Wednesday, October 10, 2012

State Rent Control Acts Applicable To Tenants Of Public Sector Undertaking Properties - Rules Supreme Court

This article is written by Sushant Shetty.

(Also see the article on Deemed Conveyance, Analysis of Coastal Regulation Zone Notification 2011 and Key Provisions of The Draft Model Residential Tenancy Act, 2011 )

Public Sector Undertakings (PSU) India
A recent decision of the Supreme Court has held that the Public Premises Act governs only two issues, i.e. eviction of an unauthorized occupant and recovery of rent arrears from the tenants, and that henceforth the tenants would also be governed equally under the Maharashtra Rent Control Act on all other issues of standard rent and essential / basic services / facilities, as the two laws can sit side by side and their provisions are not conflicting.  It held that a guideline issued by the Centre in 2002 seeks to prevent the Act’s misuse besides setting obligations on Public Sector Undertakings (PSU) as Landlords

It appears that this decision of the Supreme Court will greatly assist PSU’s tenants battling steep hike in rents and fighting for proper maintenance of essential / basic services / facilities since they can now invoke provisions of the State Rental Law being Small Causes Court. 

It appears that with this decision, the Supreme Court addressed the question as to whether tenants under the Public Premises Act, a central legislation, could not take recourse to the protective provisions under the state tenancy law, which governs private landlord-tenant relationship. As stated above, the Supreme Court held that the two Laws can sit side by side and their provisions are not conflicting.  It further held that PSU’s like Banks, LIC, BPT, NTC, GIC etc. cannot increase rents arbitrarily or unreasonably.  A tenant who feels a hike is irrationally high can now move the Small Causes Court for fixation of standard rent. Also public premises tenants can now get their premises repaired and maintained by the PSU in Maharashtra by invoking the provisions of the State Rental Laws as Public Premises Act had no provision for seeking restoration of basic facilities.

It should be noted that, the matters which fall within the purview of the Maharashtra Rent Control Act and the Public Premises Act are briefly as follows :

(a)        The Maharashtra Rent Control Act :
(i)         It governs 5 basic issues (a) control of rent (b) repair of certain premises (c) redevelopment of old rundown buildings;
(ii)        It specifically allows for fixation of standard rent and permits yearly increases.
for Rent tag Control India Maharashtra Act red house
(iii)       It prevents landlords from withholding power supply or other essential services and offers a remedy to the tenant if the landlord is in breach of such a duty. 

(b)        Public Premises Act :
(i)         It governs eviction of unauthorized occupants from public premises.
(ii)        It allows recovery of rent arrears from tenants.

(iii)       It provides a separate mechanism for speedy recovery of public premises.

In a gist, the above recited decision of the Supreme Court, giving jurisdiction to the Small  Causes Court to resolve disputes between PSU tenants and PSU Landlords, is a welcome verdict which was so far handed by the estate officers  of the Public Sector Undertaking.

This article is written by Sushant Shetty.

Sushant Shetty Advocate Lawpoint licensed Maharashtra goa
 Sushant Shetty
Sushant Shetty is a young Advocate, licensed to practice in the state of Maharashtra and Goa. He graduated from the Government Law College, and is currently working with one of Mumbai’s leading boutique Real Estate Law firms. His practice focuses primarily on Real Estate and Commercial Laws.

Keywords:Tenants, Landlords, Maharashtra Rent Control Act, Public Sector Undertaking Properties, Supreme Court India, Public Premises Act, arbitrary increase of rent, repair, redevelopment of rundown buildings, jurisdiction of small causes court, estate officers, General Insurance Corporation of India, Life Insurance Corporation of India, landlords


  1. can you specify which judgement are you referring to?

  2. sushant, with respect to, Public Premises Act: It allows recovery of rent arrears from tenants.
    what happens if the evicted tenant cannot afford the rent arrears? what realistic action is taken by such PSUs?

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