Companies Or Firms Can Invoke S.14(1)(e) Of Delhi Rent Control Act To Evict Tenant For Bonafide Use: High Court Answers Reference

A division bench of Justices Prathiba M. Singh and Anish Dayal reasoned that the core of the landlord-tenant relationship is the tenanted premises and not the party individual. It observed,

“DRC, 1958 has struck a balance while defining the terms 'Landlord' and 'Tenant'. It has not restricted the said definitions to any specific parties but has in fact expanded it…A perusal of the definition of landlord as provided under the Act would show that the same is inclusive. It is an exhaustive definition but it includes within its ambit any person:

• Who is receiving rent;

• Who is entitled to receive rent. (Such person need not be receiving rent on his own account. It could be on behalf of a trustee, a guardian or receiver for any other person who is entitled to receive rent);

• Who is receiving rent for the benefit of a trustee or guardian or receiver for any other person who is entitled to receive rent.”

Thus, the Court held that the definition of landlord is quite broad and the intention is to ensure that no one is excluded from the definition, so long as the premises is a tenanted premises and the person has some legitimate right or authority to receive rent from the tenant.

The observation was made while dealing with a reference made by Additional Rent Controller, arising out of 12 eviction petitions filed by various landlords under Section 14(1)(e) read with Section 25B of the DRC, seeking eviction of the tenants.

Since the landlords belonged to a diverse class, including body corporates, juristic entities, public trusts, etc., the tenants argued that Section 14(1)(e) cannot be invoked.

It was contended that use of the words 'he' or 'himself' in Section 14(1)(e) of the DRC, 1958 along with the words, 'bona fide by the landlord for occupation as a residence for himself' would be a controlling part of the provision. Even though it would mean to include even the female gender, it however, would not mean that a juristic entity or any other entity such as a firm, company, etc. can be included in the ambit of a landlord, the tenants argued.

The landlords on the other hand argued that the definition of landlord under Section 2(e) of the DRC, 1958 shows that it includes any person which need not be a natural person. Further, under Section 3(42) of the General Clauses Act, a person includes a company or association or body of individuals, whether incorporated or not. Thus, it was argued that a company is fully covered under the definition of landlord under the DRC, 1958.

The High Court held that masculine gender is used in the language of Section 14(1)(e) of the DRC, 1958 because of the manner in which the term 'landlord' is defined under the Act. However, on a careful reading of the same, it held, the definition of landlord provided under Section 2(e) of the Act is quite wide and takes within its ambit even an non-natural person.

It observed that an indication of inclusion of non-natural persons is clear from the following:

a) Use of the word 'person' at least three times;

b) Use of non-gender based terminology such as guardian or receiver;

c) Use of the word 'trustee' which could include non-natural persons.

“Therefore, mere use of the terminology containing masculine gender in Section 14(1)(e) of the DRC, 1958 cannot in the opinion of this Court dilute the definition of landlord as, Section 14(1)(e) of the Act uses the expression 'required bona fide by the landlord'. This expression clarifies that the provision focuses on the landlord's genuine need for property and not on the status of the landlords i.e., whether they are male or female or juristic entities or other non-natural persons such as companies, firms, Trusts, authorities etc., The term 'landlord' hence encompasses all landlords. Thus, landlords who require premises for their bona fide requirements are all fully covered under Section 14(1)(e) of the DRC, 1958.”

It thus answered the questions referred to it in the following manner:

(i) Where the landlord is a company or other body corporate or any local authority or any public institution and the premises are required for the use of employees of such landlord, whether such landlord has a choice, whether to invoke Section 14(1)(e) or O.REF. 1/2025 & connected Page 56 of 58 Section 22 of the Act.

Answer - Yes, the landlord has a choice to invoke both Sections 14(1)(e) and/or Section 22 of the DRC, 1958 as may be applicable in the facts.

(ii) Whether the Chairman, Directors, Trustees, members of the governing body and office bearers, of a company or other body corporate or any local authority or any public institution qualify as 'employees, within the meaning of Section 22 of the Act and if not whether such landlord for requirement of such persons is entitled to invoke Section 14(1)(e) of the Act.

Answer - The question whether such persons would qualify as employees or not, would depend upon the terms of employment between the employer and the employee as also on the facts of each case. The landlord is free to avail of remedies either under Section 14(1)(e) or Section 22 of the DRC, 1958 as may be applicable. Each case has to be decided on its own facts as it is possible that in some cases, the employer-employee relationship may or may not exist, depending upon the terms of employment.

(iii) Whether the tenant of such a landlord can be construed as having acted in contravention of the terms under which he was authorized to occupy the premises or be construed as in unauthorized occupation of the premises, within the meaning of Section 22(b) and (c) of the Act, on continuing in occupation after determination of his tenancy under Section 106 of the Transfer of property Act, 1882.

Answer - The question as to whether upon termination of a tenancy under Section 106 of the Transfer of Property Act, 1882 a tenant is under unauthorized occupation or not, or in contravention of the terms or not, would have to be determined on the basis of the contract or agreement between the parties. The question as to what the terms of the tenancy, whether there is a violation, whether there is termination, whether the termination is lawful and whether tenant is in unauthorized occupation, would have to be determined on the facts.

(iv) Whether the commercial or industrial or other requirement of a landlord, which / who is a company or other body corporate or any local authority or any public institution, of premises, by allowing its employees to work or carry on its activities therein is within the ambit of Section 22 of the Act and if not, whether for such requirement such a landlord can invoke Section 14(1)(e) of the Act.

Answer - The purpose of the tenancy i.e., whether the premises is let for residential or non-residential purposes, would no longer be relevant under Section 14(1)(e) of the DRC, 1958 in view of the judgment, Satyawati Sharma (Dead) by LRs v. Union of India & Anr. (supra). The said judgment would have equal applicability even in the case of Section 22 of the DRC, 1958.

(v) Whether a public charitable trust carrying on public activities qualifies as a public institution.

Answer – No to the extent that a public charitable trust carrying on public activities which is set up by private persons would not be covered under Section 22 of the DRC, 1958.

(vi) Whether a deity in a temple owning properties or a trust or a society managing a place of worship qualifies as a public institution.

Answer - Yes. So long as the trust or the society managing the place of worship is not a private trust. Insofar as a deity is concerned, if the society or trust or any other entity managing the temple is controlled by the Government, State or local authority, directly or indirectly, Section 22 of the DRC, 1958 would apply. However, if the same is controlled by a private body/private trust, it would not fall under the ambit of Section 22 of the DRC, 1958.

(vii) Whether the choice if any with such a landlord, to invoke either Section 14(1)(e) or Section 22 of the Act, is to the detriment of the tenant and if so to what effect.”

Answer - The remedies provided under the Statute to a landlord or the protection extended to tenants under the Statute, have to be presumed to be in balance with each other. So long as the remedies are availed by the landlord in terms of the provisions of the DRC, 1958 the same cannot be construed as being to the detriment of the tenant.

Appearance: Mr. Gaurav Bhardwaj and Ms. Garima Bhardwaj, Advs. for Petitioner; Mr. Rajiv Dewan and Mr. Raunak Gupta, Advs. (M:9811673338) Mr. Arvind Nigam, Sr. Adv. (Amicus Curiae) with Mr. Agnish Aditya and Mr. Raj Surana, Advs. for Respondents

Case title: KS Bhandari v. M/S International Security Printers Pvt Ltd. (and batch)

Citation: 2025 LiveLaw (Del) 590

Case no.: O.REF. 1/2025 (and batch)

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