Delhi Rent Control Act, A Case for Reference To A Larger Bench

Disputes under the DRC Act constitute a significant percentage of the civil litigation in Delhi. Data from the Central District, Tis Hazari Courts indicates that, as of 31 March 2024, nearly 29.3 of pending civil litigation cases before Sr./Civil Judges/ ARC/RC courts arise under this one statute. These cases often remain pending for decades, keeping properties tied up and entangled in litigation. Throughout this period property owners – across multiple generations – continue to receive only pittance as rent.

At the time of its enactment, the DRC Act operated as an integrated regulatory framework, it restricted eviction under Section 14, provided for fixation of standard rent under Sections 4, 6 and 9; and excluded the jurisdiction of civil courts under Section 50. Overtime however, rents stayed stagnant, and with rising inflation and dwindling value of Rupee, the DRC Act itself became archaic.

Sections 4, 6, 9 struck down – One step forward two steps backward

In Raghunandan Saran Ashok Saran (HUF) v. Union of India 2002 (61) DRJ 457 (DB), a Division Bench of the Delhi High Court struck down Sections 4, 6, and 9 of the DRC Act, holding that the standard rent-fixation provisions had become arbitrary and unrealistic in light of inflationary conditions, thereby violating Articles 14, 19(1)(g), and 21 of the Constitution. With the removal of these provisions, the statutory framework lost its mechanism for determining fair rent.

However, the judgement did not by itself enable landlords to receive market rent; it simply removed those specific statutory limits. This judgement led to the filing of many cases before the district courts in Delhi seeking enhancement of rent, resulting in prolonged litigation and uncertain outcomes.

Will owners ever get fair market rent?

A more restrictive interpretation was adopted in subsequent rulings. In Model Press Pvt. Ltd. v. Mohd. Saied 2008:DHC:3067-DB, the Court held that notwithstanding the striking down of standard rent-fixation provisions, the tenant-protective framework continued to operate and civil suits seeking market rent remained barred under Section 50 of the DRC Act. The landlords were confined to receiving the agreed upon contractual rent fixed decades ago. The Court further observed that it is unfortunate that after the decision in Raghunandan Saran's case, the legislature has not filled up the vacuum created in the law.

This position was reaffirmed in Santosh Vaid v. Uttam Chand 2012:DHC:1060-DB, wherein claims for market rent were again rejected on the ground that the statutory bar under Section 50 continued to apply and that the contractual rent could only be increased by 10% every three years under Section 6A of the DRC Act.

However, a different approach has emerged more recently in Atma Ram Builders Pvt. Ltd. v. Embassy Restaurant 2025:DHC:11746-DB. In it the Court expressly recognised that the striking down of Sections 4, 6 and 9 of the DRC Act has resulted in a statutory vacuum. It held that the bar under Section 50 of the DRC Act would not be attracted in circumstances where the Act provides no effective remedy. It was further held that the question whether a landlord is entitled to market rent, or only to enhancement under Section 6A, requires adjudication in civil proceedings. The judgement marked a departure from the earlier decisions in Model Press & Santosh Vaid.

The Kerala Experience

The situation in Delhi could be compared and contrasted with the development of law on this issue in Kerala. In Issac Ninan v. State of Kerala 1995 (2) KLT 848, in a landmark judgement and for the first time in India, provisions relating to fair rent fixation under the Kerala Buildings (Lease and Rent Control) Act, 1965 were struck down by the Kerala High Court as unconstitutional. However, unlike Delhi, civil courts in Kerala subsequently entertained suits for determination of market rent and sometimes granted relief to property owners. This approach was later refined in Edger Ferus v. Abraham Ittycheria 2004 (1) KLT 767, wherein the Kerala High Court held that the power of rent control courts to fix fair/market rent under Section 5(1) of the Kerala Rent Act could be severed and restored.

The Rent Control Courts in Kerala can now fix a fair rent/market rent, with periodic increases, using criteria the courts have developed and not under the old fixed statutory formula that was struck down in Issac Ninan.

Needed: A reference to a three-judge bench

The position in Delhi continues to present a doctrinal difficulty. While Raghunandan Saran Ashok Saran recognised the right of property owners to receive a reasonable return, subsequent decisions have effectively denied an enforceable remedy. This runs contrary to the legal principle Ubi jus ibi remedium – where there is a right, there is a remedy. Without an enforceable remedy, a legal right becomes illusory. This situation continuing for almost quarter of a century violates Articles 14, 19(1)(g), and 21 of the Constitution of India.

Therefore, it is incumbent upon the Delhi High Court to remedy the situation. At present, there exist multiple conflicting judgments of coordinate Benches of the Delhi High Court, all of equal precedential value. This has led to significant uncertainty in litigation. Similarly placed landlords may receive divergent outcomes depending on the bench and the precedents relied upon.

Judicial discipline requires that the issue be authoritatively settled. Where coordinate Benches have taken irreconcilable views on the same statutory provisions, a reference to a Larger Bench of 3 judges or more is the appropriate course. An authoritative pronouncement would clarify the scope of Section 50 of the DRC Act, determine the availability of civil remedies, and address the consequences of the statutory vacuum created by the striking down of rent-fixation provisions.

In the absence of legislative intervention, an early reference to a Larger Bench of the Delhi High Court would help restore doctrinal clarity, reduce avoidable litigation, and bring much-needed certainty to landlord-tenant disputes in Delhi.

Author is a Lawyer. Views are personal.