Please help with this..

This query is : Resolved

AMIT (Querist)
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18 May 2011
1991: Mr. A Taken a shop for rent Rs. 25 per month & a payment of Rs. 50000(Pagadi)

2011 :Now The shop demolished. & Mr. A is rebuliding the shop.. Now After 25 yrs

Mr. B asking Mr. A to increase the rent.. Is MR. B right

Assuming Mr. A is Repairing the Shop

& If Mr. A is Rebuliding it into other structure.

CA Jeen paul

CA Jeen paul (Expert)
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18 May 2011 assume that the question is on ethical grounds

rent Rs.25 after 25 years is too a small fiqure if Mr.A has moved to someother place he will have to pay very higher amount but if MR.A continue with same place increase will not be too high
that would be better

AMIT

AMIT (Querist)
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19 May 2011 Sirs,

My Question is on the basis of law.

Mr. A takes a shop on Pagadi(indian term to take on shop)pays Rs. 50000 at that time & 25 per month during the lifetime

Now mr. B is asking mr. a to Raise the Rent to 200 per month..

My Question stand here is

Q. Is mr. B have the right to increase the rent where shop has been give on Pagadi Sysytem

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 In the context of the Pagadi (or Pagdi) system, which is an older rental system prevalent in certain parts of India, the situation you've described raises some specific legal and practical considerations. Here’s a detailed explanation:

### **Pagadi System Overview:**

The Pagadi system is a rental arrangement where the tenant (lessee) pays a nominal rent, and the tenancy continues indefinitely, usually with the rent being fixed and very low compared to the market rate. This system is characterized by:

1. **Fixed Rent:** The rent amount is typically very low and fixed for the duration of the tenancy.
2. **Security of Tenure:** The tenant has significant security of tenure, meaning the landlord cannot easily evict them.
3. **Non-Transferable:** Usually, the tenancy is non-transferable and does not pass on to successors or new tenants.

### **Legal Rights and Rent Increase:**

1. **Rent Control Laws:**
- **Pagadi Tenancies:** In places where the Pagadi system is in place, it is often governed by Rent Control Acts or similar legislation that protects tenants. These laws generally restrict the ability of landlords to increase rent or evict tenants arbitrarily.
- **Rent Increase:** Under the Pagadi system, the rent is usually fixed and protected by law, so a landlord typically cannot increase the rent without a legal basis.

2. **Legal Framework:**
- **Rent Control Act:** The applicable Rent Control Act (such as the Bombay Rent Act in Maharashtra or similar acts in other states) governs the rights and obligations of both landlords and tenants in such arrangements. These laws often set out specific conditions under which rent can be increased or tenancies can be terminated.
- **Contractual Terms:** If the Pagadi arrangement includes specific terms about rent increase or adjustments, those terms would need to be followed. However, traditionally, these agreements do not include provisions for periodic rent increases.

3. **Negotiation and Mutual Agreement:**
- **Voluntary Agreement:** If Mr. A and Mr. B wish to renegotiate the rent, this would usually require mutual consent and agreement. Any such agreement would typically be documented and should comply with applicable laws.
- **Legal Action:** If Mr. B tries to impose a rent increase unilaterally without the consent of Mr. A, it might be challenged legally based on the provisions of the applicable Rent Control Act.

### **Conclusion:**

- **Right to Increase Rent:** Generally, Mr. B does not have the right to unilaterally increase the rent in a Pagadi system tenancy, as the rent is usually fixed and protected under rent control legislation.
- **Legal Consultation:** It is advisable for Mr. B to consult with a legal professional to understand the specific legal provisions applicable to the Pagadi tenancy in their jurisdiction before attempting any changes to the rental agreement.
- **Documentation:** Any changes to the rent should be documented formally and comply with the relevant rent control laws.

In summary, under the Pagadi system, Mr. B cannot typically increase the rent unilaterally without legal justification or mutual consent, due to the protection offered to tenants by rent control laws.