Allahabad High Court strikes down key provisions of UP tenancy law

The Allahabad High Court recently struck down key provisions of the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021, holding that they were repugnant to existing central laws and lacked the required Presidential assent [Inder Bhushan Sawhney v Kanchan Kumari Jain (Dead) and 2 Other]..A Division Bench of Justice Saumitra Dayal Singh and Justice Swarupama Chaturvedi declared Sections 8, 9, 10, 38 and 42 of the Act ultra vires.The Court held that Sections 8, 9 and 10 – which pertain to payment of rent and its revision - were repugnant to the Transfer of Property Act, 1882.“As to the rent payable, Section 8 allows that revision of the same in terms of Section 9 and for its determination in terms of Section 10. First, revision may arise in terms of the tenancy agreement as may also the case under TPA, but then provisions exist under the Impugned Act to provide for upward revision of the rent at specified rates. Also, Section 10 provides for determination of revised rent in the case of the dispute between the landlord and the tenant i.e. lessor and lessee that is completely in conflict with the provisions of TPA,” the Bench observed..It further held that Sections 38 and 42, insofar as they sought to override the procedure under the Provincial Small Causes Court Act Provincial SCC Act) and the UP Civil Laws (Amendment) Act, could not operate without prior Presidential assent.“On the procedural aspects, the Impugned Act contains a complete provision with respect to resolution of disputes by the Rent Authority. Read with Section 38 and 42 of the Impugned Act, a special forum has been created contrary to the procedure prescribed under the SCC Act read with the Civil Laws Act. It also contemplates negotiable disputes and creates a Rent Tribunal, as well. That too creates a clear repugnance with the SCC Act read with the Civil Laws Act,” the Court said..The Court passed the judgment on a batch of petitions challenging the validity of the 2021 Act, including provisions dealing with rent revision and determination by rent authorities, as well as eviction proceedings.In the judgment delivered on August 21, the Court ruled that the State legislature had not obtained Presidential assent under Article 254(2) to validate the 2021 State law.Such assent was required since the UP law dealt with a subject in the concurrent list (list of subjects on which both the State and Centre can make laws, provided the State laws do not conflict with Central laws) of Schedule VII of the Constitution of India, on which subject the Parliament had already enacted a law. .The Court found that the provisions in the UP law pertaining to rent and increase of rent under Chapter III appeared to create very different rights and liabilities than those created under the Transfer of Property Act (Central law). The Transfer of Property Act contains no provision allowing a lessor to enhance rent outside the terms agreed between the parties, the Court noted. However, it found that the State law allowed eviction on grounds over and above those agreed upon by the parties.“To that extent, the Impugned Act does alter the general law. Even though parties may not have agreed while executing a lease deed, yet, by own force of law created by the Impugned Act, eviction proceedings may arise for varied reasons whether for non-payment of timely rent or to seek repair, re-construction etc. or for re-building after change of land use or failure to vacate, after issuance of notice in that regard or violations made without permission of the landlord or upon substantially removing effects or for self occupation,” the Court said. The Court further noted that legal heirs of a deceased landlord have also been given statutory rights to seek eviction of a sitting tenant on the ground of personal need. If the tenant fails to vacate, the UP law allows the impostition of a penal rent clause, the Court found.The Court opined that these provisions conflicted with the rights and liabilities of lessees and lessors under Chapter V of the Transfer of Property Act. .Consequently, the Court ruled that Sections 8, 9 and 10 and provisions providing for eviction by order of the rent authority are repugnant to the substantive law, namely the Transfer of Property Act. “Also, Sections 38 and 42 of the Impugned Act, to the extent they seek to override the established procedure under the SCC Act read with Civil Laws Act, without prior Presidential Assent, are declared ultra vires the procedural law i.e. SCC Act and the Civil Laws Act,” it added. The Court, however, protected proceedings already concluded under the 2021 Act, where the validity of the provisions had not been challenged. Rent agreements and rent revisions already made under the Act were also saved..Senior Advocate Shashi Nandan argued for the petitioners. Additional Advocate General Rahul Agarwal represented the State.Senior Advocate Ashish Kumar Singh and Advocate Sudeep Harkauli represented other respondents. .[Read Judgment]