Fate of Rent Control Act is still in limbo

The Maharashtra Rent Control Act, sanctioned by the President of India KR Narayanan in 2000, has been mired in controversy from the word go. The Act  found critics among both the landlords and the tenants.

The landlord association had challenged in the Supreme Court the constitutional validity of standard rent provisions of the Maharashtra Rent Control Act, whereby rents frozen at the 1940-level were permitted to be increased by 5% and then 4% annually, and provisions of the Maharashtra Housing and Area Development Authority (Mhada) Act.

Citing the permitted rise in rent as unreasonable, the property owners’ association had said that it was not possible for them to carry out repairs in their dilapidated buildings.
The Act has been languishing with the Supreme Court since 2001. The issue came to a standstill when a seven-judge bench hearing the case referred the litigation to a bigger bench due to the numerous constitutional queries it raised.

The Chief Justice of the Supreme Court was expected to announce a new bench comprising nine judges to hear the case but it has been delayed.

The landlord association had also questioned the validity of a Mhada provision which enabled acquisition of a cessed building on payment of 100 months rent by tenants if at least 70 per cent of them form a co-operative society.

According to property owners association, 100 months rent fetches Rs 10 per sq foot (psf) for a property worth atleast Rs 5,000 psf. “When the property taxes are so high, why should the landlords repair their old buildings,” asked a owner.