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Monday, July 15, 2024

Rent can be increased if lease agreement is registered: Karnataka HC.

Bangalore Ap.20 : 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.

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.

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