In a recent landmark judgment delivered by the Supreme Court of India, it was held that certain provisions of the Maharashtra Rent Control Act, 1999 (MRC Act) with respect to fixation of standard rent for premises and requiring the landlord not to cut off or withhold essential supply or service and to restore the same when necessary, are not in conflict with or repugnant to any of the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (Public Premises Act). Some of the relevant facts of the case are briefly as under:
A firm is a tenant of premises in Mumbai owned by Life Insurance Corporation of India (L.I.C.) under a lease which has been extended from time to time. In April 2008 L.I.C. demanded an increase in rent on the basis that the ratable value of the building had been raised by the BMC from April 2006 onwards. The firm was called upon to pay the arrears of rent from April 2006 onwards. The firm asked for break up of the rent and since no reply was received, it filed an application under Section 8 (3) of the MRC Act in the Court of Small Causes for fixation of standard rent and also an application for fixation of interim rent.
L.I.C. challenged the jurisdiction of the Court of Small Causes to entertain such proceedings on the ground that the suit premises was a public premises covered under the Public Premises Act and MRC Act did not apply to them. The Small Causes Court held that standard rent application was maintainable under the provisions of MRC Act. Being aggrieved by that order L.I.C. filed a writ petition in the Bombay High Court. The Bombay High Court accepted the contention of L.I.C. and allowed the petition and thereby set aside the order of the Small Causes Court and dismissed the standard rent application. Aggrieved by that judgment and order, an appeal by way of special leave was filed in the Supreme Court.
The court after considering various submissions held that the provisions of the MRC Act with respect to fixation of standard rent for premises and requiring the landlord not to cut off or withhold essential supply or service and to restore the same when necessary are not in conflict with or repugnant with any of the provisions of the Public Premises Act. However, the provisions of the Public Premises Act would govern the relationship between the public undertakings covered under the Public Premises Act and their occupants to the extent they provide for eviction of unauthorised occupants from public premises, recovery of arrears of rent or damages for such unauthorised occupation and other incidental matters specified under the Act.
It was further held that the provisions of the MRC Act shall govern the relationship between the public sector undertakings and their occupants to the extent; the MRC Act covers the other aspects of the relationship between the landlord and tenants not covered under the Public Premises Act. The Supreme Court allowed the appeal. The order passed by the Small Causes Court was upheld. The standard rent application will now be heard and decided on its merits and in accordance with law.
The judgment has clearly defined the position of the tenants in cases where the landlords are PSUs with regard to applicability of the standard rent provision and certain other provisions provided under the Rent Control Act which are not provided for under the Public Premises Act.