Court Affirms Claims for Utility Charges and Repairs in Landlord-Tenant Dispute
In a significant judgment delivered on January 31, 2026, the Delhi High Court upheld the enforceability of rent escalation clauses in unregistered lease deeds, reinforcing the rights of landlords in cases where tenancy extends beyond the stipulated period. The bench comprising Justices Anil Kshetarpal and Amit Mahajan dismissed the appeal filed by M/S Ritas Heritage against Sangita Gupta, affirming the Commercial Court's decision to award Rs. 3,90,163 to the respondents along with 6% interest per annum.
The dispute stemmed from an unregistered lease agreement dated July 12, 2017, where the appellants occupied the second and third floors of a property in Karol Bagh, New Delhi, at a monthly rent of Rs. 2,14,935. The agreement included a clause for rent escalation after one year, increasing the rent by 20%. Despite the appellants vacating the premises post the enhanced rent period, the court determined that the escalation clause was enforceable.
The appellants contested the Commercial Court's decision, arguing that the lack of registration rendered the rent escalation unenforceable. However, the High Court cited the Supreme Court's precedent in Siri Chand v. Surinder Singh, emphasizing that non-registration does not affect the enforceability of escalation clauses if the tenancy continues beyond one year.
Furthermore, the court validated the respondents' claims for electricity and water charges, supported by documentary evidence, and dismissed the appellants' arguments due to a lack of rebuttal evidence. The claims were meticulously scrutinized to exclude periods not covered by the appellants' occupation.
The judgment also addressed the respondents' expenses towards repairs and renovation, affirming the trial court's reasonable deductions for normal wear and tear. The appellants' appeal was dismissed as the High Court found no perversity or illegality in the trial court's judgment.
This judgment reinforces the legal understanding that escalation clauses in lease agreements are enforceable irrespective of registration, provided the tenancy continues beyond the agreed period. It also highlights the importance of documentary evidence in substantiating claims related to utility charges and property repairs.
Bottom Line:
Landlord-tenant dispute - Enhanced rent clause in unregistered lease deed is enforceable if tenancy continues beyond the stipulated period, and rent escalation is not contingent upon lease registration.
Statutory provision(s): Commercial Courts Act, 2015 Section 13; Registration Act, 1908 Section 17(1)(d); Evidence Act, 1872 Section 101
M/S Ritas Heritage v. Sangita Gupta, (Delhi)(DB) : Law Finder Doc id # 2846114
