Maharashtra bound to frame new Act hiking rent

If the state does not want the Supreme Court to strike down the present interim Act, it should effect another small increase in rent, it was suggested at the meeting.

The ordinance has freed large commercial premises and buildings built after 1987 from rent control, regularised the pugree system and sounded a warning to landlords by announcing certain penalties.

A hike in rent however iscertain. In view of the Supreme Court’s December 19, 1997 directions to frame a “fair and reasonable law”, the state is bound to frame a new rent act — with significant amendments.

The government is also scheduled to file an affidavit in the Supreme Court on Tuesday in response to a petition filed by landlords seeking that the interim Act be struck down.

It is thus only a matter of time before the guillotine falls on Mumbai’s old tenants, a major urban votebank for the ruling alliance — one that has been left mostly undisturbed so far.

Tenants, it appears, are already bracing for a hike. While some tenant groups (those residing in large premises) are, according to advocate Haresh Ganatra, “agreeable to another five per cent hike in rent”, other groups such as the Action Committee for Protection of Tenants Rights, representing the majority of the 25 lakh-odd ordinary tenants, consider the proposal to further increase the rent a fait accompli.

Meanwhile, yesterday’s ordinance — which extended theRent Act by a year — has not found favour with either tenants or landlords.

According to B R Bhattad, executive president of the Property Owners’ Association, the government, by coming out with an ordinance, has “tried to circumvent the December 1997 Supreme Court judgment.”

“We will challenge this ordinance by adding an application to our present petition,” said Bhattad.

“Though landlords welcomed the exemption given to large commercial premises, it will benefit only a small percentage of landlords. The politicians seem to be viewing the Act only from the city point of view.”

Tenants are not resting easy either. The Juhu Vile-Parle Development (JVPD) Residents’ Association, worst hit by the provision to de-protect tenants in buildings built after 1987, is likely to appeal against the provision.

“If the provision is with retrospective effect, we will contest it in the court as JVPD residents are not allowed to be owners but have paid crores of rupees as premium in black to landlords,” saidadvocate Keerit Shah who represents the JVPD tenants.

The Action Committee for Protection of Tenants’ Rights feels the ordinance has been a “total let down.” Committee spokesperson Chandrashekhar Prabhu said that though the full implications of the ordinance will be clear only later, the government “could have easily introduced a permanent Act” instead of temporarily extending the current one.

“The government wants to divide the tenants,” said Prabhu. “Exemption of large PSUs and banks from the Act amounts to a largesse to the landlords.”