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Commercial tenants can be evicted: SC

delhi Updated: Apr 18, 2008 01:47 IST
Bhadra Sinha
Bhadra Sinha
Hindustan Times
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A tenant in a commercial property will have to vacate the premises if the landlord’s need is bona fide, the Supreme Court has ruled. The apex court has partly struck down a provision of the Delhi Rent (Control) Act, 1958 that barred landlords from evicting tenants from non-residential or commercial premises on the ground of bona fide requirement. It restricted landlords’ right to seek eviction of tenants only to premises let out for residential purposes.

Setting aside a Delhi High Court verdict, a bench headed by Justice BN Aggarwal said a tenant occupying commercial premises was no different from the one who lived in a rented house and can be evicted by the landlord.

The court partly declared section 14 (1) (e) of the 1958 Act unconstitutional as it "violates the doctrine of equality embodied in Article 14 of the Constitution." It said: "legislation which may be quite reasonable and rationale at the time of enactment may with the lapse of time, due to change of circumstances, become arbitrary, unreasonable or violative of the doctrine of equality."

The judgment will impact thousands of shopkeepers in the Capital including those in Connaught Place, Chandani Chowk, Karol Bagh and South Extension. Most of the traders in these markets are occupying the premises for decades. The 1995 Delhi Rent Act, considered to be pro-landlord, could not be implemented, as the Government did not notify it in view of vehement protests from the traders' lobby.

So far, eviction of commercial premises could be ordered on account of non-payment of rent, sub-letting, or if the premises were locked for more than six months. But, now, landlords can seek eviction of commercial premises on the ground of bona fide requirement. The Delhi Rent (Control) Act is applicable only to premises where the rent is less than Rs 3,500.

The bench disagreed with the Delhi High Court that upheld the validity of the section on the basis of a 1973 HC order, which said a restriction on the landlord's right to recover possession of only residential premises was important to safeguard the interests of those uprooted from Pakistan. The Supreme Court, however, said the 1973 judgment should not be a ground to reject the appeal challenging the validity of Section 14(1)(e) as the refugees from West Pakistan and their next generations have settled down and were doing.