Landmark Judgment Clarifies Civil Court's Role Post-Striking Down of Key Provisions in Delhi Rent Control Act
In a significant judgment, the Delhi High Court has affirmed the jurisdiction of civil courts in cases involving the recovery of market rent from tenants. This decision comes as a relief to landlords amidst the statutory vacuum created by the striking down of Sections 4, 6, and 9 of the Delhi Rent Control Act, 1958. The court emphasized that the bar under Section 50 of the Act does not extend to suits for market rent recovery, which falls outside the purview of the Rent Controller.
The case, Atma Ram Builders Pvt Ltd v. Embassy Restaurant, involved a dispute over the recovery of market rent for properties leased decades ago at rates significantly lower than current market values. The plaintiff, Atma Ram Builders Pvt Ltd, sought to recover market rent, contending that the statutory mechanisms for rent fixation under the Delhi Rent Control Act were no longer available after being declared unconstitutional.
The learned Single Judge had initially rejected the plaint under Order VII Rule 11(d) of the Civil Procedure Code, citing a statutory bar under the Delhi Rent Control Act. However, the Division Bench comprising Mr. Anil Kshetarpal and Mr. Harish Vaidyanathan Shankar overturned this decision, reinstating the plaintiff's suit for market rent recovery.
The court clarified that with the absence of statutory provisions for standard rent fixation due to the striking down of Sections 4, 6, and 9, civil courts retain plenary jurisdiction to adjudicate disputes concerning market rent. The judgment also distinguished between the revision of agreed rent under Section 6A and the determination of market rent, the latter being outside the scope of the Rent Controller's powers.
This ruling is expected to have a far-reaching impact on similar disputes, providing clarity and direction to landlords seeking fair rent in the absence of statutory guidelines. The court's decision underscores the necessity of civil court intervention in filling legislative voids to ensure justice and equity in landlord-tenant relationships.
The court directed the restoration of the suit to its original number and scheduled a hearing for January 2026, allowing the case to proceed to trial.
Bottom Line:
Recovery of market rent from tenants is not barred under Section 50 of the Delhi Rent Control Act, 1958, as it does not fall within the jurisdiction of the Rent Controller. Civil courts retain jurisdiction in the absence of statutory mechanisms for fixation of standard rent post the striking down of Sections 4, 6, and 9 of the Act.
Statutory provision(s): Delhi Rent Control Act, 1958 Sections 4, 6, 6A, 9, 15, 50; Civil Procedure Code, 1908 Order VII Rule 11
Atma Ram Builders Pvt Ltd v. Embassy Restaurant, (Delhi)(DB) : Law Finder Doc Id # 2825763
