Delhi Rent Control Act Inapplicable To Premises Held Under Government Grant; Section 3 GG Act Overrides General Laws: Supreme Court

"Expression 'any rule of law, statute or enactment' in Section 3 of the Government Grants Act is of the widest amplitude and admits of no restrictive construction," Supreme Court, in a significant ruling dated April 22, 2026, held that the Delhi Rent Control Act, 1958 (DRC Act) has no application to premises held under a Government grant.

A bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra observed that Section 3 of the Government Grants Act, 1895 (GG Act) mandates that all provisions and limitations in a Government grant shall take effect according to their tenor, notwithstanding any statute or enactment to the contrary. The Court noted that such grants are insulated from the "tentacles of any statutory law" that might be inconsistent with the terms of the grant.

The dispute originated from a perpetual lease deed executed in 1945 by the Governor General in Council in favour of the respondent for land at Sujan Singh Park, New Delhi. The Union of India occupied several flats for housing government officials, leading the respondent to claim a landlord-tenant relationship and seek eviction under Section 14(1)(a) of the DRC Act for non-payment of rent. While the Additional Rent Controller and the High Court upheld the eviction, the Union of India appealed, arguing that the occupation was governed exclusively by the GG Act and not rent control legislation.

The primary question before the Court was whether the occupation of the premises was governed exclusively by the terms of the perpetual lease under the GG Act or if it fell under the DRC Act. The Court was also called upon to determine whether Section 3 of the GG Act is restricted to excluding the Transfer of Property Act or if it carries an overriding effect over all general statutory enactments.

GG Act Elevates Government Grants To A Position Of Supremacy

The Court emphasized that the legislative object of the GG Act was to ensure that Government grants operate strictly according to their tenor. The bench noted that while Section 2 of the GG Act excludes the Transfer of Property Act, Section 3 travels much further by providing a non-obstante clause against any other "rule of law, statute or enactment."

The bench observed that Section 3 of the GG Act confers upon Government grants a special statutory immunity. The Court held that this provision "constitutes an overriding declaration that the grant shall prevail in accordance with its tenor, even if such tenor is inconsistent with general statutory law."

"The GG Act elevated the stipulations contained in the grant to a position of supremacy."

Misplaced Reliance On Narrow Interpretation Of Section 3

The Supreme Court found that the High Court had erred by adopting a narrow construction of Section 3 based on the precedent in Collector of Bombay v. Nusserwanji Rattanji Mistri (1955). The bench clarified that a judgment is only an authority for what it actually decides and that the earlier case arose in a distinct factual setting regarding assessment tax.

The Court held that the approach seeking to confine Section 3 merely to the exclusion of the TP Act does not accord with the plain language of the law. It noted that the provision is not a mere ancillary clause but a mandate that the grant's tenor prevails "unfettered by inconsistent statutory or common law principles."

DRC Act Intended For Conventional Tenancies, Not Sovereign Grants

The Court ruled that the DRC Act was designed to regulate conventional tenancies arising under general law and does not extend to holdings regulated by a Government grant. It noted that the legal character of such a grant flows from the sovereign power and the specific conditions embodied in the instrument itself.

The bench held that a grant under the GG Act constitutes a legal relationship whose incidents are governed exclusively by the tenor of the grant. It observed that "the rights and obligations of the grantee fall to be determined strictly with reference to the grant itself and not dehors it."

"The DRC Act does not extend to nor govern a holding originating in and regulated by a Government grant."

Rent Controller Lacked Jurisdiction To Entertain Eviction Petition

The bench observed that both the Rent Controller and the Rent Control Tribunal misdirected themselves by treating the parties as being in a conventional landlord-tenant relationship. By failing to advert to the sovereign character of the grant, the lower forums exercised jurisdiction that they did not legally possess.

The Court held that the existence or absence of a remedy cannot determine jurisdiction. Since the eviction proceedings were instituted under a statutory regime alien to the legal character of the relationship, the bench concluded that the proceedings were "vitiated at their inception."

No Right To Eviction If Not Stipulated In The Grant

The Court scrutinized the perpetual lease deed and found that it contained no express clause providing for eviction on the ground of non-payment of rent. It held that since the grant must operate according to its tenor, its silence on eviction for arrears cannot be converted into a ground for forfeiture of the lease.

The bench clarified that while the respondent cannot seek eviction under the DRC Act, its remedy is confined to the recovery of arrears of rent through appropriate civil proceedings. The Court noted that the "tenor of the grant prevails," and the Government cannot travel beyond the four corners of the instrument.

"The grant must operate according to its tenor, and its silence cannot be converted into a ground of forfeiture."

The Supreme Court allowed the appeal and set aside the Delhi High Court's judgment, holding that the eviction proceedings under the DRC Act were without jurisdiction. The Court concluded that premises held under a Government grant are governed exclusively by the terms of the grant under the GG Act, though the respondent remains at liberty to pursue civil remedies for the recovery of rent.

Date of Decision: 22 April 2026