• ‘Archaic’ Delhi Rent Control Act 1958 – a boon for shopkeeper-tenants, or a bane for shop-owners?
    ‘Archaic’ Delhi Rent Control Act 1958 – a boon for shopkeeper-tenants, or a bane for shop-owners? 
"Due to the act, shop-owners have been deprived of their right to earn their livelihood by renting out their property at the market rate."
Anil Pershad, the owner of 139 shops in Chandni Chowk, has not been collecting rent for his shops for many years now. “I don’t even ask for the rent as it is a paltry sum of Rs 9,750 per month in total,” confesses Pershad, owner of the famous 170-year-old Chunnamal ki Haveli.

Each shop fetches Pershad a rent of Rs 75 per month. Many landlords like Pershad say that they earn a pittance from properties that are worth crores of rupees because of the ‘archaic’ Delhi Rent Control Act 1958.

Before the Delhi Rent Control (DRC) Act, 1958 was implemented, Pershad's family owned almost half of Shahjahanbad and nearby areas including the Gulabi Bagh development area, Oberoi Swiss apartments in Civil Lines, Majestic Cinema hall in Sadar-Paharganj area. “Originally intended to protect the migrant population from arbitrary rent hikes by wealthy landlords, the Act came under intense scrutiny when it was reduced to a tool to harass landlords,” opines Pershad. Post the implementation, he had to but to sell-off most of his property or his lands would have been encroached.

Seeking judicial intervention and challenging the constitutional validity of 1958 Act, A Delhi High Court lawyer Shobha Agarwal has even  filed a petition in the High Court. Shedding light on the matter, Agarwal, explains that the Act applies only to those properties having monthly rent less than Rs. 3,500. “Most shopkeeper-tenants in Old markets in Delhi including Connaught Place, Karol Bagh, Chandni Chowk fall in this category and sometimes pay rents as low as Rs 10 per month. The only increase allowed under the 1958 Act is 10 percent every three years,” she says and adds, “With such low rents, it will take generations to cross Rs 3,500 mark. To put it more simply, if someone is paying Rs 100 as rent per month it will take 111.09 years for the rent to reach Rs 3,500. The property cannot be even vacated.”

Debate continues from hereon...
The Traders’ Associations, on the other hand, is against the repealing of the 1958 Act. “At the time when the landlords rented out their property, the tenants had paid ‘pagri’, an amount equal to the cost of the rented premises. As Delhi administration was under the rule of power of Attorney at that time, property was non-transferrable. So the landlords had negotiated with the tenants (who were actually buyers of the property) to give away the pagri,”  points out Praveen Khandelwal, Secretary General, Confederation of All India Traders (CAIT), adding further, “Now that the property rates have increased, the landlords want the 1995 act to be enforced which consists of eviction of the tenant in case of bona-fide requirement of the owners.”

The High Court lawyer, however, maintains that due to the act, shop-owners have been deprived of their right to earn their livelihood by renting out their property at the market rate

“In 2013, Centre had consulted Delhi government if Delhi Rent Control Act 1995 should be enforced. At that time, Shiela Dikshit was the Chief Minister and she suggested that status quo can be maintained,” elucidates Agarwal.

Recently, Centre clarified its stand before HC saying it plans to draft a New Delhi Rent Bill instead of enacting the amended 1995 Act. “The centre has been delaying this issue so as not to lose the votes of the poor. However, as per my view, repealing of the 1958 act will not cut their votes. This act is not against the poor. It will stabilise market rates instead,” she underlines.

The last hearing by the Delhi High Court was held on April 30. Advocate Pranav Jain represented the association of landlords and appealed a bench headed by Justice BD Ahmed to fix a specific day to wrap up the cases in point that have been hanging for several years.  Next date of hearing has been fixed for August 20 and shopowners are hopeful that they will achieve a breakthrough.