The Delhi High Court has ruled that a civil suit filed solely for the recovery of market rent, without seeking eviction, is maintainable and is not barred by Section 50 of the Delhi Rent Control Act, 1958 (DRC Act). The Division Bench, comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar, set aside a Single Judge’s order that had rejected a plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC).
The Court observed that following the striking down of Sections 4, 6, and 9 of the DRC Act, a “statutory vacuum” has arisen regarding the fixation of standard rent, and the Civil Court’s jurisdiction to adjudicate claims for market rent remains plenary where the Act provides no remedy.
Background of the Case
The appeal, Atma Ram Builders Pvt Ltd v. Embassy Restaurant & Anr, arose from a suit (CS(OS) No. 1971/2006) filed by the Appellant (Landlord) claiming to be the owner of a property situated at D Block, Connaught Place, New Delhi. The premises, comprising the ground and mezzanine floors, were rented to the Respondent (Embassy Restaurant) in 1947. The last agreed monthly rent was approximately Rs. 312.69.
The Appellant filed the suit seeking recovery of rent at the market rate of Rs. 10 lakhs per month, arguing that Sections 4, 6, and 9 of the DRC Act—which governed standard rent—had been declared unconstitutional by the Delhi High Court in Raghunandan Saran Ashok Saran (HUF) v. Union of India (2002).
On March 16, 2012, a Single Judge rejected the plaint under Order VII Rule 11(d) of the CPC. The Single Judge held that the increase of rent was governed by Section 6A of the DRC Act, and the matter fell within the exclusive jurisdiction of the Rent Controller under Section 50 of the Act.
Contentions of the Parties
Senior Advocate Mr. Ramesh Singh, appearing for the Appellant, argued that the bar under Order VII Rule 11 CPC applies only if the suit is barred by law on a plain reading of the averments. He contended that since Sections 4, 6, and 9 were struck down, there is no statutory bar to determining and recovering reasonable rent. He further argued that Section 6A of the DRC Act deals only with the revision of “agreed rent,” which is distinct from determining reasonable rent.
Conversely, the Counsel for the Respondents argued that the suit was barred by Section 50 of the DRC Act, asserting that the determination of rent lies within the exclusive jurisdiction of the Rent Controller. It was submitted that while provisions regarding standard rent were struck down, Section 6A regarding revision of rent remains in the statute.
Court’s Analysis and Observations
The Division Bench examined the statutory scheme and the impact of the Raghunandan Saran judgment. The Court noted that Section 2(k) of the DRC Act defines “standard rent” with reference to Section 6, which has been struck down. Furthermore, Section 9, which empowered the Rent Controller to fix standard rent, has also been removed from the statute book.
Addressing this legal landscape, the Court observed:
“Consequently, a statutory vacuum has arisen, leaving landlords in a state of uncertainty as to the appropriate forum for instituting proceedings, particularly in view of the fact that Section 9 of the DRC Act has also been struck down.”
The Bench pointed out that Section 6A envisages a 10% increase in rent every three years. However, in the absence of a mechanism to compute or fix rent after Section 9 was struck down, the Act does not provide a process for determining enhanced rent beyond the specific provisions of Section 6A.
Regarding the jurisdiction of the Civil Court, the Bench relied on the Supreme Court’s decision in Dhulabhai and Ors. v. The State of Madhya Pradesh and Anr, which held that the Civil Court’s jurisdiction is excluded only if the special tribunal has the power to do what the Civil Court would normally do.
The Court held that the relief sought by the Plaintiff—recovery of market rent—does not fall within the Rent Controller’s jurisdiction. The Bench stated:
“A perusal of the prayers in the suit makes it abundantly clear that the Plaintiff has not sought eviction of the tenant. The relief claimed in these two suits is confined to the recovery of market rent, which does not fall within the jurisdiction of the Rent Controller appointed under the DRC Act.”
The Court further clarified that the question of whether the Plaintiff is entitled to market rent or merely an enhanced rent under Section 6A is a matter for trial:
“Whether the Plaintiff is entitled to market rent or only to an enhanced rent in terms of Section 6A of the DRC Act is a matter that can be determined only upon adjudication after trial. As already noted, in these circumstances, the bar under Section 50 of the DRC Act is not attracted.”
Decision
The High Court allowed the appeal and set aside the impugned judgment dated March 16, 2012. The suit, CS(OS) No. 1971/2006, was restored to its original number. The parties have been directed to appear before the Single Judge (Roster Bench) on January 15, 2026.
Case Details:
Case Title: Atma Ram Builders Pvt Ltd v. Embassy Restaurant & Anr
Case No: RFA(OS) 53/2012
Coram: Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar
