind over the Bombay Rent Act. R. PADMANABHAN in Mumbai THE controversy over the Bombay Rents, Hotel and Lodging House Rates Control Act 1947, popularly known as the Bombay Rent Act, has landed the Shiv Sena-Bharatiya Janata Party Government in Maharashtra in an unenviable situation. The Supreme Court, while delivering its judgment on December 19, 1997 on appeals filed by several property owners in Mumbai, said that the existing provisions of the Act that related to the determining and fixing of the "standard rent" (the highest rent the Act permits a landlord to charge) was "no longer reasonable". The court also said that the extension of these provisions beyond March 31, 1998 (the last day of the previous extension) would be "invalid" and "of no consequence". The apex court expressed the hope that the State legislature would enact a new rent control Act with effect from April 1, 1998 taking into consideration, among other things, the model rent control legislation the Union Government circulated among the States in 1992. The Bench, comprising Justice J.S. Verma (the then Chief Justice) and Justices B.N. Kirpal and N. Srinivasan, said that there would have to be "very good and compelling reasons" for the Government to depart from the model law. It noted that counsel for the State Government had given it an assurance that the provisions of the model law would be taken into account while framing the new Act. Since then, the State Government has come under criticism from tenants' lobbies. The Shiv SenaBJP Government has been accused of having defended the Bombay Rent Act only half-heartedly in the court in order to facilitate the introduction of a piece of "pro-landlord" legislation. The model law, besides providing for much higher rents than what is payable under the Bombay Rent Act, makes the eviction of tenants easier by providing for the setting up of a parallel judicial process with only one court of appeal after removing the civil courts' jurisdiction over the matter and summary litigation procedure. It also provides for severe curbs on the right of inheritance of tenancies.
VIVEK BENDRE

Traders protesting against the Rent Control Act in Mumbai. During the Lok Sabha election campaign, the Congress(I) made the question of the Rent Act an electoral issue, particularly in the Mumbai South constituency, in an attempt to woo the tenants' lobbies. For their part, Chief Minister Manohar Joshi and Shiv Sena chief Bal Thackeray gave the tenants assurances that were plainly untenable in the light of the Supreme Court judgment. On March 16, the Action Committee for Protection of Tenants' Rights, a powerful group consisting of tenants' and traders' associations and central trade unions, including the Centre of Indian Trade Unions (CITU), observed a bandh in Mumbai. On January 19, the State Government filed a petition in the Supreme Court pleading for a review of

the December 19 judgment. The petition stated that the March 31, 1998 deadline set by the Supreme Court for the enactment of a new law was "too close" and prayed for the grant of "adequate time". Review petitions and intervention petitions have been filed by the Federation of Old Buildings Cooperative Housing Societies, the Action Committee for Protection of Tenants' Rights and other organisations. After hearing the matter on March 19 and 24, the Supreme Court declined to pass orders on the Government's request for permission to continue with the existing Rent Act beyond March 31. The Bench, comprising Chief Justice M.M. Punchhi and Justices Kirpal and Srinivasan, made it clear that the court would keep the Government's review petition pending until April 17, the date of the next hearing. This forced the Government to bring new legislation into effect by the end of March lest there be a legal vacuum on the rent question between April 1 and 17, if not beyond that date. The Government has therefore taken recourse to a temporary legislative measure that was passed by the State Assembly on March 26 pending the enactment of a unified rent control law applicable to all the regions of Maharashtra. (The Bombay Rent Act is applicable only to specified areas in those parts of Maharashtra that correspond to the Bombay State prior to its reorganisation; there are different rent control Acts for Vidarbha and Marathwada.) The new legislation, which expires on March 31, 1999, differs in only one aspect from the existing Act. It has an additional section that reads as follows: "On the date of the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Extension of Duration and Amendment) Act, 1998, a landlord shall be entitled to make an increase of five per cent in the rent of premises let before the first day of October 1987." However, whether the Supreme Court finds the temporary legislation acceptable or not remains to be seen. WHAT is the "standard rent", which is at the centre of the controversy? Except in cases where it has been fixed under the rent control Acts of 1939 and 1944, and in special cases by the court under the 1947 Act, standard rent indicates the rent at which the premises were let on September 1, 1940. Where they were not let on that date, it means the rent at which they were last let before that date; where they were first let after that date, it means the rent at which they were first let. The Bombay Rent Act, which applies only to private premises, provides that rent in excess of the standard rent is illegal except where an agreement entered into before September 1, 1940 provides for periodic increases. However, it does permit rent increases subject to certain conditions in the case of premises that receive the benefit of improvements or special additions, and premises that are subjected to special or heavy repairs. With effect from 1987, a landlord has been permitted, subject to certain conditions, to increase the rent on premises in respect of which he or she is required to pay the government, a local authority or a statutory authority any fresh levies (or increase in existing levies) such as "rates, cess, charges, tax, land assessment and ground rent of land." An amendment to the Act in 1987 provides for an exception to the rule of standard rent. Broadly speaking, this means that the provisions relating to the standard rent and permitted increases do not apply for five years to any premises, the construction or reconstruction of which was completed on or after October 1, 1987. On the expiry of the five-year period, the standard rent applicable to the premises would be an amount equivalent to a "net return of 15 per cent on the investment in the land and building and all outgoings in respect of such premises." The life of the Bombay Rent Act has been extended around 20 times. In its December 19 judgment, the Supreme Court observed that a perusal of extracts from documents placed on record by the appellants, including reports of several committees and resolutions adopted at the All India Housing Ministers' Conference in 1987 and the Chief Ministers' Conference in 1992, "clearly demonstrates that the pegging down of rents to the pre-War stage and even thereafter is no longer reasonable." The reports referred to by the Supreme Court included those made by the Rent Act Inquiry Committee (1977), the Maharashtra State Law Commission (1979) and the Economic Administrative Reforms (L.K. Jha) Committee (1982).

Some of the points made by the reports and the resolutions were: * The freezing of rents had deprived property owners of a reasonable return on their properties commensurate with the increase in the cost of living and the cost of building materials. Small property owners who had invested their lifetime savings in houses, partly for earning an income through rents, were hit particularly hard. According to one estimate, in the 1970s, 75 per cent of the landlords were people who were dependent on rent from their properties for their livelihood. * If rents had not been frozen, new buildings would have been constructed and the proliferation of slums could have been contained in cities such as Mumbai. * Old and frozen rents bear little relation to present-day maintenance costs, the current returns from alternative forms of investment or the prevailing market rents in respect of new accommodation. * In cases where rents had remained frozen for five years or more, half the inflation that had taken place since the time of their initial determination should be neutralised. * The rent control laws had led to the neglect of repairs and maintenance and had virtually frozen the municipal bodies' income from property taxes, which are based on rateable values, which in turn are a function of the prevailing rents. * The freezing of rents has led to the emergence of practices such as 'key money' (payment of large deposits) that make rented housing less accessible to those who are less privileged. The Supreme Court judgment cited the hypothetical case, presented by counsel for the appellants, of a landlord who was getting a rent of Rs. 1,200 a year, exclusive of municipal taxes, on September 1, 1940. According to the counsel's calculations, this landlord would receive only Rs. 800 a year in 1996 or 1997 and, as the value of the rupee in 1996 or 1997 was only 1/66th of what it was in 1940, in real terms the annual accrual to the landlord would have fallen from Rs. 1,200 to Rs. 12.12. The judgment also cited the case of Ram Mahal, a building with 20 residential flats, in Mumbai. The building was bought by one of the appellants in 1955. "According to the appellant... the (present) total gross rent of the building which he receives is Rs. 1,72,032 per annum, while it incurs an annual expenditure of Rs. 1,92,235, consisting of BMC (Brihanmumbai Municipal Corporation) taxes, repairs, ground rent, maintenance charges... and the insurance premium. He is... suffering a loss of Rs. 21,213 every year." The Supreme Court cited another hypothetical case to make the point that "tenants are, by and large, getting an unwarranted benefit." An assistant of the Union Government posted in Mumbai in 1948 would have received monthly emoluments totalling Rs. 485.50; the same person would be drawing Rs. 11,900 a month in 1997 after the implementation of the Fifth Pay Commission. If it is assumed that the rent he was paying in 1948 was Rs. 100 a month exclusive of repairs, he would be paying Rs. 170 a month in 1997. In other words, his liability on account of rent, reckoned as a proportion of his emoluments, would have fallen from about 20 per cent to 0.9 per cent over these 49 years. However, the judgment also took note of the fact that landlords who were receiving "unreasonably low" rents took recourse to methods that were "slowly giving rise to a state of lawlessness" and expressed concern over the possibility of this "extra-judicial backlash" gathering momentum. Unfortunately, the tenants' case appears to have been poorly presented before the court. The State Government was represented by only one advocate at the hearing of the appeals. According to an intervention petition filed by the Action Committee for the Protection of Tenants' Rights, the State Government "did not think it fit to brief the Attorney-General, the Advocate-General or the Solicitor-General (all of whom hail from Mumbai and are personally aware of the situation prevailing in Mumbai) to plead its case." The Shiv Sena-BJP Government appears to have realised now that it would be politically costly to ignore the interests of the tenants. The statement of objects and reasons annexed to the Rent Control Bill that was introduced in the State Assembly on March 26, 1997 and received the President's

assent on March 31, 1997 seems to bear this out. It says: "The conditions requiring control of rents and protection from eviction of all protected tenancies continue to exist." The significance of this assertion can be gleaned from an extract from the statement of objects and reasons annexed to the 1947 Bombay Rent Bill: "The latter Act (the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944)... was intended to check an inflationary rise in rents... in areas in which, owing to war conditions, there was an acute scarcity of accommodation... The conditions which led to the enactment of these measures continue... and it is, therefore, essential that effective control should be continued until sufficient progress has been made with building operations to provide adequate and suitable accommodation for the largely increased population of the areas..." Mumbai's population rose from 29,94,444 in 1951 to 99,25,891 in 1991. Given a population increase of this magnitude and the fact that the availability of land in Mumbai for housing purposes is severely limited by virtue of it being an island, it is difficult to envisage the population of the metropolis being "adequately and suitably" accommodated in the foreseeable future. The 1998 statement of objects and reasons says: "It is imperative that... rent control and protection against eviction must continue in a just and fair manner, otherwise there will be enormous social unrest, social strife and disruption... The escalations of rent as structured in the Model Rent Control Legislation cannot be regarded as a fair and just solution to the problem of acute scarcity of accommodation, especially in cities such as Mumbai, Pune... "The effect of these escalations would increase the burden on protected tenants/occupants... the rent itself would become more than 22 times... if the present burden of property and other taxes, which is on the tenants, is taken into account, the burden... would increase manifold. "Adopting the rates and structure for escalation together with a rate of return of even 6 per cent would result in an overwhelming body of protected tenants/occupants being unable to meet the increased burden...." The model rent control legislation provides for fixing the standard rent on the basis of a certain percentage return on the total cost - the market value of land when construction began plus the cost of construction and the cost of any renovations or major repairs that may have been undertaken.
PAUL NORONHA

A crumbling tenement in Mumbai. To arrive at the standard rent for any given year, the rent so calculated is to be increased by a certain specified percentage - 4 per cent between 1950 and 1960, 6 per cent between 1960 and 1970 and 8 per cent from 1970 onwards being suggested for Delhi. Charges relating to maintenance, amenities and taxes payable are to be added on a pro rata basis. The neutralisation of inflation to the extent of between 25 and 100 per cent over a period of up to seven years is also envisaged. This would call for a phased increase of the standard rent. The model law would exempt from rent control all tenancies where the lease extends beyond 20 years and premises carrying more than such monthly rental value (ranging from Rs. 1,500 to Rs. 3,500) as may be specified by a given State. It provides for exemption for 15 years for newly constructed or reconstructed premises and all premises that have been lying untenanted for seven years or more. The premise that the income earned by Mumbai's landlords from their property has been decreasing as a result of rent control needs to be examined more closely. The pugree system, under which a landlord receives an illicit lump sum payment (which is related to the market value of his premises) every time there is a transfer of tenancy, is prevalent in Mumbai. Besides, landlords have made enormous gains by creating additional floor space and converting residential premises into

commercial ones, authorised or otherwise, and the sale of development rights. The intervention application filed by the Action Committee for the Protection of Tenants' Rights notes that most of the land in the island city (corresponding roughly to the southern two-fifths of Mumbai) is leasehold, the lessors being the State Government, the Brihanmum-bai Mumbai Corporation, the Mumbai Port Trust and other state agencies. The lease rents paid by landlords have increased only marginally, if at all. Property values in the island city appreciate because of the value of land, and this is not the case with old buildings "whose economic life is virtually over," the application says. As regards the case of Ram Mahal that was cited by the appellants to prove that landlords were getting a raw deal under the rent control regime, the application filed by the Action Committee has an interesting story to tell. According to the application, the present landlord bought the building for Rs. 5 lakhs in 1955; between 1970 and 1998 he permitted ten transfers of premises. "It may fairly be assumed that pugree was received by the landlord," the application states. Also, the landlord has converted two ground-floor flats into commercial premises; one is occupied by a restaurant and the other has been given on tenancy to a relative of the landlord, who has in turn sub-let it to a bank. "Under these circumstances," the application states, "it may be fair to assume that the landlord... has recovered over Rs. 5 crores on the investment of Rs. 5 lakhs." Maharashtra Rent Control Act, 1999: Salient Features: The new act that is the Maharashtra Rent Control Act, 1999 has in the preamble said what changes it is going to make. It says, the act is to unify, consolidate and amend the law relating to the control of rent and repairs of certain premises and of eviction and for encouraging the construction of new houses by assuring a fair return on the investment by landlords and to provide for the matters connected with the purposes aforesaid. The salient features of the new act of 1999 are :1) Consolidation of the three acts as mentioned above but omitting the application of the act relating to the control of rates of hotels and lodging houses. 2) Withdrawing the application of the act from the companies (S.3. (1) (b)). The new rent control act of 1999 has withdrawn the application of the act from the banks, public sector undertakings, or any corporation established by or under any central or state act, or foreign missions, or international agencies, multinational companies and limited companies having a paid up share capital of more than rupees one crore. This suggestion was given by me in my article in a daily in 1978 and repeated by me in the second edition of my book Lease and Licence Distinguished thus: What a fall! . The amendment of 1973 converted certain licenses into leases into leases and offered a morsel to the needy and struggling persons. The companies and other like groups snatched it away and gulped it. It is really sad to see a company paying high salaries to its directors and officers along with all the conceivable perquisites, rich dividend to its share holders and with its capability to spend away the funds on any obscure heads while at the same time claiming the protection of the rent acts. . Now what is the way out? A company takes premises on lease for a fixed period and then refuses to vacate it on expiry of the stipulated period taking a stand that the lease is protected under the rent act or that the premises given on leave and licence comes within the protection of the amendment of 1973. How is the company to be compelled to restore the socio-economic balance achieved by the tradition of company lease? An ideal solution is a suitable legislation to specifically exclude the companies incorporated under the companies act, foreigners, foreign governments, their consulates and trade representations, the central and state governments in India and such like from the protection of the rent acts. However the new act while withdrawing protection from the companies has not withdrawn the protection from the premises let to the government or to local authority or taken on behalf of the government who have enjoyed the protection of the rent acts from the very beginning and continue to enjoy the said privilege. The picture has changed now. The government is no more a government

with only policing duties. It has taken to wings to fly into the far away skies of economic adventurism with the avowed adoption of socialistic pattern of society as a form of governance. It has lot of money to squander away. Then why should they not pay the rent according to market forces or acquire new premises on prevailing market rate? The new act ought to have withdrawn the protection from the government also. The discrimination against the companies is unconstitutional in so far as the government falls in the same class as the companies and there are no intelligible differentia that can separate the companies from the government in regard to the objective to be achieved by the enactment withdrawing the protection of the rent act from the companies and not from the government. 3) Withdrawing the application of provisions of standardization of rent from the premises, whether old or newly constructed, which have not been let or given on licence for a continuous period of one year (S.6) By amendment to section 4 of the Bombay Rent Act (inserting sub-section 1A after Section 4) in 1987 the provisions relating to standardization of rent were withdrawn for a period of five years to buildings constructed after the 1st October 1987 so that the landlord could recover a larger part of his investment in that period according to the rules of demand and supply. Similar provisions had been enacted in other states long ago. The new act of 1999 carried the concept further. The provisions relating to standard rent have been withdrawn from the premises given on tenancy or license in buildings whether old or newly constructed where they have not been let or given on licence for a continuous period of one year. It would have been abreast of the times if the tenancies created after the commandment of the act had been exempted altogether from the operation of the act that is not only from the provisions of the standardization of rent but also from the protection of tenure under the Act. 4) After having given maximum rights to tenants the legislature began to zealously secure to landlords payment of rent under the English acts as well as under the earlier acts in India. It scripted a draconian provision that if a tenant remained in arrears of rent for more than six months and if he failed to pay them within one month next after the month in which he received the notice, the tenancy stood forfeited and on suit being filed the court had no choice but to pass the decree of eviction. The maxim ignorance of law is no excuse which was treated by law books as archaic and quoted by judges with a wink to confuse junior lawyers was applied here without showing remorse. The hapless tenants came to be evicted in droves. Even the Supreme Court raised its hands in reading discretion to have been invested in judges to avert the consequence of forfeiture. Finally in 1987 the legislature woke up in the cries of tenants and watered down the stringent law. The forfeiture was not to take effect if the defaulter deposited in court the arrears of rent with simple interest at the rate of nine per cent per annum on the first day of the hearing of the suit and complied with other conditions including the payment of the cost of suit. Such relief was not made available after availing of two such chances. However under the new act of 1999 the relief against forfeiture can be availed of every time the defaulter complies with the simple requirements laid down in section 15(3), which are more or less similar that is if, within a period of ninety days form the date of the service of the summons of the suit, the tenant pays the standard rent and permitted increases then due together with simple interest on the amount of arrears of rent at fifteen per cent per annum and thereafter continues to pay regularly such standard rent and permitted increases till the suit is finally decided and also pays the cost of the suit as directed by the court. The proviso limiting the chances of relief against forfeiture only for two such defaults in the provisions of the old act has been conspicuously omitted here. Thus the payment for the arrears of rent are equated, as it were, with the collection of bill each time for payment of services rendered or goods sold with the compound interest customarily charged on delayed payments, the compound interest here being the cost of the suit. The penalty of simple interest at the rate of fifteen per cent per annum and the cost of the suit which in these days is back breaking is a sufficient deterrence to making default in payment of rent. 5) Under the Act of 1947 the standard rent once fixed could not be increased or decreased. Only the permitted increases could be increased if new areas of collecting social charges were to be

traversed. Now under the new act increase in standard rent is permitted annually at the rate of four per cent (s.6). As the security of tenure, one of the two basic tenets on which all rent control acts were founded, has not been touched, it would have been keeping with the times if the standard rent, which has justifiably not been allowed to be revised retrospectively and which in any case was always a lesser principle and now evaporating in inflationary heat, had been allowed to be increased at the rate of at least ten per cent annually which is the norm in the transactions of letting premises on leave and licence for more than a year and yet considered a pittance by economics of the present day. 6) Registration of the agreement of tenancy as well as leave and licence has to be compulsorily made by landlord or licensor on pain of imprisonment and fine. Tenant or licensee has been allowed in absence of registration of agreement to prove the terms orally (s.55). 7) Payment of premium as consideration for the grant or relinquishment of tenancy which was made illegal in England and India with civil and criminal consequence has been explicitly permitted to encourage dealings in black and white which were hitherto in black only, to generate money for circulation in the market as well as tax for the exchequer. If you call it leave and licence, it is leave and licence: In Delhi and New Delhi the concept of the grant of tenancy for a limited period or the rent act not applying to a tenancy when the rent charged exceeds a certain amount was introduced long ago as a precursor to the laws rationalizing the rent acts. But the amendment of 1987 to the Bombay Rent Act, 1947 inserting section 13A2 was a consummate step in that direction. The classic distinction between the concept of lease which has well-defined ingredients giving a right in immovable property and that of licence which only makes the user lawful without creating a right in immovable property, kept alive by subtle reasoning, called quibbling by judges in private conversation, has been changed by the legislature to sub-serve the interests of the fast changing society. The clear-out lease by mutual agreement can be so arranged as to give it a character of ephemeral licence to occupy an immovable property for a short period of time; only the business premises have been left untouched for the reasons of their easy availability for an asking price and the stakes in the business being so high and engaging that fighting for the gains of lease, which are being diluted from time to time, look chicken-feed. The new act of 1999 has planted the said amendment whole sale in section 24 thereof. 9) Government allottees under the Bombay Land Requisition Act, 1948: The Supreme Court in the case of H.D. Vora (1984) 2 SCC 337, gave an innovative judgement that the continuance of the requisition of premises for more than thirty years which was conceptually temporary in character was a fraud on the power of the government which in effect did the acquisition of the property without paying the market value of the property in the guise of requisition and ordered the government to release the landlords premises from requisition The landlords whose premises remained under requisition for more than thirty years got a manna from heaven and quickly filed the writ petitions in the Bombay High Court for an order directing the government to derequisition their premises. As the Government Pleader on the original side of High Court, Bombay in the mideighties I stood defenceless and alone facing the juggernaut unleashed by the Supreme Court. The High Court allowed the petitions and passed the orders of eviction. The allottees went to the Supreme Court. The cases were referred to the constitutional bench of five judges. The majority by four to one (AIR 1994 SC 2319) by yet another subtle interpretation of law confirmed the judgment given earlier in H.D. Voras case. Justice P.B. Sawant in his minority judgment agreeing with the reasoning of the majority on questions of law however ruled differently on when the allottees should vacate the premises and said that since the landlords with the tenements freed from requisition would get the same standard rent they would not be prejudiced if some more time was given to the allottees to find out suitable place for them. The government by amendment to the Bombay Rent Act, 1947 trying to rescue the allottees redefined their status as deemed tenants. The provision was challenged in Bombay High Court in the case of Ramji Premjibhai Gohil, 1998 (4) MLJ 523 and finally struck down as ultra vires the constitution as beyond the legislative competence. The said provision has

been transplanted as section 27 of the new act of 1999 which on fresh challenge is declared unconstitutional in Subhash Laxmidas Majithia, W.P. No. 1595 decided on 30.4.2001 by Bombay High Court following its earlier decision in Ramjis case. The allottees are now waiting for the verdict of the Supreme Court with their hands raised in prayer.