The Model Tenancy Law has been prepared by the Ministry of Housing and Urban Affairs with an objective to balance the interests and rights of the landlords and tenants. Chapter VI of the Model Tenancy Law deals with the Rent Authorities, their power and procedure for appeals and Chapter VII of the Model Tenancy Law deals with Rent Court, Rent Tribunal, procedure to be followed in rent court and rent tribunal, powers of the rent court and rent tribunal, procedure for appeal to the rent tribunal.
While the Model Tenancy Law has been published by the Ministry of Housing and Urban Affairs, it is currently a model/ template for States to adopt. To understand the proposed change in the dispute resolution mechanism for disputes related to payment of rent and tenancy, it is important to understand the current provisions and judgements in this regard.
State Specific Laws
Since the collection of rent is a part of the State List under the Constitution of India, there are state specific laws in relation to collection of rent and tenancy. Such legislations also provide an exclusive jurisdiction to rent courts to adjudge the disputes arising out of the rent control and tenancy laws. The jurisdiction of the rent courts under the state specific laws are summarized hereinbelow:
- Under the Maharashtra Rent Control Act, 1999 an act relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions and also to control the charges for licence of premises, etc. Section 33 of the aforesaid act provides exclusive jurisdiction to the Courts to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession. It further provides that no other court shall have jurisdiction to entertain any such suit, proceeding, or application or to deal with such claim or question.
- Under the Delhi Rent Act, 1995, Section 44 of the act provides the rent authority similar powers as to a civil court. It further provides that the proceedings have to be concluded within six months of the application being filed. Section 57 of the aforesaid act provides for jurisdiction, powers and authority of rent tribunal.
- Under the Gujarat Rents, Hotel and Lodging House Rates Control Act, 1947 an act law relating to the control of rents and repairs of certain premises of rates of hotels and lodging houses and of evictions. Section 28 of the aforesaid act provides exclusive jurisdiction to the courts to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of the act applies.
- Similarly, the Rajasthan Rent Control Act, 2001, Section 11 of the act provides that if any tenant is dispossessed by landlord from the rented premises without his/ her consent otherwise than by due process of the law, he/ she may file a petition before the Rent Tribunal. Section 18 of the act further provides that the Rent Tribunal shall have jurisdiction and no civil court shall have jurisdiction to hear and decide the petitions relating to disputes between landlord and tenant filed under the provisions of the aforesaid act.
- Under the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, the District Magistrate has the power to decide disputes related to determination of standard rent and revision of rent. ‘Prescribed authority’ under the act refers to a Civil Judicial Officer or Judicial Magistrate authorised by the District Judge to exercise, perform and discharge all or any of the powers, functions and duties of the prescribed authority under the aforesaid act.
- Whereas, under the Karnataka Rent Control Act, 2001, Section 44 of the act provides for court to promote the parties to go for alternative dispute resolution process. It promotes settlement of disputes before the respondent enters or is permitted to enter defence against the application, at any time before the evidence is recorded in the case, and endeavors to bring about a negotiated settlement of the dispute between the parties. Section 50 of the aforesaid act provides that no Civil Court shall entertain any suit or proceeding in so far as it relates to the fixation of standard rent in relation to any premises to which the aforesaid act applies.
Therefore, the general trend of the rent control and tenancy laws of the aforesaid states can be said to have exclusive jurisdiction of rent courts, rent tribunals etc. The main deadlock between the parties is with respect to recovery of possession and rent. States such as Gujarat and Maharashtra exclusively provide for mechanism for resolution of such disputes in courts. Mostly, all legislations have ousted the jurisdiction of civil courts in matter relating to disputes under concerned act.
The existing law and absence of uniformity is also one of the reasons the Model Tenancy Law was published by the Ministry of Housing and Urban Affair.
Dispute Resolution under the Model Tenancy Law
As mentioned above, Chapter VI of the Model Tenancy Law deals with appointment of officer with previous approval of the state/ union territory government. Section 31 of the Model Tenancy Law provides that the Rent Authority (established under the Model Tenancy Law) with respect to any proceedings initiated under a particular clause of the Model Tenancy Law shall have all the powers as are vested in a Rent Court.
Section 32 of the Model Tenancy Law provides that any person aggrieved by the order of the Rent Authority may prefer an appeal to the Rent Court (established under the Model Tenancy Law) having territorial jurisdiction.
Chapter VII of the Model Tenancy Law deals with appointment of officers to the Rent Court. Section 34 provides for appointment of district judge or additional district judge as rent tribunal in each district.
Section 35 of the Model Tenancy Law sets out the procedure to be followed in the rent court and the rent tribunal. The provision exclusively provides that the provisions of the Code of Civil Procedure 1908 shall not apply to rent courts and rent tribunals except for the provisions of the Code of Civil Procedure 1908 regarding service of summons for service of notice by the Rent Court or Rent Tribunal. Section 36 provides that the rent court and rent tribunal shall have the same powers as vested in a civil court under the Code of Civil Procedure, 1908 for the following purposes:
- summoning and enforcing the attendance of any person and examining him on oath;
- requiring the discovery and production of documents;
- issuing commissions for examination of the witnesses or documents;
- issuing commission for local investigation;
- receiving evidence on affidavits;
- dismissing an application or appeal for default or deciding it exparte;
- setting aside any order of dismissal of any application or appeal for default or any other order passed by it ex-parte;
- execution of its orders and decisions under this Act without reference to any civil court;
- reviewing its orders and decisions;
- revision of orders and decisions of Rent Authority and Rent Court and
- any other matter which may be prescribed
Section 37 further provides for the procedure for appeal to rent tribunal.
Hence the Rent Authority, Rent Courts and Rent Tribunal have been empowered with certain rights to adjudge disputes arising out of the Model Tenancy Law. If adopted by the State Government, it will ensure that the dispute resolution mechanism across the states in India are uniform.
Are Rent or Tenancy Disputes arbitrable?
The question whether alternative dispute mechanism can be used to resolve dispute related to rent or tenancy has come up in discussions with the recent judgement passed by the Supreme Court in the case of Vidya Drolia vs. Durga Trading Corporation. In case wherein the arbitration clause of a tenancy agreement was invoked to seek relief for obtaining the possession of the property, it was held by the Calcutta High Court, relying on the case of Himangni Enterprises v. Kamaljeet Singh Ahluwalia that the disputes under the Transfer of Property Act, 1882 are not arbitrable.
The apex court in this case held the following:
“Landlord-tenant disputes governed by the Transfer of Property Act are arbitrable as they are not actions in rem but pertain to subordinate rights in personam that arise from rights in rem. Such actions normally would not affect third-party rights or have erga omnes affect or require centralized adjudication. An award passed deciding landlord‑tenant disputes can be executed and enforced like a decree of the civil court. Landlord-tenant disputes do not relate to inalienable and sovereign functions of the State.”
The apex court further overruled the ratio laid down in Himangni Enterprises v. Kamaljeet Singh Ahluwalia and held:
“landlord-tenant disputes are arbitrable as the Transfer of Property Act does not forbid or foreclose arbitration. However, landlord-tenant disputes covered and governed by rent control legislation would not be arbitrable when specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations. Such rights and obligations can only be adjudicated and enforced by the specified court/forum, and not through arbitration.”
Analysis of the aforesaid judgement indicates that matter not specifically covered by the rent control legislation can be considered as arbitrable. While the aforesaid judgement has been passed, the dissenting opinion held that whether a subject matter can or cannot be arbitrated should necessarily be dealt on a case-to-case basis, rather than a having a bold exposition that certain subject matters are incapable of arbitration.
 AIR 2019 SC 3498.
 (2017) 10 SCC 706.
 (2017) 10 SCC 706.