By Varun Singh

A tenant who failed to vacate the flat even after termination of the leave and license agreement was asked to pay Rs 10 lakh as damages to the landlord.

This order was passed by the Court of COMPETENT AUTHORITY RENT CONTROL ACT, KONKAN DIVISION AT MUMBAI on November 17, 2021.

An application was filed under Section 24 of the Maharashtra Rent Control Act, 1999, (the Act) to recover the vacant and peaceful possession of Flat located in Bandra (West), Mumbai-400 050 and damages.

The contention of landlord (applicant) was that in around November 2018 the tenant (respondents) approached the applicant and requested to permit them to use and occupy the landlord’s premises on leave and license basis for residential purpose of their family for a period of three years.

Accordingly, on December 1, 2018 the leave and license agreement was executed. The period of leave and license agreement was commencing from December 1, 2018 and ending on November 30, 2021. The license fee was fixed at the rate of Rs 1 lakh per month. The lock in period was of one year, which expired on November 30, 2019.

It was the contention of the landlord (applicant) that the tenant (respondents) were irregular and delayed in making payment of license fee from the month of January, 2019 . Only repeated follow-up and making several requests would the license fee be paid.

The landlord further claimed that, the tenant (respondents) breached and violated the terms and conditions of the leave and license agreement. Therefore, he served termination notice dated March 10, 2020 upon the tenant and called upon to handover the vacant and peaceful possession of the premises.

The premises was to be vacated on April 15, 2020. Due to the situation of Covid-19 pandemic, the landlord granted additional time to vacate the premises on humanity grounds. The tenant in this period were paying the license fee belatedly.

The landlord further contended that after unlock 1.0 movements were permitted by the State, from June 1, 2020 yet the tenant did not act upon the opportunity that was available. The landlord claimed that despite request the tenant (respondents) failed to handover the vacant and peaceful possession of the application premises. So, the applicant is entitled for license fee from June 1, 2020 with damages on wards till the handover the vacant and peaceful possession of the premises.

The tenant (respondents) appeared and filed an application for leave to defend, which came to be rejected.

The Competent Authority noted the following points after hearing both the parties.

• Considering the nature of proceeding it is summary under chapter VIII of the Act for the speedy disposal of controversy in between licensor and licensee in respect of specific premises given for specific period.
• In continuing to this the Competent Authority is to see whether leave and license agreement executed or not. It is to be noted that the attraction of Section 24 the Act, it is to be establish the relationship as licensor and licensee, execution of agreement, period of expiry and ownership as held by Hon’ble Bombay High Court in case of Dinkar Deshmukh Vs. Vasantdada Sugar Institute, Pune reported in 1997 (1) Mh. L J 188. In this regard the applicant relied upon leave and license agreement dated December 1, 2018. The applicant filed verified copy of leave and license agreement on record. On perusal of leave and license agreement it appears that applicant is the licensor and the respondents are licensees. The period of leave and license agreement is yet to be expired.
• It is a contention of applicant that the respondents were breach the terms and conditions of the leave and license agreement, therefore the applicant issued termination notice dated March 10, 2020 and terminated leave and license agreement. The said termination is admitted by the respondents. Therefore, the applicant rightly terminated leave and license agreement as per terms and conditions of the leave and license agreement. The respondents paid Rs 5,00,000/- as interest free security deposit. Hence, the applicant proved all the necessary ingredients of the Section 24 of the Act.
• In continuation to this as per Section 55(1) of the Act any agreement for leave and license shall be in writing and shall be registered under the Registration Act,1908. In the case in hand the leave and license agreement is registered with Joint Sub Registrar, Andheri-3, Mumbai.
• Apart from this, as per explanation-b to Section 24 of the Act the agreement in writing shall be conclusive evidence of facts stated therein. Therefore, in view of the verdict of the Hon’ble High Court in case of Amit Dalal Vs. Rajesh Doctor reported in 2010(7) Mh.L J 1 the necessary order needs to be passed by the Competent Authority on expiry of the period of license. In the case in hand the respondents failed to vacate the application premises after termination of leave and license agreement. Therefore, the applicant is entitled for possession of application premises.
• As per Sub Section 1 & 2 of Section 24 of the Act the licensor got the right to evict the licensee from the premises on expiry of the period of license failure to vacate the premises by licensee along with damages. The Hon’ble High Court in the case of Geeta N. Shivdasani Vs. Niraj T. Sharma & ors., reported in 2009(4) All MR 821 held that “once it is established that Agreement of Leave and License is in writing, the courts cannot took into intention of parties and if period of the License has expired, the Competent Authority is statutorily obliged to pass an order of Eviction on an application made to it under the provisions of Rent Control Act, 1999 and on failure to vacate, the licensee shall be liable to pay double rate of license fees.” The ratio laid down in the case cited supra does squarely apply to the facts of the instant case. In the instant case also, there is written and registered leave and license agreement. The period of leave and license agreement is expired by termination.
• In this regard the averments made in application reveal that after termination of leave and license agreement the respondents were in possession upon the application premises. However, the respondents did not vacate the application premises after termination of leave and license agreement. But during the pendency of present application, on October 31, 2020 the respondents handed over the vacant and peaceful possession of the application premises to the applicant. This fact is admitted by the applicant and filed pursis at Exh.25 contending that she has received the possession of the application premises on October 31, 2020.
• On above discussion as per Sub-Section 2 to Section 24 of the Act on expiry period of license the continuous possession on the part of respondents or licensee become illegal and liable to pay the damages at the double rate of fixed license fee. In the present case after termination of leave and license agreement i.e. from June 1, 2020 to till October 31, 2020 (though the period of termination notice expired on April 15, 2020, but the applicant claimed damages from the month of June,2020) the possession of the premises with held by the respondents become illegal and for that needs to be imposed damages as per the statutory provision upon the respondents /licensees.

The Order

As per Explanation-b of Section 24 of the Act, an agreement of license in writing shall be conclusive evidence of the fact stated therein. Accordingly, the applicant has complied the mandatory requirements of the Section 24 of the Act, so also brought on record the continues possession after termination leave and license agreement i.e. form June 1, 2020 to till October 31, 2020 so as to claim damages. The respondents have handed over the possession of the application premises on 31.10.2020. Therefore, as per Sub Section 2 of Section 24 of the Act, the applicant is entitled for license fee at the double rate for a period of 01.06.2020 to 31.10.2020 i.e. 1,00,000 X 2 = 2,00,000/- per month i.e. 2,00,000 X 5 = 10,00,000/- from the tenant.

In view of the discussions noted above, the competent authority was of the view that the landlord (applicant) shall be entitled for damages from the tenant (respondents). In such circumstances, I am of the considered view that the application filed by the applicant deserves to be allowed.

The tenant were directed to pay a double license fee a sum of Rs.10,00,000/- for the period of June 1, 2020 to October 31, 2020 to the landlord (applicant) within 30 days. The landlord is also at liberty to appropriate the security deposit, if any.

Advocate Speaks

Prakkash Rohira, advocate for the applicant shared with SquarefeatIndia that ” It had become a common contention of people seeking non payment of Rent and License Fees due to Covid-19. People tend to litigate with the Flat owners once in possession, and stop paying rents, which is unfair to the Owners, specially the ones who are Senior Citizens. The Respondents presented several instances to evade and delay payment, which when brought before the court, was evident. The Judgement of the Hon’ble Court is appreciated.” 

Also Read: Pay 50% rent till September, new offer from landlords

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By Varun Singh

On Wednesday the Union Cabinet approved the Model Tenancy Act (MTA) for adoption and enactment by states/UTs to promote rental housing in India.

The official twitter handle of Ministry of Housing and Urban Affairs, tweeted, “MTA envisages to balance the interests and rights of both the owner and tenant in accountable and transparent manner.”

As per Memorandum of Understanding (MoU) signed by States/UTs under PMAYUrban, they would either legislate or amend existing rental laws on the lines of MTA.

After enforcement of this Act, no person shall let or take on rent any premises except by an agreement in writing.

MTA will be applicable prospectively and will not affect existing tenancies and will cover both urban and rural areas.

A digital platform will be set up in the local vernacular language or the language of the State/UT for submitting tenancy agreement and other documents.

One of the salient features of the Model Tenancy Act is time bound and robust grievance redressal mechanism comprising of Rent Authority, Rent Court and Rent Tribunal to provide fast-track resolution of disputes.

The Act specifies, isposal of complaint/appeal by Rent Court and Rent Tribunal will be within 60 days.

According to Dr. Niranjan Hiranandani, National President, NAREDCO, the Model Tenancy Act will facilitate unlocking of vacant houses for rental housing purposes.  It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage. The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market.

Anuj Puri, Chairman – ANAROCK Property Consultants says, this act will bridge the trust deficit between tenants and landlords.

Puri said, “The Model Tenancy Act will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country.”

According to Puri, this Act can fuel the rental housing supply pipeline by attracting more investors, and more rental housing stock will help students, working professionals and migrant populations to find urban accommodation (especially in COVID-19-like exigencies).

“Once implemented in all fairness across states, it will go a long way in formalising and stabilising the rental market. It would also revive the fortunes of not just the rental market but the housing sector at large.”

Anuj Puri, Chairman – ANAROCK Property Consultants

The move is expected to help both the tenants and the landlords and help them resolve issues.

Rohit Poddar, Managing Director, Poddar Housing and Development Ltd says, “The Act will help in building a better tenancy market. The terms and conditions of the rental tenancy are clear to both landlords and tenants and reduce a significant number of disputes that take place due to unwritten agreements, thus the move will benefit both the landlords and tenants by creating a cohesive and sustainable environment.”

Anand Gupta, of Builders Association of India is hoping that the act will facilitate housing for all in the country.

According to Pankaj Bhansali, COO, Eqaro Guarantees Pvt Ltd, the new act would bring in over 11 million urban houses into the rental market and help address the country’s massive housing shortage.

He said, “The move will help address the high number of vacant residential units in India, which is over 11 million houses, making it economically productive, reducing litigation, and encouraging trust between the landlord and the tenants. The new model Tenancy act will also encourage and attract institutional investments into the residential assets.”

However, Puri also says that, while the Model Tenancy Act is a step in the right direction by providing a clear roadmap for states to follow, it will remain to be seen to what extent the states will toe the central government’s line.

Bhansali is hopeful that, like the RERA law, the Model Tenancy Act will reform the rental housing business in India with utmost transparency.

Also Read: Read How MahaRERA Decides Seniority of Complaints

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