Citizens' Issues
3 Kinds of 'Tenants' and their rights

What are the rights of statutory tenant, lessee and licensee?

 

Letting out premises is a sensitive issue. Both landlords and tenants turn hawkish in any discussion on this. The battle of owners versus occupiers would turn less hostile if each understood their limits, claiming only that which is rightfully theirs. There can be roughly three kinds of occupation – statutory tenant, lessee and licensee. Described below are the rights of each of them.

1. Statutory Tenant: A tenant is a protected species under the Maharashtra Rent Control Act, 1999 and is often aptly referred to as a statutory tenant. He can be evicted only on the limited grounds mentioned in the said Act. The most common ground being “the premises are reasonably and bona fide required by the landlord for occupation by himself or by any person for whose benefit the premises is held.” It is justifiable that ‘destruction of the premises by the tenant’ gives the landlord the right to seek repossession of his property and end the tenancy. Change of use, as well as/or non-use of the premises by the tenant for a continuous period of six months, is yet another ground for eviction under section 16 of the Rent Control Act.

A statutory tenant pays a nominal rent. Upon his death, any relative residing with him at the time of his demise steps into the former’s shoes by law. No testamentary bequest can be made by the tenant in respect of his tenancy rights nor can he transfer, mortgage, sub-let, give on license basis, or otherwise part with his tenancy rights. A tenancy is a creation of the statute and lives as well as falls as by the provisions thereof.  Any transgression may cost a tenant dear.

2. Lessee: In the hierarchy of possessory rights, the position of the lessee is far superior. Here, the Transfer of Property Act comes into play. It is a transfer of a right to enjoy property by the lessor/owner in favour of the lessee, so much so that, unless there is a contract or a local usage to the contrary, a lessee can assign, sub-lease, mortgage, or part with his interest in the property. A lessee does not live under the fear that, on the grounds of bona fide requirements his lessor will have him evicted from the premises. He breathes freer air. It is not unusual to come across leases for a term of 100 years or even in perpetuity. There is precious little that an owner can do once he has leased out his property.
 
3. Licensee: A licensee finds a place for himself at the bottom of the pyramid. He has no interest whatsoever in the premises. As suggested by the term ‘license’, a licensee occupies premises at the pleasure of the licensor/owner.

In wonderful legalese, section 52 of the Indian Easement Act, 1882 defines ‘license’ as follows. “Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license”.

This wafer thin right is therefore regarded as the safest option by premises owners in Mumbai. And why not: if a licensee refuses to vacate residential premises, under the Rent Act, a fast track Competent Authority can decide on matters governing eviction and mesne profits. Mesne profits can be as much as twice the license fee fixed under the agreement.

Needless to add, all the three types of instruments- tenancy agreement, lease deed and a leave and license agreement- are compulsorily registerable. Not registering of a tenancy or a leave and license agreement can land the landlord/owner behind bars for a term extending up to three months!

(Divya B Malcolm is a senior associate with Kochhar & Co. The views expressed are her own and not to be construed as legal advice)

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COMMENTS

Amol Sathe

7 months ago

thanks for informative article, I would like to know if the tenant makes stop payment of the rent cheque since the landlord is having outstanding dues and transfers the adjusted amount , can the tenant be penalized for not paying full rent ? Even though he informed teh landlord that he was stopping the rent and willing to pay the adjusted amount since his due was outstanding for few months ? Please clarify

Amratlal

8 months ago

Many thanks for information. Be blessed.

Amratlal

8 months ago

What about property given on rent ages ago,Can land lords get possession in any way to sell or rebuild new building for them and part on new tenants to earn just enough for maintenance , other taxes and something to live on and pass on to their generation.

Amratlal

1 year ago

Governments all over the world should wake up now and realise they are being trusted to look after the country honestly and find the cause that creates dishonesty and bribery rather than letting it spread and be uncontrollable.

Amratlal

1 year ago

There are many landlords with various tenants occupying the premises since decades at a very minimum rent (not enough for a da'd square meal!!).
Many may have deceased and their family still on the same old rent with own property eles were on hefty rent,or using the premises as a holiday home with intention to obtain huge amount to handover the possession and property left to detroit.
Can such tenants be legally evacuated?.
How?

Subhasish Panda

1 year ago

As far as Sec.55 of the Maharashtra Act, it should apply only to Maharashtra only. Can this be extended to whole of India? Is there anything in Indian Registration Act which provides or from which it can be inferred that a License is compulsorily registrable? And if registrable, at what rate of stamp duty payable?

Harwant

3 years ago

In response to Divya Malcolm

Thank you for your clarifications! Your write up is very informative and useful as far as the laws are concerned.

Really, I was not questioning your statement of facts or knowledge of law. My post related in essence to the illegality of the provisions stated by you and its enforceability.

If a licensee and his landlord do not want to register a license agreement and just get it notarized, who is the aggrieved party and who would lodge a complaint and launch prosecute and how?

Also, if any punishment is to be prescribed, it has to be for both the landlord and the tenant/licensee. No agreement can be registered without both parties being present. What if the tenant refuses to comply with registration formalities? The provisions quoted by you seem to be arbitrary and discriminatory; and in violation of Article 13, 14 and 16 of Fundamental Rights of Citizens of India.

Based on my basic commonsense, I am of the view that a jail term can be there primarily for any major offense with criminal intentions.

It is not easy to register any document in India. The procedures are complicated and very inconvenient. Generally, the registration of documents is for the safety of the parties and it is mandatory to register the sale or lease of property.

It is not easy to register any document in India. The procedures are complicated and very inconvenient and dominated by agents. Generally, the registration of documents is for the safety of the parties except the mandatory registration of sale or lease of property. There are several hundred thousand flat owners in Registered Societies in big cities whose sale agreements are not registered. It is not practical to prosecute them and send them to jail. The solution lies in persuading the parties to register their agreements and make it convenient for them to register without paying heavily to agents and touts; rather than threatening them with jail.

For example, the employment contracts of several Professors were terminated in 2013 by the NIT Agartala (a Statuary body under the MHRD, Government of India), under a clause that the employer can terminate any employment contract any time without assigning any reason and without notice and everyone who took employment with the institution was made to accept the terms before joining. The aggrieved professors challenged the termination of their contracts under Article 226 of the constitution. The Division Bench of the Honorable High Court of Tripura ruled that the order of the authorities terminating the employment contracts were totally arbitrary violated article 13 and 14 of the fundamental rights and principles of natural justice. Nobody can be condemned without being heard and given a chance to defend himself. Also, the particular clause under which the agreement was terminated was held illegal and non-enforceable.

The clauses of the law quoted by you and understood by me are totally arbitrary and in violation of the Fundamental Rights of Citizens of India!

In the Houston (USA), any agreement can be registered with the county (District Office)on payment of a Registration fee of US $ 20 and producing three notarized copies of the agreement one is kept by the county clerk, and one each is given to the two parties to the contract. The whole procedure takes just about 5 minutes. If anywhere it takes over ten minutes, a complaint must be registered - the form and the box for lodging complaints is kept in ever public office. Every branch of major banks has at least one officer who is a registered notary for the convenience of customers.

Just making seemingly unfair rules and provisions under the laws does not solve any problems. The laws must be reasonable and based on basic commonsense. What we need is good Governance in India and which is totally lacking!

The above response is purely based on my personal views and knowledge and does not represent any kind of legal opinion!

REPLY

Amratlal

In Reply to Harwant 8 months ago

Nice to read your comments and agree the procedures are complicated and very inconvenient and dominated by agents and also civil servants + solicitors who works for hefty fees and stretch the court cases for ages.

Harwant

3 years ago

In my comment, please read: 'penalized imprisonment' as penalized with imprisonment

Harwant

3 years ago

The last part is not clear-How non-registration of License agreement can be penalized imprisonment-sounds ridiculous- 'Not registering of a tenancy or a leave and license agreement can land the landlord/owner behind bars for a term extending up to three months'! This seems to be outrageous! Registration should be left to the owners and licensee or made simpler. All the agents thrive on this kind of provisions for extortion of money and bribes far in excess of the registration charges. With millions of properties on L&L, putting people to such inconveniences is just draconian law, if it is really so!

REPLY

Divya Malcolm

In Reply to Harwant 3 years ago

Here's section 55 sub-clause 3 of the Maharashtra Rent Control Act:
"(3) Any landlord who contravenes the provisions of this section shall, on conviction, be
punished with imprisonment which may extend to three months or with fine not
exceeding rupees five thousand or with both."

Divya Malcolm

In Reply to Harwant 3 years ago

Here's section 55 sub-clause 3 of the Maharashtra Rent Control Act:
"(3) Any landlord who contravenes the provisions of this section shall, on conviction, be
punished with imprisonment which may extend to three months or with fine not
exceeding rupees five thousand or with both."

Amratlal

In Reply to Divya Malcolm 8 months ago

and how much would this have costed to the parties involved, at least there be some compansation along with.

MCA continues to make a bigger mess of ‘related party transactions'

MCA’s latest order burdens private limited companies with even more stringent compliance, in case of related party transactions

 

The Ministry of Corporate Affairs (MCA) is leaving no stone unturned to make matters pertaining to related party and transactions clear. But is it succeeding? On 24 July 2014, the MCA, vide its Companies (Removal of Difficulties) Sixth Order, 2014 (Present Order), amended clause (iv) of Section 2(76) of Companies Act, 2013 (Act of 2013). The Present Order is most likely to create outcry from companies.


It seems that the Ministry is determined to issue weekly clarifications regarding related parties. MCA first issued Companies (Removal of Difficulties) Fifth Order, 2014, dated 9 July 2014 , amending clause (v) of Section 2(76) of the Act of 2013 by replacing ‘and’ with ‘or’. This was followed with clarifications on matters relating to related party transactions vide general circular no. 30/2014 dated 17 July 2014. The MCA further amended the definition of a related party by amending Companies (Specification of definition details) Rules, 2014 vide notification dated 17 July 2014, which came into force from the date of its publication in the official gazette.


Section 2 (76) (iv) of the Act of 2013 has been amended to insert words ‘or his relative’. The amended rule post amendment will stand as under:


2(76) (iv) Related Party:  a private company in which a director or manager or his relative is a member or director;


This is done with the intent to expand the purview of related parties, while dealing with private companies. Earlier Section 297 of Companies Act, 1956 (old Act 1956) restricted the scope of related parties to a private company, of which the director is a member or director. However, under the new Act of 2013 there has been an inclusion of 'manager appointed' in such private company and now, vide Ministry’s present order, relative of a director or manager of a private company where such relative is a member or director has also been added.


The MCA had issued a draft notification on 24 June 2014, on the in-applicability/ partial/ modified applicability of certain provisions of the Act of 2013 to private companies, in exercise of powers under section 462 of the Act 2013. Public comments were invited on the same by 1 July 2014. The same was to be placed before both the houses of parliament. The notification altogether exempted private companies from the applicability of Section 188.


However, the draft notification obtained from the Rajya Sabha office has a slight modification in the terms of applicability of Section 188. The entire exemption from applicability of Section 188 was replaced with exemption only from applicability of the second proviso of Section 188 (1) of the Act of 2013. This means that if the related party is a member of the Company, then he shall not be dis-entitled from voting on such resolutions at the general meeting.


The MCA, without realizing the extent of compliance required in case of related party transactions has simply expanded the scope of definition. This means any company entering into a transaction with a private limited company in which relatives of director or manager is a member or director will be a related party transaction. This means it will require prior approval of the Audit committee, wherever applicable. Further, if the transaction is not in the ordinary course of business and not being done on arms length basis, the same will require approval by the Board. Further, if such a transaction exceeds the limits specified under Rule 15 of Companies (Meetings of Board and its Powers) Rules, 2014, prior approval of shareholders will also be required.


The present order will lead to everything but removal of any difficulty!

(Debolina Banerjee is an associate at Vinod Kothari & Company)

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COMMENTS

Dayananda Kamath k

3 years ago

may be they want to creat a mess of regulations so that the mess created by private companies may be corrected.

Suraj Arora

3 years ago

Minority Protection?
Restriction on powers of Board?
or

Restriction on smooth functioning of Companies?

One Idea leads to another confusion and mess.......!

Are patient privacy laws being misused to protect medical centres?

A 1996 law known as HIPAA has been cited to scold a mother taking a picture of her son in a hospital, to keep information away from police investigating a possible rape at a nursing home, and to threaten VA whistleblowers

 

This story was co-published with NPR's "Shots" blog.


In the name of patient privacy, a security guard at a hospital in Springfield, Missouri, threatened a mother with jail for trying to take a photograph of her own son.


In the name of patient privacy , a Daytona Beach, Florida, nursing home said it couldn't cooperate with police investigating allegations of a possible rape against one of its residents.


In the name of patient privacy, the U.S. Department of Veterans Affairs allegedly threatened or retaliated against employees who were trying to blow the whistle on agency wrongdoing.


When the federal Health Insurance Portability and Accountability Act passed in 1996, its laudable provisions included preventing patients' medical information from being shared without their consent and other important privacy assurances.


But as the litany of recent examples show, HIPAA, as the law is commonly known, is open to misinterpretation – and sometimes provides cover for health institutions that are protecting their own interests, not patients'.


"Sometimes it's really hard to tell whether people are just genuinely confused or misinformed, or whether they're intentionally obfuscating," said Deven McGraw, partner in the healthcare practice of Manatt, Phelps & Phillips and former director of the Health Privacy Project at the Center for Democracy & Technology.


For example, McGraw said, a frequent health privacy complaint to the U.S. Department of Health and Human Services Office of Civil Rights is that health providers have denied patients access to their medical records, citing HIPAA. In fact, this is one of the law's signature guarantees.


"Often they're told [by hospitals that] HIPAA doesn't allow you to have your records, when the exact opposite is true," McGraw said.


I've seen firsthand how HIPAA can be incorrectly invoked. In 2005, when I was a reporter at the Los Angeles Times, I was asked to help cover a train derailment in Glendale, California, by trying to talk to injured patients at local hospitals. Some hospitals refused to help arrange any interviews, citing federal patient privacy laws. Other hospitals were far more accommodating, offering to contact patients and ask if they were willing to talk to a reporter. Some did. It seemed to me that the hospitals that cited HIPAA simply didn't want to ask patients for permission.


The incident at the Missouri hospital, Mercy, began after Mandi Wilson took her son to an audiologist to get his hearing tested, according to the Springfield News-Leader. The paper went on to say:


Wilson was taken to an office where she was questioned by a security guard. The video of the incident, which she later posted on YouTube,records him asking for her phone to verify that the pictures she took had been deleted. The video, which Wilson took secretly, doesn't show faces but includes audio.


The secretly recorded video shows that when Wilson refused to hand over her phone, the officer told her she would be barred from returning to Mercy property and could be taken to the Greene County Jail if she came back.


"You're being trespassed for violation of HIPAA," the officer said, referring to the federal regulation governing privacy rights for patients. "...I'm informing you now that you're being trespassed. If you come back on the property, you will be detained and taken to the Greene County Jail."


"Because I took a picture of my son?" Wilson asked.

 

 



A hospital spokesperson told the newspaper that it is reviewing how its photo and video policy is being enforced.


The Daytona Beach police chief filed a complaint to the Florida Agency of Health Care Administration saying that, based on HIPAA, "his detectives have been impeded from investigating a possible sexual battery of a 75-year-old resident at a local healthcare facility," the Daytona Beach News-Journal wrote.


Brian Lee, a director of Tallahassee-based Families for Better Care, said he has never known medical privacy laws to inhibit a criminal investigation in Florida.


"That's unheard of that they would bar police from the nursing home," said Lee, who advocates for nursing home residents and their families. "They should be working to get this investigated as quickly as possible, using any agency they can to get answers to what happened."


Lawyers for the nursing home, Daytona Beach Health and Rehabilitation Center, told the paper that privacy laws prevented them from turning over information without a subpoena. An attorney hired by the home's parent company told the paper he found no evidence of any sexual assault.


The HIPAA issues involving the VA emerged as the department grappled with a scandal in which employees were accused of falsifying records to disguise how long veterans were waiting for appointments, drawing ire from veterans groups and lawmakers and prompting the ouster of senior leaders.


The Washington Post reported that the top lawyer for the American Federation of Government Employees cited several cases in which the VA invoked patient privacy restrictions to "stifle whistleblowers."


"We routinely hear from our members who wish to make disclosures about problems with the patient care system and other conduct within the VA," the union's lawyer wrote in a June letter to the VA's general counsel. "Most are reluctant to do so both because of a history of reprisals by VA management, and because of recent experience with laws designed to protect patients which are instead being used as a sword against employees by VA management."


The letter cited how two employees were unable to get a written HIPAA waiver in order to report information to the Office of Inspector General.


"VA routinely uses HIPAA as an excuse to punish into submission employees who dare to speak out," Rep. Jeff Miller (R-Fla.), chairman of the House Committee on Veterans' Affairs, told the Post.


McGraw said that HIPAA has specific allowances for police officers investigating crimes and for whistleblowers sharing information with government authorities.


"You certainly can disclose patient information for health oversight activities, including government oversight over government benefit programs," she said. "You certainly can disclose when a police officer comes and is investigating a crime. …There are provisions in HIPAA that allow them to make a disclosure about a victim of crime as long as the victim has agreed or they're incapacitated."


Courtesy: ProPublica.org

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