The Bombay High Court recently passed a significant judgment in the case of Britannia Industries Ltd. vs. Maya Sunil Alagh, addressing a critical issue concerning the fixation of standard rent under the Maharashtra Rent Control Act, 1999 (MRC Act). The judgment, delivered by Justice Sandeep Marne on August 8, 2024, sheds light on the Court’s jurisdiction and the applicability of the MRC Act to premises let after October 1, 1987.
Britannia Industries Ltd., one of India’s largest biscuit manufacturers, challenged the fixation of standard rent for a luxurious apartment located in IL Palazzo, Malabar Hill, Mumbai. The apartment, rented in 1995, was valued by Britannia at a potential market rent of Rs. 6,00,000 per month. However, the standard rent was fixed at a mere Rs. 805, leading to a legal dispute.
Key Legal Questions Considered
The case raised several important legal questions, particularly regarding the fixation of standard rent for premises let after October 1, 1987, under the MRC Act. Britannia contended that the Court lacked jurisdiction to fix standard rent for properties rented post-1987, arguing that they should be entitled to demand market rent.
Court’s Ruling on Standard Rent
The Bombay High Court held that the Court indeed has jurisdiction under the MRC Act to fix standard rent for premises let after October 1, 1987. The Court cited Sections 7(14)(c) and 8(1)(d) of the MRC Act, which provide for the fixation of standard rent even for tenancies created after this date. The judgment emphasized that the absence of statutory guidance for such fixation does not preclude the Court from exercising its jurisdiction.
Special Considerations for the Gap Period
The Court also addressed the issue of tenancies created during the gap period between October 2, 1987, and March 30, 2000. It ruled that the standard rent for properties let during this period would be governed by the provisions of the Bombay Rent Act, which applies even after its repeal by the MRC Act.
Landlord’s Rights and Tenant Protection
The Court clarified that landlords are not entitled to demand exorbitant market rent in the absence of statutory fixation, especially for tenancies created during the gap period. The ruling also highlighted that landlords could only seek possession of the property on grounds specified under Section 16 of the MRC Act, such as default in rent payment.
The Bombay High Court’s judgment in the Britannia Industries Ltd. vs. Maya Sunil Alagh case reaffirms the Court’s role in protecting tenant rights while balancing the interests of landlords. The ruling underscores the importance of judicial oversight in determining fair rent, particularly for properties rented after October 1, 1987, under the MRC Act.
