Rent Control Laws in India

Rent Control legislation before and after the Independence of India

Before the partition of Bengal, there was no rent restriction legislation prior to 1942. The first rent control measures came in the form of the Bengal House Rent Control Order, 1942, and the Bengal Hotels and Lodging Houses Control Order, 1942, both of which extended to the whole of Bengal. These were followed by the Calcutta House Rent Control Order of 1943, which applied specifically to tenancies within Calcutta as defined under the Calcutta Municipal Act, 1923. The Act of 1943 excluded the Bengal House Rent Control Act, 1942. All these control orders expired on 30th September 1946.

With the end of the Second World War, the housing problem continued unabated. To address this, the Calcutta Rent Control Ordinance, 1946, came into force on 1st October 1946 and was extended to all municipal towns. It was later replaced by the Bengal Ordinance Temporary Enactment Act, 1957. After the partition of Bengal in 1947, the large influx of refugees into West Bengal made the housing shortage in Calcutta and other municipal areas even more severe. To control rents and curb unlawful landlord practices such as the demand for selami, the State Legislature passed the West Bengal Premises Rent Control Act, 1948. However, this Act proved unsatisfactory, and the Calcutta High Court identified drafting defects that affected many pending suits and proceedings, making an amendment necessary. The Amending Act of 1950 sought to remedy these issues.

The 1950 Act was temporary in nature, initially set to last until 31st March 1953, but it was extended to remain in force until 31st March 1956. Recognising the need for a permanent law that would protect tenants while also encouraging landlords to invest in new construction, the West Bengal Premises Tenancy Act, 1956, was enacted and came into force on 31st March 1956. Over time, it was amended on several occasions, including in 1965, 1968, 1969, 1970, 1975, 1976, 1986, and 1988, in order to maintain a balance between the interests of landlords and tenants.

Later, the Central Government prepared a Model Rent Control Legislation to bring about uniformity across the states and to stimulate housing development. Based on this model, the West Bengal Premises Tenancy Act, 1997, was enacted by the State Legislature and received the President’s assent on 28th November 1998.

The enactment of rent control legislation became necessary due to the acute shortage of accommodation in urban areas, which arose from several interlinked socio-economic factors, particularly migration to cities in search of employment and livelihood. The primary object of such legislation was to prevent rack-renting, monopolistic fixation of rent, and arbitrary eviction of tenants by landlords seeking higher income. Accommodation is recognised as a basic human need, second only to food and clothing, yet in the absence of regulation it was reduced to speculative trading. Rent control laws, therefore, apply specifically to urban areas, which are composed of residential, commercial, administrative, educational, and vocational segments. These segments complement each other, as habitation cannot grow without employment, education, healthcare, and other facilities, nor can commerce thrive in the absence of a resident population. Together, these needs form the foundation of urban settlements.

Rent control legislation should be guided by a scientific rationalisation of rent structures, ensuring a fair return on investment for landlords, while also allowing eviction of tenants in limited circumstances—such as when the landlord requires the property for personal use or to protect it from damage. At the same time, the State bears a duty to provide protection and shelter for weaker sections of society.

The international community has also addressed the issue of housing and urban settlements. The first UN Habitat Conference was held in Vancouver in 1976, followed by the Istanbul Convention in June 1999, which culminated in the Istanbul Declaration. These conventions emphasised the need for sustainable urban settlements, recognising that human habitation requires a balanced coexistence of all social, economic, and environmental components. In his opening address at Habitat II, the UN Secretary General invited world leaders to endorse the universal goals of adequate shelter for all and to work toward making human settlements safer, healthier, equitable, sustainable, and productive. The discussions focused on two major themes: the provision of adequate and sustainable human settlements, and urban development in a rapidly urbanising world. The conferences recognised cities and towns as centres of civilisation, engines of economic growth, and hubs of social, cultural, spiritual, and scientific advancement.

The Istanbul Declaration of 1999 recorded the commitments of member nations to the Habitat Agenda, including the provision of adequate shelter for all and the creation of sustainable urban settlements. Relevant commitments included creating an enabling environment for economic, social, and environmental development as mutually reinforcing aspects of sustainable progress, and integrating urban planning with housing, transportation, employment, environmental conditions, and community facilities. The Action Plan adopted at the conference called on governments to strengthen the linkage between shelter policies and broader goals such as employment generation, environmental protection, cultural preservation, resource efficiency, and sustainable development. It also emphasised the need for legal security of tenure and protection from discrimination that might undermine the pursuit of “adequate shelter for all” and “sustainable human settlement.”

Since India is a signatory to these international conventions, it is obliged to give effect to the basic principles of the Habitat Agenda through its municipal laws and policies, ensuring that its rent control and housing legislation reflects these global commitments.

Transfer of Property Act 1882

Reading Sections 105 and 107 together, it is clear that if a lease of an immovable property from year to year or, for any term exceeding one year or reserving a yearly rent is to be made, it can only be made by a registered instrument executed by both the lessor and lessee. All other leases of immovable property can be made either by a registered instrument or by oral agreement accompanied by delivery of -Possession- If other lease of immovable property is made by a registered instrument, then it should be executed by both the lessor and lessee The combined effect of these sections is that a lease of immovable property which is for a period of one year or less, that is if a lease does not exceed the period of one year. it could be executed by oral agreement accompanied by delivery of -possession.

In Ram Kumar Das v. Jagdish Chandra Deo, AIR 1952 SC 23 the Supreme ‘Court held that-

“the tenancy created by implication of law in favour of the defendant should be held to be from month to month since its inception in 1924. The tenancy not being for manufacturing or agricultural purposes it could be regarded as a tenancy from month to month under Section 106 unless there was a. contract to the contrary. The stipulation as to payment of annual rent would no doubt raise a presumption that the tenancy was from year to year but being contained in an inoperative document could not come in the way of raising a presumption under Section 106. A lease for one year certain could not be inferred from the payment of annual rent because to do so would be to substitute a new agreement for the parties which they never intended to do.”

After considering the implication of Section 106 of the Transfer of Property Act, it was further observed-

“It is not disputed that the contract to the contrary, as contemplated by Section 106, T. P. Act, need not be an express contract; it may be implied, but it certainly should be a valid contract. If it is no contract in law, the section will be operative and regulate the duration of the lease. It has no doubt been recognize in several cases that the mode in which a rent is expressed to be Payable affords a presumption that the tenancy is of a character corresponding thereto. Consequently, when the rent reserved is an annual rent, the presumption would arise that the tenancy was an annual tenancy unless there is something to rebut the presumption. But the difficulty in applying this rule to the present case arises from the fact that a tenancy from year to year or reserving a yearly rent can be made only by a registered instrument, as laid down in Section 107, T. P. Act. The Kabuliyat in the case before us is undoubtedly a registered instrument but ex concesis it is not an operative document at all and cannot consequently fulfill the requirements of S. 107, T. P. Act.”

“Kabuliyat executed by the lessee cannot be looked into as evidence of showing that the lessee asserted at any time that he was a permanent tenant because the kabuliyat cannot be treated as embodying any contract between the parties. The mere assertion in the kabuliyat by the alleged lessee is not of much consequence because the alleged lessor cannot be saddled with knowledge of such section.. The tenancy by payment and acceptance of rent comes into existence afterwards, and the assertion of a claim to hold as a Perm-anent tenant must be range openly and to the knowledge of the landlord as a continuous course of conduct from the very time of his entry into possession before it can be held that the teriant has acquired the limited right of a permanent tenant by adverse -possession or that the landlord’s right to recover is barred by limitation. While, therefore, the statement made by the lessee in the kabulivats in question, relating to the duration of the lease may be taken into consideration merely as his assertion, his subsequent conduct and assertions must be looked into in order to find out whether he has discharged the onus of proving that he prescribed for permanent tenancy.”

A rent deed (not compulsorily registrable under the Registration Act) executed by a tenant in favour of a landlord, if not registered, can be relied upon to establish the relationship existing between the parties. For, it contains an admission or an acknowledgment by the person attempted to be made liable and should be the very best evidence that me can possibly have as to the oral agreement of a lease and a court is not prevented from looking into it for this purpose

In Ganga Dutt v. Kartik Chandra, AIR 1961 SC 1067, wherein it was observed-

“The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist. Once the prohibition against the exercise of jurisdiction by the court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of the lessor’s right to evict the tenant will not, unless the statute provides otherwise, be conditioned.”

In the case of Kanii Manii v. Trustees of the Port of Bombay, AIR 1963 SC 468, it was observed that once it is held that the tenancy was joint, a notice to one of the joint tenants was sufficient, and the suit for the same reason was also good.