The Assam Urban Areas Rent Control Act, 1972- Important Provisions- Part I

INTRODUCTION:

This Assam Urban Areas Rent Control Act, 1972 was passed to restrict temporarily the increase of rents of houses situated within the limits of urban areas in Assam including Cantonments.

It is aimed at constraining rent to temporarily increase the rents of houses situated within the limits of the Urban areas as specified by the State Government.

OBJECTIVES OF THE ACT:

(a) To give the tenant security of tenure, at a fair rent, not above standard rent.

(b) To prevent the landlord from evicting tenants except on specified grounds.

Main Provisions:

(i) Fixation of fair rent (standard rent) by the court; subsequent increase and revision

(ii) Grounds of recovery of possession by the landlord (of the house) from the tenant and bar to passing of a decree by the court for ejectment of a tenant or to execute the same except on specified grounds in Section 5.

(iii) Deposit of rent in court, when landlord refuse to accept lawful rent offered by them (tenant)

(iv) Suits for ejectment and rent

(v) Appeals against orders and decisions of the court

IMPORTANT PROVISIONS OF THE ACT

PROCEDURE OF DETERMINATION OF RENT & BARS AGAINST PASSING AN ORDER AND DECREE FOR EJECTION:

The definition of standard rent as given in the Assam Urban Areas Rent Control Act, 1972 differs from that of the old Act of 1966, which makes the estimated construction cost and value of land to be much higher than it would be at the time of construction.

But to be fair to the tenant, it also deducts from it, an amount called Depreciation, at the rate of 1 per cent per year, in the case of a pucca structure and 2 per cent in the case of other structures.

The depreciation under Section 2(e) is calculated from the point of completion of the construction of the house. In some cases, the house was extended into a different house or even a pucca structure, and in such a case, the depreciation will be calculated from the date of completion of such extended house or pucca structure.

In the case of multistoried buildings, since the floors above the ground floor do not rest upon the ground, it may so happen that the value of the land may be overlooked while fixing the standard rent of the floors separately.

The definition, therefore, provides specifically that the floors above the ground floor, the value of the land should be taken into consideration, as is done in the case of a ground floor.

But one thing is not clear in the definition, that is, what proportion of the value of the land should be taken into account while fixing the rent for each floor.

The full value of the land should be taken into account be added to the construction cost of each floor that would be double-counting and benefiting the owner with something which is not due.

The best way seems to be to divide the total land value by the number of floors and then add the quotient to the construction of each floor.

Another difficulty is that in the case of Non-pucca structures, standard rent, considering the 2 per cent depreciation, will be reduced to a very insignificant, even though the house may be in a good condition for example Shillong.

The nature of standard rent is fixed by the court on procedural calculation under the act, not an agreement between the parties.

( Jhumarmal v. Kamakhya Temple )

DETERMINATION OF FAIR RENT:

The landlord and tenant, can definitely fix an amount of rent payable to the landlord by the tenant, in respect of a house, and so long the fair rent is not determined by the court under this section, it would be lawful for the landlord to compel the tenant to pay the rent agreed upon.

In the failure of the tenant to pay such rent, the landlord can lawfully bring a suit for ejectment of the tenant from the house.

But any agreement for the payment of rent above the fair rent is void.

Where no fair rent has been fixed, an agreement entered into between the landlord and tenant, for enhancement of rent cannot be declared null and void.

But where an agreement for fair rent has been fixed, there can be no enhancement of rent, except as per provisions of the act. The provision of the act is enacted to save the tenant from terms of an on press agreement when the terms are to his detriment.

(Venkataraman v. Abdul Wahab)

The procedure for the determination of rent is given under Section 4.

Under Section 4(1) of the act, a proceeding is to be started on an application made either by the landlord or the tenant. The application cannot be said to be a plant because all the requirements of the plaint are not contained.

The course of action of the court for pursuing an order under Section 4 of the act is provided under the act itself, which is not similar to a suit.

(Dhirendra Krishna Paul v. Santi Ranjan Dey)

Such an application can be made either by the landlord or the tenant and after receiving such application, the court shall issue notice on both parties. Without issuing notice, the rent under this section cannot be determined.

The court shall thereafter make some enquiry. On such enquiry, as the court may deem fit, determines the monthly rent for the house. The rent so determined shall be binding on both parties.

Such an order is appealable and the rent determined is that of an unfurnished house and the landlord can charge additional costs of the furniture applied to the tenant, given that entire data of the issue of the order, the cost of the furniture, must not exceed one-twelfth of seven and a half per cent of the cost of furniture.

When the rent is payable on a basis, other than a monthly rate/rent, or yearly rent, the average monthly (rate) rent for such a house, shall be calculated as thirty times proportional to daily rent, for the period in such of which the arrangement has been made, between the landlord and the tenant.

COMPARISON BETWEEN STANDARD & CONTRACTUAL RENT

The standard rent preceding to the fixity of the fair rent can be the contractual rent but is the rent fixed as standard rent by the court on the previous occasion and the enhancement rate to the extent of maximum up to 50% would be applicable on the case of revision of the standard rent after 5 years of its fixation.

As per the definition of standard rent is calculated under the provisions of Section 3.

Contractual rent may be lesser than the standard rent given in Section 3(1), but it cannot be termed as standard rent.

‘Standard Rent’ in Section 3(2) is the rent fixed by the court on procedural calculation and not the contractual rent agreed between the parties.

Once the standard/fair rent is fixed by the court, revision of the same can be made only after 5 years. But once the contract is agreed by the parties, prayer for the determination of standard rent/fair rent by the court can be made at any time by any of the parties.

The fair/standard rent fixed by the court, for the first time, may exceed more than 50% of the existing contractual rent and such fixation can be allowed under the law.

In exceptional cases, when the fair rent exceeds considerably higher than 50% of the existing contractual rent, the court may exercise its discretion to assure substantial justice to the parties in such a manner so that the tenant’s burden may not be so increased unbearably and the landlord also may not –suffer a loss.

RIGHTS AND OBLIGATIONS OF TENANT & LANDLORD:

Rights of Landlord:

(i) Landlord is having the right to claim reasonable and fair rent

(ii) Right to enhance rent under certain circumstances

(iii) They have the right to seek recovery of possession of the property, in case, the landlord requires it for a genuine cause

(iv) Right to file an ejectment, if the tenant fails to pay rent on time or any other, such illicit or illegal activity, including but not limited to causing a nuisance to neighbours.

Obligations of the Landlord:

The obligations of the landlord have been discussed under section 6 of the act, and these are certain duties of the landlord towards the house, let out to a tenant.

Duties which are required to be performed by the landlord are three-fold:

1. The landlord is bound to keep the house, windproof and waterproof, in case of occupation by a tenant.

2. The landlord is required to carry out other repairs which he is bound to make by law, contract or custom. The word ‘repair’ however, includes – annual whitewashing and re-colouring.

3. The landlord is required to maintain the existing essential supplies and services such as sanitary arrangement, water supply, supply of electricity or drainage in respect of the house.

Under Section 6, a landlord is bound to maintain existing essential supplies and services such as sanitary arrangements, water supply, supply of electricity and/or drainage systems.

Such maintenance of essential services is not meant to be governed by any contract or customs. The landlord has to see that the supply of the essential services is not disrupted and in case of such discontinuation, it is the bound/binding duty of the landlord to make good of it, either by repair or by replacement.

Rights of the Tenant:

(i) Right to pay fair and equitable rent

(ii) Protection from arbitrary ejection by the landlord

(iii) Right to deposit rent in court, when a landlord refuses to accept such lawful rent

(iv) Right of the tenant to move the court for deciding fair rent/standard rent

(v) Right to receive or demand repairs of essential services of the house

Duties of the Tenant:

(i) To pay fair and equitable rent on time to the landlord.

(ii) To not indulge in any illicit or illegal activity, or causing any discomfort or nuisance to the neighbours.

(iii) To only make changes or modifications to the house with the prior consent of the landlord.

(iv) To use and maintain the property in such a way, to not render it unfit for future use.

Since the Act is quite comprehensive, we have divided the important provisions into 2 parts. The link to the second part- The Assam Urban Areas Rent Control Act, 1972 Part II