If Building Has Potential To Fetch Higher Revenue Post Reconstruction, Proving 'Dilapidated Condition' For Evicting Tenant Not Necessary: HP High Court

The Himachal Pradesh High Court on Tuesday ruled that when a building is situated in a commercial location having possible potential to fetch higher income after reconstruction/rebuilding, tenants may be evicted for such bonafide requirement of the landlord and the requirement of demonstrating the dilapidated condition of the building for enforcing eviction is not necessary in such cases.

Justice Vivek Singh Thakur made these observations while hearing a Civil Revision under Section 24(5) of Himachal Pradesh Urban Rent Control Act, 1987 against the judgment passed by the Appellate Authority, Chamba Division, Chamba, H.P., in Rent Appeal No.1 of 2019.

In the instant matter a Rent Petition had been filed for eviction of tenant on the ground of arrears of rent, bonafide requirement, rebuilding purpose and that tenant had ceased to occupy the building for last 12 months preceding to filing of the petition.

The Rent Controller allowed the eviction petition on the grounds that tenant was in arrears of rent to the tune of `37,106/- and after reconstruction of building, tenant shall have right to re-entry to the premises in an area equivalent to the original premises being occupied by him as a tenant.

Subsequently both landlords and tenant had assailed the order but their appeal was dismissed by the Appellate authority in terms of the impugned judgment.

Counsel for the Petitioner/Tenant submitted that the landlords have failed to prove that building is in dilapidated condition so as to warrant rebuilding, and for bonafide requirement and also the fact that the tenant has ceased to occupy the premises for last preceding 12 months from the date of filing of the petition and, therefore both the Courts below have committed material illegality resulting into perversity in the judgment warranting interference of this Court under revisional jurisdiction.

Contesting the revision the respondent/landlord submitted that the bonafide of the landlords is evident from the fact that they have applied for reconstruction permission/sanction of the Plan and they intend to utilize their property for more beneficial use and for which condition of the building is immaterial.

After considering the rival contentions Justice Thakur observed that landlords have right to put their property for better use and to obtain higher income and for that purpose reconstruction/rebuilding of the property is covered under bonafide requirement of the landlords and in such eventuality location of the property, possible potential for utilization of the property and capacity of landlords to rebuild the premises and financial resources etc. may be relevant. However, in case other parameters required to prove bonafide requirement of the landlords are established on record then dilapidated condition of the building may not be necessary to proved, the bench underscored.

Highlighting the fact that when the building is situated in a commercial location having possible potential to fetch higher income after reconstruction/rebuilding and to yield more revenue by its commercial or other use, tenants may be evicted for such bonafide requirement of the landlord.

Pointing out to the fact that the premises in question is situated in commercial locality having Hotels in its surrounding which have been constructed with modern designs and amenities and there is definite possibility of fetching more profit by the owner after reconstruction/rebuilding of the premises, the bench maintained that the the order of rent controller devoid of any perversity and the mandatory "bonafide usage" by the landlord stands fulfilled.

Deliberating on the alternate prayer of the petitioner/tenant with respect to his right to re-entry the bench observed that right to re-entry of the tenant has been granted in the Act itself, but the said right is not to be an absolute one, as the Courts have to determine the same keeping in view the given facts and circumstances of the case including the purpose for which reconstruction/rebuilding of the premises has been proposed and permitted, and also keeping in view the bonafide requirement of the landlord.

In view of the aforesaid discussion the bench affirmed the order of the Appellate Authority, with further direction to the tenant to pay use and occupation charges @ `5000/- per month from the date of passing of eviction order by Rent Controller till the date of leaving the possession of premises in reference.

Case Title: Rattan Chand Vs Madhu Bharat Chadha & another.

Citation: 2023 LiveLaw (HP) 19

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