High Court Cannot Fix Rent Without Evidence Under Article 227, Supreme Court Holds

A bench of Justices Sanjay Karol and Kotiswar Singh sets aside a High Court rent enhancement order made without material on record, remanding the matter to the Rent Control Officer, Bahraich.

The Supreme Court has set aside a High Court order that enhanced the rent payable by the Trade Tax Department, Government of Uttar Pradesh, on a building it has occupied since 1966 — because the enhancement rested on nothing more than a statement made by the landlords' counsel in court. The Division Bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh, deciding Civil Appeals arising from Special Leave Petition (Civil) Nos. 38495–38496 of 2025, held that while Article 227 supervisory jurisdiction is not entirely barred in rent control matters, it cannot be used to substitute a finding of fact that was never made on the basis of actual evidence. The Court also resolved a statutory question that had been pending since the notice stage: the deletion of clauses (ii) and (iv) from the Explanation to Section 21(1) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 does not extinguish the landlord's right to seek rent enhancement under the proviso to Section 21(8) of that Act.

A Tenancy Since 1966 and a Rent Dispute That Reached the Supreme Court

The forebears of the respondent-landlords let out the building in question to the Trade Tax Department, Government of Uttar Pradesh in 1966. The property has a total plot area of 5,866 sq. ft. and a covered area of 3,645.06 sq. ft. After attempts to have the property vacated in the 1990s, the landlords filed an application for enhancement of rent. The Rent Control Authority, considering the prime and central location of the property and the fact that the same Government authority was paying a much higher rate for a smaller adjacent building, fixed rent at Rs. 4 per sq. ft., arriving at Rs. 14,400 per month.

The landlords appealed. The Additional District Judge, Bahraich, found that the Rent Control Authority had not recorded any finding on the date from which the enhancement would apply, nor had it addressed the question of enhancement at five-year intervals as contemplated by the statute. The appellate court remanded the matter to the Rent Control Authority for a fresh order within six months, directing it to address those gaps.

The landlords then challenged the remand order before the High Court. The High Court, in its order dated 5 May 2025, accepted the landlords' contention that since the rent payable on an adjacent premises also occupied by the appellant-tenants was Rs. 14 per sq. ft., the landlords would be satisfied at that rate. The High Court modified the determination of the court below accordingly and directed that the enhanced rent would be payable from the date of filing of the application under Section 21(8) of the Act. The High Court reasoned that remanding the matter once again would cause further delay. The appellant-tenants filed a Special Appeal under Chapter VIII Rule V of the Allahabad High Court Rules 1952, which the Division Bench dismissed as non-maintainable. The State of U.P. and the tenant-department then approached the Supreme Court.

The Statutory Question: Does Deletion of Clauses (ii) and (iv) Kill the Rent Enhancement Proviso?

When the Supreme Court issued notice on 19 December 2025, it framed the question precisely: whether, with the omission of clauses (ii) and (iv) from the Explanation to Section 21(1) of the 1972 Act, the proviso contained in Section 21(8) would remain operative and continue to govern premises let out to the Government.

The two deleted clauses had created specific exceptions under which even a Government tenant could be asked to vacate: clause (ii) applied where the landlord, having worked away from the city, returned and needed the building for residential occupation; clause (iv) applied where the tenanted building was part of a larger building of which the landlord occupied the remainder. Both clauses were omitted by Section 14(i)(c)(2) of UP Act No. 28 of 1976.

The Court explained the structure of Section 21(8) carefully. The sub-section provides that the bona fide need ground under Section 21(1)(a) does not apply to buildings let out to the State Government, local authorities, public sector corporations, or recognised educational institutions — unless the landlord falls within clause (ii) or clause (iv) of the Explanation. Once those two clauses were deleted, the protection became absolute: such tenants cannot be evicted on bona fide need grounds at all. To balance this heavily tenant-favourable position, the proviso to Section 21(8) gave the landlord a separate remedy — an application to the District Magistrate for enhancement of rent to one-twelfth of ten per cent of the market value of the building, with a further enhancement permissible only after five years from the last enhancement order.

The Court held that sub-sections 7 and 8 of Section 21 were introduced by the very same 1976 amendment that deleted clauses (ii) and (iv). The reason for this legislative design, the Court observed, was not entirely clear. But the conclusion was firm: the proviso to Section 21(8) is the only recourse available to the landlord, and the deletion of clauses (ii) and (iv) does not affect its operationality.

The Court rejected the State's argument that the deletion of those clauses should be read as also disabling the proviso. Accepting that reading, the Court said, would mean “virtually making the tenant into the landlord.” No bona fide requirement, no enhancement of rent, and no way for the landlord to reclaim the property either physically or financially — that outcome, the Court held, would defeat the very purpose of the landlord-tenant relationship. No provision can be read so restrictively merely because the tenant on the other side of the equation happens to be the Government itself.

The Article 227 Question: Supervisory Power in Rent Matters

The second question was whether the High Court could, under Article 227 of the Constitution, have itself ordered the enhancement of rent rather than remanding the matter.

The Court surveyed the principles governing Article 227 jurisdiction as drawn from a series of its earlier decisions, including Ouseph Mathai v. M. Abdul Khadir, (2002) 1 SCC 319; Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675; Waryam Singh v. Amarnath, AIR 1954 SC 215; L. Chandra Kumar v. Union of India, (1997) 3 SCC 261; and Shalini Shyam Shetty, (2010) 8 SCC 329, among others. The principles the Court distilled are worth setting out:

High Courts exercise superintendence over all courts and tribunals within their jurisdiction, a power rooted in the Constitution and recognised as part of the basic structure. Its origins trace to the Government of India Act 1915; under the Government of India Act 1935 it was limited to cases where appeal or revision was unavailable, but the Constitution removed that limitation. The power is not a power of appeal. It is exercised to ensure that courts and tribunals function within the confines of their governing statutes. The overarching principle is not the correctness of a particular decision but whether the decision amounts to abuse of power, dereliction of duty, or grave injustice. Three recognised scenarios justify its exercise: where the court or tribunal has exercised power it does not possess; where it has failed to exercise power it does have; and where the manner of exercise has amounted to a transgression of jurisdiction. The power is discretionary and does not confer a right on any litigant to have it exercised. Statutory limitations on revision do not affect this constitutional power. With specific reference to rent, routine exercise of Article 227 jurisdiction is unwarranted because rent control legislation is a special law providing its own mechanism.

Applying these principles, the Court held that Article 227 interference in rent matters is not completely barred but must be exercised judiciously and sparingly. In this case, the High Court had enhanced the rent to Rs. 14 per sq. ft. on the basis that the adjacent premises occupied by the same tenant was rented at that rate. But there was no material on record to establish this. It was a bare statement by the respondent-landlords' counsel. The Court recorded that there was no statement on behalf of the appellant-tenants either opposing or accepting this figure. The High Court had substituted its own determination for that of the Rent Control Authority without any evidentiary foundation. That, the Court held, was impermissible.

Order

The Supreme Court allowed the appeals. The impugned High Court judgment was set aside. The Court held, first, that an application for enhancement of rent under the proviso to Section 21(8) of the 1972 Act is permissible and maintainable notwithstanding the deletion of clauses (ii) and (iv). Second, that the High Court can in exceptional circumstances exercise Article 227 jurisdiction in rent control matters, but on the facts of this case, in the absence of material on record, the impugned order could not stand.

The matter was remanded to the Rent Control Officer, Bahraich, to decide the question of rent payable by the appellant-tenants afresh, addressing also the particulars identified by the Appellate Authority in its order dated 28 March 2016. The Court acknowledged that the learned Single Judge's hesitation to remand was possibly well-founded given the time such proceedings take, and accordingly directed that the Rent Control Officer shall decide the matter within four months from the date of the order. The rent as determined shall be applicable from the date of institution of the original application in 2008.

A copy of the order was directed to be communicated through the Registrar General, High Court of Judicature at Allahabad to the Rent Control Officer, Bahraich. Parties were directed to bear their own costs.