Whether rent include maintenance charges agreed to be paid by the tenant to the landlord- Case of Sewa International Faishon (Supra)

The central issue in the recent judgment passed by Supreme Court in case of Sewa International Supra was whether payment agreed to be paid by the tenant to the maintenance society towards maintenance charges could be included within the ambit of the expression 'rent'. To substantiate that maintenance charges could not be included within the ambit of the expression 'rent' arguments were made basing on the terms of the lease agreement executed between the Landlord and the tenant and interpreting the expression ‘rent’ as defined under section 105 of Transfer of Property Act and the various judgments. In the Lease Agreement , the tenant had option to pay rent either to Landlord or to the maintenance society. It was argued that maintenance charges paid to the maintenance society can be included within the ambit of expression rent. Relying on the definition of rent under section 105 of Transfer of Property Act it was argued that in order to be construed as rent, the payment must necessarily be made to the landlord and not to a third party, whereas in the instant case, the payment in respect of the maintenance services had been made to an external independent contractor, a maintenance society. However, neither before High Court nor before Supreme Court, the word ‘rent’ and ‘maintenance charges’ were interpreted from the scheme of Delhi Rent Control Act. Deemed Rent as defined under Delhi Rent control Act is nothing but standard rent with its revision as per Section 9 of the Act. The maintenance charges are specifically covered under Section 8 of the Act to fall under ‘other charges’ payable by the tenant to the landlord besides the rent. The relevant section is as follows: “8. Other charges payable- 1) A tenant shall be liable to pay to the landlord, besides the rent, the following charges, namely:- a) b) maintenance charges at the rate of ten per cent of the rent:” Since rent has been specifically defined and maintenance charges are covered under section 8 of Delhi Rent Control Act, reasoning may also be extended to contend that a tenant cannot be evicted from the tenanted premises on the ground of non-payment of rent if he has failed to pay the maintenance charge. The ground for eviction in that case can only be breach of tenancy agreement but not non-payment of “rent”. A harmonious reading of Section 3(c), 7 & 8 of Delhi Rent Control Act would lead to the inevitable conclusion that ‘other charges’ (including maintenance charges) are completely different and distinct from ‘deemed rent’. Therefore, ‘other charges’ including maintenance charges cannot be merged with ‘rent’ to become ‘deemed rent’ for the purposes of applicability of the Delhi Rent Control Act. In the various judgments referred by both the parties, the Courts have not particularly dealt with the aforesaid contentions based on the scheme of the Delhi Rent Control Act. Even in case of Sewa International, the Delhi High Court wrongly assumed that the expression “rent” is not defined under the Delhi Rent Control Act and only on the basis of definition of rent as defined under section 105 of the Transfer of Property Act, the court concluded as to what will constitute the rent. The relevant paragraph is as follows: “The expression 'rent' is not defined under the Delhi Rent Control Act. However, as to what constitutes rent could be found out from the provisions of Section 105 of the Transfer of Property Act wherein the word 'rent' is defined.” The court further observed that in Karnani Properties Ltd. (supra), the Supreme Court held that the term 'rent' is comprehensive enough to include all payments agreed by the tenant to be paid to his landlord for the use and occupation of its appurtenances but also of furnishing, electric installations and other amenities agreed between the parties to be provided by and at the cost of the land-lord. Tenant in Sewa International accepting the aforesaid concept of rent based on section 105 of T.P. Act, tried to differentiate their case before High Court as maintenance charges were not paid to the landlord but to the maintenance society. The Delhi High Court refused to accept the aforesaid arguments. The decision of the Delhi High Court in Sewa International (supra) was further challenged by way of Special lave Petition before the Hon’ble Supreme Court being Civil Appeal No.4414/2000 wherein the Apex Court held that “… we are in agreement with the High Court that keeping in view the terms of the lease deed, between the parties, the maintenance charges would form part of the rent of the premises. These maintenance charges were payable by the tenant either to the Maintenance Society or to the lessor and were in addition to the other amount specified in the agreement …”. Since a number of SLPs are pending in Supreme Court on the above issues, it is necessary to interpret the issue of inclusion or non-inclusion of maintenance charges within the ambit of rent interpreted from the scheme of Delhi Rent Control Act