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Harbans Kaur v. Iqbal Singh and Anr.

Civil Appeal · 2019 INSC 107Decided 29 Jan 2019
Civil Appeal Nos. 12561-12562 of 2017
Justice Ashok Bhushan · Justice K.M. Joseph

Background

The appellant-landlord had let out shop premises in Rajasthan in 1995 at an agreed rent with a 10% annual increase clause, and the tenant paid rent accordingly (reaching Rs. 16,564/month) until mid-2003; when the tenant then stopped paying for several months, the landlord issued a notice demanding the arrears at the existing rate, but the tenant instead unilaterally recalculated the rent downward (to Rs. 13,600/month) by applying the new Rajasthan Rent Control Act, 2001's revision formula from the start of the tenancy, and paid only the lower amount. The Rent Tribunal and Appellate Rent Tribunal ordered the tenant's eviction for default, but the Rajasthan High Court (Single Judge and then Division Bench) ruled in the tenant's favour, holding there was no default.

Decision Breakdown

The Supreme Court held that under Section 4 of the Act, 2001, the rent being paid immediately before the Act commenced remains the "agreed rent" and continues to apply unless and until the landlord affirmatively invokes the statutory revision procedure under Sections 6 and 14: a tenant has no right to unilaterally recompute and reduce the rent on his own initiative using the Act's revision formula. Since the landlord here was only demanding the pre-existing agreed rent (not a fresh 10% increase), and the tenant's self-calculated lower payment fell short of the arrears demanded in the notice, the tenant was in default under Section 9 of the Act, which requires payment of the specific arrears demanded by notice. The Court set aside the High Court's judgment, allowed the landlord's appeals, and restored the Rent Tribunal's eviction order.

Lesson Learnt

A tenant cannot unilaterally recalculate and reduce an already-agreed rent by invoking a later rent-control statute's revision formula on their own: that mechanism must be formally invoked by the landlord, and until then the previously agreed rent stays payable in full.

Official source (sci.gov.in)View Judgment (PDF)

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