DELHI RENT CONTROL ACT, 1958

Most of the persons living in urban areas are somehow directly or indirectly affected
by the law of rent control which is provincial in nature and it differs from State to
State, The law which was applicable to Delhi was Delhi and Ajmer Rent Control Act,
1952 (38 of 1952). During the course of its applicability many difficulties were being
faced and it was considered necessary to enact a comprehensive law for Delhi. In
order to achieve this objective the Delhi Rent Control Bill was introduced in the
Parliament.

Act 59 of 1958

The Delhi Rent Control Bill having been passed by both the Houses of Parliament
received the assent of the President on 31st December, 1958. It came into force on 9th
February, 1959 as THE DELHI RENT CONTROL ACT, 1958 (59 of 1958).

List of Amending Acts

1. The Repealing and Amending Act, 1960 (58 of 1960).

2. The Delhi Rent Control (Amendment) Act, 1963 (4 of 1963).

3. The Delhi Rent Control (Amendment) Act, 1976 (18 of 1976).

4. The Delhi Rent Control (Amendment) Act, 1984 (37 of 1984).

5. The Delhi Rent Control (Amendment) Act, 1988 (57 of 1988)

The leasing of houses is administered by the Rent Control Act, with every state having its own
form of the law. The prime objectives of the act and how it protects landlords and tenants’
interests will be considered. When a landlord rents out his home on rent, or when a tenant
employs a rental home, such actions fall under the extent of the Rent Control Act. Every state
has its own Rent Control Act.

In the year 2013, the then Union Urban Development Minister Kamal Nath began the Delhi Fare
(Refinance) Bill, 2013, rather Delhi Rent Bill, 1995. This act was not mentioned even though
attempts were made to cancel it. Briefly, in 1997, the bill was introduced in this Act, which was
intended to produce severe rules for the rental market. However, due to the dismissal of the 11th
Lok Sabha, these modifications could not be combined. The Bill of 2013 is still pending in the
Rajya Sabha. This means that the old rules of the Delhi Rent Control Act, 1958 are still
appropriate to the capital. In illustration of this, the existing government produced a draft model
ownership act 2015. But in the rules, legal support is necessitated, and by then it rests only model
policy. For this reason, the rules of 1958 are in survival so far.

Here are the requirements in this old law, which however continues in a large portion of
Delhi:

 In the lack of a written agreement under this Act, the resident can rent up to 15th of every
month and in return, the signed receipt can also be queried.

 In order to the value of money, the main focus of this act is on the term “standard”. On the
other side, due to this law, good rent was not available in the individual commercial premises of
central areas of Delhi.

 Under this law, if the tenant is paying rent monthly, the landlord should not take him out of the
house.
 Due to the requirements of this law, the tenants who make a trivial payment in the name of the
landlord in Delhi cannot get them out of the house.

 This law gives the government the right to command the rent and uprooting, hotel. The areas
included in this law holds the municipal corporation of the city, the limits of the New Delhi
municipal committee.

Under this law, it is legal to obtain a landlord’s property by a tenant. It is also hard for the
landlords to support voice against its terms and conditions

The Delhi Rent Control Bill was been passed by both the Houses of Parliament and
received the assent of the President on 31st December, 1958. It came into force on 9th
February, 1959 as The Delhi Rent Control Act, 1958. It extends to the areas included
within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board
and to such urban areas within the limits of the Municipal Corporation of Delhi. The
courts are under a legal compulsion to harmoniously read the provisions of the Act so as to
balance the rights of the landlord and the obligations of the tenant toward each other.
Rent Control measures become necessary when demand for rental property far outstrips
the supply and tenants become vulnerable to exploitation by the landlords. These Rent
Control Acts (RCAs), including The Delhi Rent Control Act 1958, are meant to fulfill two
main purposes: protect the tenant from having to pay more than a standard rent, and to
protect the tenant from arbitrary eviction.

Landlord’s Perspective

The Delhi Rent Control Act 1958 is largely considered tenant-friendly and hasn’t helped
the cause of landlords. The low rates of return have turned renting almost into a welfare
activity for the landlord and act as disincentives to repair and maintain the property, often
resulting in building collapse. The quality of housing, therefore, takes a severe beating.
Prospective landlords are deterred from entering the rental market, preventing the supply
of new stock.

Restricting revision of rent

According to Section 6A of the Act, the standard rent, or, where no standard rent is fixed
under the provisions of this Act in respect of any premises, the rent agreed upon between
the landlord and the tenant, may be increased by ten per cent every three years. The 1958
Act has no mechanism to bring the historical rent to the present market rate and gives a
tenant the luxury to pay less than Rs 3,500 per month in perpetuity. The law clearly states
that all those paying less than this amount will be protected. An amendment in 1988,
though, allowed landlords to increase rent by 10 per cent every three years. In effect, a
tenant who was paying Rs 10 as rent in 1988 would hit the Rs 3,500 ceiling after 184 years.
Even somebody paying Rs 1,000 in 1988 would cross the mark in 2027.

In case the landlord has incurred any expenditure for any improvement, addition or
structural alteration in the premises, not being expenditure on decoration or tenantable
repairs necessary or usual for such premises, and the cost of the improvement, addition or
alteration has not been taken into account in determining the rent of the premises, he may
lawfully increase the standard rent per year

Difficulty in evicting tenant

Another defect of the regime is the mismatch between a tenant’s ability to pay rent and the
type of accommodation available. Rent control measures involve substantial administrative
costs due to the elaborate mechanism involved in implementing the Act. Tenants are
emboldened by the law to resort to subletting and making modifications in the buildings
without the consent of the owner.

High cost of maintaining property

Under the controlled regime, rents continue to remain at a low level whereas the cost of
maintenance continues to increase. The situation is more severe in case of old tenancies
where the rents have been frozen at historical low levels. It is in case of these old properties
that the need for maintenance is higher. The older housing stock thus faces premature
decay and degradation as the landlord finds it difficult to maintain it.

Eviction from Commercial Premises Permitted

The Delhi Rent Control Act, 1958 restricted eviction of tenants from commercial premises
mainly because of the limited commercial space available in the city at that time. But that was a
long time back. Now the scenario has undergone a sea change and a fairly large number of
buildings and premises were now available on rent for non-residential and commercial purposes.

Reversing a full Bench judgment of the Delhi High Court which had refused to alter the law in
favour of the landlords on the ground that it had been in force for more than 45 years, the
Supreme Court had said the HC failed to see that the provision in the 1958 Act has outlived its
utility. Removing this anomaly and striking down the differential approach in law, a Supreme
Court bench comprising Justices B N Agrawal and G S Singhvi said landlords could now seek
eviction of tenants from residential as well as commercial premises on the ground of proven
personal need.

Tenants Perspective
Several RCAs are products of the World War, which necessitated strict rent control for housing
soldiers in available accommodation. The Delhi Rent Control Act 1958 was also meant to protect
tenants’ interests and although it has served them well, the law became a tool to harass landlords
over the next four decades.

Students exploited by landlords

While most agree that the 1958 law favours tenants, one section of the tenant community pleads
that the defunct state of the law allows landlords to exploit them.

This section is that of outstation students studying at colleges in Delhi. These students, miles
away from home, are the most defenceless lot of tenants and do not possess any choice but to
heed to the demands of their landlords.

Protection against eviction

A tenant cannot be arbitrarily asked by a landlord to vacate his premises. Only non-payment of
rent or discreet subletting are the two technical defaults committed by a tenant that allowed a
landlord to take back his property. Heirs of statutory tenant are entitled to same protection
against eviction as affordable to tenant under the Delhi Rent Control Act.

However, eviction can now be sought on need and bonafide need and can be claimed not just for
the owner of the property but also for his or her dependent family.

Tenants also claim that landlords, desperate to get their property vacated, resort to illegal means
such as paying reverse ‘pugree’ (an interest free security deposit) to them to induce them to
vacate, or seek the help of organised gangs, or the local police for forceful eviction.

Conclusion

One of the biggest negative fallouts of The Delhi Rent Control Act has been that it has led to
stagnation of revenue from property taxes since the base of property tax is standard rent which
has been frozen .This has led to emergence of practices like key money. Thus, apart from
creating a black market in rental housing, the Act has reduced the accessibility of low income
groups to rental housing, as they cannot afford to pay large deposits to rented premises.

The widening divergence between the interests of landlords and tenants has not only led to
increased litigation under the Act. A large number of criminal cases have their origin in disputes
over rented properties.

The 1995 act would have replaced the archaic law of 1958 that protected the migrant population
from arbitrary rent hikes by wealthy landlords. Even as property values skyrocketed, landlords
bound by rent control rules continued to get paltry rents. The 1995 act was passed by both houses
of Parliament and received Presidential assent, but after street protests by tenants the government
lost the will to notify it.