FLAWS IN PUNJAB RENTED PREMISES ORDINANCE, 2007
CH. MUHAMMAD BASHIR
(Ex. Member Punjab Bar Council).
The said Ordinance, in relation to creation of future tenancies, has made the following Provisions:-
Section 5(1) provides that a Landlord cannot let out a premise to a tenant except by a Tenancy Agreement.
Sub-section (2) obliges a Landlord to present the Tenancy Agreement before Rent Registrar.
Sub-section (3) provides that the Rent Registrar shall enter the particulars of the tenancy in a Registrar, affix his official seal on the tenancy agreement, retain a copy thereof and return original tenancy agreement to the landlord.
Sub-section (4) provides that the entry of particulars of the tenancy shall not absolve the landlord or the Tenant of their liability to register the tenancy agreement under the law relating to registration of documents.
Sub-section (5) provides that the tenancy agreement entered in the office of a Rent Registrar or a certified copy thereof shall be a proof of the relationship of landlord and tenant.
Section 6 provides that tenancy agreement shall contain, as far as possible, the following particulars:-
(a) particulars of the landlord and the tenant;
(b) description of the premises;
(c) period of tenancy;
(d) rate of rent, rate of enhancement, due date and mode of payment of rent;
(e) particulars of the bank account of the landlord if the rent is to be paid through a bank.
(f) the purpose for which the premises is let out; and
(g) amount of advance rent, security of Pagri, if any,
Section 7 obliges a Tenant to pay rent to the Landlord in the mode and by the date mentioned in the Tenancy Agreement.
In case the date of payment is not mentioned the tenant is obliged to make payment by the 10th of the following month.
In case of mode of payment is not mentioned the rent may be paid through money order or deposit in the Bank Account of the Landlord.
As to the bringing of the existing tenancies in conformity with the above requirements of Tenancy Agreements
Section 8 provides that existing tenancies shall, as soon as possible, but not later than 2 years from the date of coming into force of the Ordinance, be brought in conformity with the Provisions of the Ordinance.
Section 9 provides that, if tenancy does not conform to the Provisions of the Ordinance, the Rent Tribunal shall not entertain an application under the Ordinance–
(a) on behalf of the Tenant, unless he deposits a fine equivalent to 5% of the annual value of the rent of the premises in the Government Treasury.
(b) On behalf of the Landlord, unless he deposits a fine equivalent to 10% of the annual value of the rent of the premises in the Government Treasury.
The said lay out of the Provisions brings out the following flaws in the Ordinance.
(1) It Lacks positivity and command.
The accumulative effect of Provisions contained in Sections 5 to 7, on the one hand, is that after the coming into force of the Ordinance no tenancy can be created except by means of Agreement, providing for the particulars specified in Section 6, which apart from being registered under the Registration Act 1908, will be entered in the office of Rent Registrar, while, on the other, it permits the tenancies, not clothed in tenancy Agreement under said Ordinance, to continue to exist or operate, by accommodating them as a basis for making of applications before Rent Tribunal, on payment of fine at the rate of 5% of annual rental value in case the application is filed by tenant, and 10%, in case Landlord files application. So this Ordinance has provided a self-defeating loophole. In this way the said law lacks the essential perquisite of positiveness and command of a good law.
(2) It does not provide a definite and certain base for determination of annual rental value for levying fine under Section 9.
In case the tenancy is oral and the applications on behalf of Tenant and Landlord are entertainable on payment of respective fines by them and the parties are not agreed on the rate of rent, then the Rent Tribunal, before deciding the application on merits, will be required to find out the actual rate of rent, after reception of evidence, to settle the amount of fine. Such a situation is sure to cause inordinate delay in the disposal of application.
(3) No mechanism has been provided to squeeze the existing tenancies into tenancy agreements in conformity with the Ordinance.
Section 8 postulates that existing tenancies are to be brought in conformity with the provisions of the Ordinance.
There may be more than one reason for not converting the existing tenancies into tenancy agreements under the Ordinance.
FIRSTLY, a dispute might arise as to what are terms of the existing tenancy. So long as a finding is not reached on this point, no question of condensing it into an agreement under the Ordinance can arise;
SECONDLY; a tenant will not find it beneficial to limit his tenancy by signing an agreement;
THIRDLY; A Landlord will not like to be exposed to burden of income and property taxes by certifying his income in the shape of agreement;
FOURTHLY; Both the parties will avoid incurring of Registration expenses.
So the existing tenancies are more likely to remain operative in future in spite of elapse of grace period of two years allowed under Section 8.
(4) No need for entry of tenancy agreements, already registered under the Registration Act 1908, with the Rent Registrar.
When a tenancy, for a period for one year or more, is registered under the Registration Act 1908, it will be sheer overlapping or duplication to require it to be entered in the office of Rent Registrar. A Registered Tenancy also carries with it presumption of genuineness and validity.