Landlords can increase the rent under the provisions of the existing rental laws only if the rent agreement is registered, the Karnataka High Court (HC) has ruled. In case the tenancy period is more than 11 months, and the rent agreement is not registered, the legal provisions of rent enhancement don’t apply, the HC elaborated. Such lease agreement can only be considered for collateral purposes, it added.
The HC made the observation while passing its order on an appeal filed by public lender Punjab National Bank. It dismissed an original plea filed by Bangalore-based Srinivasa Enterprises.
Case study
The company had let out its property to Nedungadi Bank, which later was merged with PNB, for Rs 13,574 monthly rent. The tenant also submitted 81,444 security deposit. In 1998, the tenancy was renewed for another 5 years with a monthly rent of Rs 23,414. The rent agreement also stated that tenancy could be increased by 5 years with 20% hike in rent every 3 years.
In 2006, Srinivasa Enterprises filed a civil suit to recover rent in accordance with the lease agreement. PNB argued that the claim was barred by limitation because the rent agreement was neither registered nor sufficiently stamped.
In its order the HC said that the rent agreement in question must have been registered under Section 17(1) of the Registration Act, 1908, because the tenancy period was more than 11 months.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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