The Maharashtra Rent Control Act,1999
INTRODUCTION
The Maharashtra Rent Control Act, 1999 ("the New Act") has finally emerged as an enactment
passed by the Maharashtra Legislative Council on 16th December 1999 and by the Maharashtra
Legislative Assembly on 21st December 1999. Both the legislatures have amended the Bill VI of
1993 before the enactment of the New Act. It now awaits the sanction as contemplated in the
Constitution of India.
The New Act has significantly omitted the provisions relating to hotels. It has broadly categorized
purposes for its applicability to premises let for residence, education, education business, trade, or
storage, leaving out premises industrial galas or estate. The New Act has exempted from its
applicability the premises belonging to the govt., local authorities or public undertakings whilst
the government has the discretion to decide on its application and its terms to premises used for
public charitable trusts for religious or charitable purpose.
The provisions relating to standard rent or permitted increases do not apply to premises occupied
by persons who were hitherto tenants in an old building and who occupies the new premises which
is constructed as per provisions contained in Sections 6, 20, 21 of the New Act or to the new
premises constructed under Government Housing Scheme or under MHADA.
Standard rent contemplated is as fixed by the court plus 5% thereon and when there is no standard
rent as fixed by court it is to be fixed on the basis of the base year being 1st October, 1987. Two
factors require to be noted are that (a) any such fixation has to be just and (b) that having regard
to the preamble it has to assure fair return on new construction. Further Section 9 of the New Act
provides that the standard rent already fixed has to be 'duly fixed on merits'. This may lead to
challenges to fixation by consent simpliciter. The same section also sets out that it has not to be
collusive or fraudulent, or having error of facts, as the fixation can be set aside on such grounds.
Further the provision also sets out that structural change or alterations or change in amenities can
be grounds applying for fixation even if it was earlier fixed. Section 11 provides for 4% increase
per annum after one year of commencement of the Act.
Improvement or structural alterations made with consent of 70% of tenants agreeing in writing to
the same would also enable the landlords to increase rent proportionally to costs and rent in ratio
which they bear. For special alterations or structural change, overall increase up to 15% is provided
for. Increase in rates, cess etc. or electrical charges will also enable rent to be increased.
Chapter II provides that tenant cannot be evicted so long as he complies with terms and conditions
of tenancy and pays and shows his readiness and willingness to pay standard rent and permitted
increases. Any suit on ground of non-payment of rent has to be filed after expiry of notice. Chapter
IV provides for other grounds available against tenants. Chapter V sets out special provisions for
recovery of possession in respect of members of armed forces, employees of union of India,
scientists etc.
Sections 25 and 27 add to the class of tenants provided for in the Act. Deemed tenants from among
the hitherto subtenants with subsisting subtenancy, Government allottees and service tenants.
Chapter VII and VIII are remedial provisions. Chapter IX provides for miscellaneous provisions
though sections 55, 56 are of great significance. For one thing section 55 provides that Agreements
for tenancy or license require to be registered whilst section 56 makes hitherto illegal payments
such as premium or considerations to be now lawful charges paid or received by tenants or
landlords. These provisions are bound to usher in change in relationship of landlords and tenants
and in nature of litigations.
Further market factors affecting building activities and accommodation problems have been sought
to be tackled in terms of base year and upward revision in rent and its adequacy will soon catch
attention for debate as periodical feature.
The Bill as proposed being Bill VI of 1993 has undergone changes while being passed by the
Houses of Legislatures. The idea of making premium lawful was mooted therein. While so
providing the Committee had noted that premium were being paid and transaction used to take
place;
(a) at the time of granting tenancy;
(b) at the time of renewal of lease;
(c) at the time of transfers of tenancy.
Further, it generated unlawful funds which could not be used for purposes of repairs or
reconstruction etc. This, it is thought, if made lawful can release funds for construction etc., for
increase in stock of houses. The other important and innovative idea mooted pertains to requiring
Agreements to be registered. This effort seems to achieve to be to finality in terms of tenancy.
Both the suggestions have been incorporated in the Act.
In spite of the above discontent, dispute, debate and enactment or statutory amendment seems to
be the fate of all such socio-economic legislations.
