High Courts Cannot Routinely Interfere in Rent Matters Under Article 227: Supreme Court

The Supreme Court has held that while the high court's supervisory jurisdiction under Article 227 of the Constitution is not completely barred in rent control matters, such powers can be exercised only in exceptional circumstances.

A Bench of Justices Sanjay Karol and N Kotiswar Singh clarified that the high court, while exercising supervisory jurisdiction, cannot simply substitute its own view for that of the court or tribunal under its supervision.

"In the absence of material on record to support the rate of rent relied upon, an order of direct enhancement of rent under Article 227 is unsustainable," the Bench said.

When Can high courts Exercise Powers Under Article 227 in Rent Matters?

Court explained that high courts, being the highest judicial authorities in a State, have been entrusted with the power of superintendence over courts and tribunals within their jurisdiction. This power is meant to ensure that subordinate courts and tribunals act within the limits of the authority conferred on them by law.

The Bench emphasised that the focus of Article 227 is not on whether a decision is correct or incorrect. Instead, the power is intended to address situations involving abuse of power, failure of duty, or grave injustice.

According to the Court, supervisory jurisdiction can ordinarily be exercised in three situations: when a court or tribunal exercises a power it does not possess, fails to exercise a power that it does possess, or acts beyond the limits of its jurisdiction while exercising its powers.

Court further noted that this power is constitutional in nature and is not curtailed by statutory restrictions on revision. However, it must be exercised cautiously and sparingly, not as an appellate power. It is discretionary and may even be exercised suo motu.

The Bench also underlined that routine interference in rent control disputes is generally unwarranted because special rent control statutes already provide a framework for the exercise of powers by designated authorities.

What Was the Rent Dispute Before the Court?

The dispute concerned a building in Uttar Pradesh that had been leased by the respondent-landlords to the Trade Tax Department of the Uttar Pradesh Government in 1966.

After unsuccessful attempts in the 1990s to secure eviction of the tenant, the landlords moved an application seeking enhancement of rent.

The property comprised a plot measuring 5,866 sq. ft. with a covered area of 3,645.06 sq. ft. While considering the request, the Rent Control Authority took note of the property's prime location and the fact that the same government department was paying substantially higher rent for another, much smaller premises. It also considered the rent being paid for a similarly situated building.

On that basis, the Authority fixed the rent at Rs 4 per sq. ft., resulting in a monthly rent of Rs 14,400.

However, on an appeal filed by the landlords, the Additional District Judge, Bahraich remanded the matter to the Rent Control Authority for fresh consideration and directed it to pass a fresh order within six months.

Why Did the high court Increase the Rent?

The landlords challenged the remand order before the high court.

By its order dated May 5, 2025, the high court accepted the landlords' contention that the appellant-tenants were paying rent at the rate of Rs 14 per sq. ft. for an adjoining property. Recording that the landlords would be satisfied if the same rate was applied in the present case, the high court effectively enhanced the rent.

The high court also observed that sending the matter back once again would only cause further delay.

The tenants challenged this decision before a Division Bench through a Special Appeal, but the appeal was dismissed as not maintainable.

What Did the Supreme Court Say About Rent Enhancement?

Examining the provisions of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, the Supreme Court held that an application seeking enhancement of rent under the proviso to Section 21(8) of the Act was both maintainable and permissible.

Court rejected an interpretation that would effectively prevent landlords from either recovering possession of their property or obtaining a fair enhancement of rent.

"If the contention of the appellant-State is accepted... it would amount to virtually making the tenant into the landlord. No bona fide requirement; no enhancement of rent: means no way for the landlord to reclaim his own property either physically or financially," the Bench observed.

It added that no statutory provision could be interpreted so restrictively merely because the tenant happened to be the Government.

Why Was the high court's Order Set Aside?

The appellant-tenants argued that there was no evidence on record to support the high court's conclusion that rent for the adjoining premises was Rs 14 per sq. ft.

The Supreme Court found merit in this contention. It noted that the figure appeared to have been mentioned only by the landlords' counsel and that there was no documentary material on record substantiating the claim. Nor was there any recorded statement from the tenants either accepting or contesting the proposed rate.

In these circumstances, Court held that the high court could not have directly enhanced the rent under Article 227.

"We also hold that the high court can in exceptional circumstances exercise its supervisory power in matters arising out of rent control legislations; however, in the facts of this case, and in view of the absence of material on record, the impugned judgment is set aside," the Bench said.

The Supreme Court accordingly remanded the matter to the competent Authority for a fresh determination of the rent payable by the tenant within four months.

Court further directed that the rent eventually determined would be applicable from the date of institution of the original application in 2008.

Case Title: State of UP & Ors Vs Raghvendra Nath Srivastava & Ors

Bench: Justices Sanjay Karol and N Kotiswar Singh

Date of Judgment: May 29, 2026