As a law firm, we are pleased to provide an informative and detailed opinion on Section 3 of the Delhi Rent Control Act, 1958. This section pertains to the determination and fixation of fair rent payable by tenants to landlords in relation to any premises.
Section 3 establishes that no landlord can charge more than the fair rent for premises occupied by their tenants. The Act defines ‘fair rent’ as the standard rent or special rate determined under Sections 4 to 7A for a given premise. It is pertinent here to highlight that ‘Standard Rent’ has been defined under Section 6 of the said act where reference was made about prior agreement between tenant & landlord with regard to amount of monthly rental charges, otherwise it will be considered as “reasonable” at which such accommodation could have been rented out if without including any furnishings but inclusive all other facilities.
Additionally, Section 4 provides for how fair rents should be determined when there is no pre-existing tenancy agreement between a tenant and landlord or where there has been substantial alterations in accommodation since last known standard rents were fixed. In case where there was substantial alteration in nature of accomodation then provisions mentioned u/s .14 would apply while fixing Fair Rent.
In this context, several case laws have played important role in interpreting various provisions related with determination & fixation of Fair Rent through various interpretation:
Shalimar Tar Products Ltd vs H.C.Sethi (1961) – Hon’ble court held that Fixation of reasonable return on letting property belongs essentially and predominantly not so much to property law as business-economic policy with social implications
Krishna Gopal Vs Vinod Kumar (1979) – Court clarified on what ground does Landlord entitledto claim Standard/Fair Rental value over market rates prevalent at given point time , explaining meaning & scope term “ruinous condition” alongwith repairs required under s.14(1)(b)
Wharton Vs Masters (1949) – Guided on how to calculate “reasonable outgoings” for fixing Rent under section 6 when there is no pre-existing contract between landlord & tenant
Union of India Vs Prafulla Kumar Mukherjee, (1984) – Hon court enunciated how “market value” can be calculated alongwith provisions related with standard rent in given situation.
It is essential to note that Section 3 and its related provisions play a crucial role in safeguarding the interests of Non Resident Indians while they lease or rent any property in Delhi. They ensure that Indian landlords do not overcharge NRI tenants or demand rents above the fair market value, thereby protecting NRI’s economic rights in India.
In conclusion, we would like to state that this law guarantees even-handedness between landlords and tenants by establishing a standardized rent structure which enables both parties to benefit from their leased premises’ productive use without getting into unnecessary legal battles because they were charged unfair rental amounts.