Pagdi System is a renting arrangement wherein the tenant is also the co-owner of the

property, and has both subletting and selling rights. If the tenant is in favour of sub-letting, he
(the old habitant) and the first landlord of the property will share the lease sum at a ratio of
35:65.

If the landlord has taken pagdi for a shop, they are not in the position to get it vacated.
(Manmohan Gopal v The state of Chhattisgarh)

As per Section 4 and 5 of the UP Rent Control Act, Landlords are not allowed to take or
receive any additional payment (Pagdi), over and above the rent, for admitting a tenant to any
building. Similarly, tenants cannot take or receive any premium for admitting a sub-tenant or
any other person. If there is a dispute regarding the amount of standard rent, permissible rent
enhancement under Sections 5 or 6, taxes payable under Section 7, or rent payable after part
of the building is released or reallocated, the District Magistrate can determine the dispute
upon application. (Section 8)

Valid grounds of eviction – chapter 3, section 14 of The Delhi Rent Act, 1958.

Ø Tenant, neither paying the rent on time nor tendered the arrears whose notice the landlord
had already issued and gave a stipulated time for the payment of the arrears.

Ø Tenant has sub-let, assigned or parted with the possession of the premises without
obtaining the consent of the landlord in writing.

Ø Tenant, collects any payment in exchange for the surrender or transference of his lease.

Ø Tenant has used the property for illegal or any other activity not mentioned in the
agreement.

Ø Tenant, causing damage to the property which leads to non habitability of the property.

Ø The property being leased for residential use but the tenant has not inhabited it since the
last six months.

Ø The premises have become unsafe for human inhabitation and repairs are required on a
must basis.

Ø The demolition of certain part of the leased property is required as notice issued by the
government authority.

http://student.manupatra.com/Academic/Abk/LeaseLiceRentContSlumClearance/
Chapter8.htm#VSTalwar – This link contains all the case laws for valid grounds of eviction

Davinder Kumar Chadha & Anr vs Pushpa Rani Sahani

Key Facts:
1. Parties:
o Petitioners: Tenants occupying various shops and an almirah within the suit
property.
o Respondents: Landlords seeking eviction of the tenants.
 2. Property: Suit property located in Chandni Chowk, Delhi, comprising several shops
and an almirah rented out to the petitioners.
3. Tenancy Agreement: The petitioners had been tenants since 1987 and 1989.
4. Pagri Payments: The petitioners had paid substantial pagri amounts (Rs. 42,000, Rs.
73,000, and Rs. 200) at the inception of their tenancies, securing long-term tenancy
rights with stable rent conditions.
5. Current Rent: Petitioners were paying a monthly rent of Rs. 1,050 at the time of the
eviction petition.
Legal Issues:
1. Landlord-Tenant Relationship: Determination of the legal validity of the tenancy
agreements between the petitioners and respondents.
2. Eviction Grounds: Whether the landlords’ reasons for seeking eviction are legally
tenable.
Contentions:
1. Petitioners:
o Asserted their long-standing tenancy since 1987 and 1989.
o Highlighted substantial pagri payments to emphasize their secure tenancy
status.
o Opposed eviction on the grounds of having made significant financial
investments in the property through pagri.
2. Respondents:
o Denied the receipt of pagri amounts, aiming to weaken the tenants' defense.
o Sought eviction based on various grounds, including personal necessity and
breach of terms.
Court’s Observations:
1. Pagri Payments: The court acknowledged the historical context of pagri payments
made by the petitioners, which supported their claim of secure and long-term tenancy.
2. Tenancy Validity: The court scrutinized the legitimacy of the tenancy agreements
and the rights derived from them.
3. Eviction Grounds: The court examined the landlords’ claims and the tenants'
defenses in detail.
Judgment:
1. Tenants' Protection: The court recognized the petitioners' rights stemming from their
pagri payments and longstanding tenancy.
2. Eviction: The court’s decision on the eviction was based on a careful balance of the
parties’ rights and the legal grounds presented.

Baldev Sahai Bangia v. R.C. Bhasin, AIR 1982 SC 1091

The landlord filed an eviction of the tenant on the ground of bona fide requirement and non-
residence of the tenant under section 14(1)(d) and (e) of the Delhi Control Act, 1958. In this
case, the tenant left the house after marriage but his mother was still living and paying the
rent. So, the case revolves around the meaning of the word “family” of the tenant under the
act. The Supreme Court laid down the wider interpretation of this term and call for
amendment. Hence, the landlord failed in eviction plea.
Satyawati Sharma (Dead) by Lrs. v. Union of India, 2008 (6) SCALE 325

This judgment has made a huge change in the whole concept of the ground of eviction as
provided under Section 14(1)(e) of the Rent Control Act. For the first time section 14(1)(e) of
the Delhi Rent Control Act, 1958 was challenged before the Supreme Court, being violative
of the doctrine of equality enshrined in article 14 of the Constitution of India in Satyawati
Sharma's case. This resulted in striking down the discriminatory portion of the Section 14(1)
(e) so that the remaining part be read of-
"that the premises are required bona fide by the landlord for himself or for any member of
his family dependent on him, if he is the owner thereof, or for any person for whose benefit
the premises are held and that the landlord or such person has no other reasonably suitable
accommodation."
As a consequence thereof, the court surveyed various judgments and consistently held the
paramount object of providing safeguards to tenants against the exploitations by landlords,
who seek to take undue advantage of the pressing need for accommodation of a large number
of people looking for a house on rent for residence or business in the background of acute
scarcity.

V.S. Talwar v. Prem Chandra Sharma, AIR 1984 SC 664

Landlord files an application for eviction of the tenant under section 14(1)(e) on the ground
that the premises were being used for personal office purposes, though, the rent agreement
does not mention about the commercial purposes. The High Court rejected the landlord's
submission that the use of the word 'personal' before 'office' was intended to convey the idea
that the tenancy was 'not' for the purpose of accommodating a place of business.

Rajiv Joshi Petitioner v. R.B. Singh,

the Delhi High Court dismissed the petition challenging the eviction order passed against the
petitioner, Rajiv Joshi. The case involved an eviction petition filed by the respondent, R.B.
Singh, under Section 25B (8) of the Delhi Rent Control Act, 1958, claiming bona fide
requirement of the tenanted premises for residential occupation.

Facts:

 R.B. Singh, the respondent, a retired government employee, filed for eviction to
accommodate his family migrating to Delhi.
 The petitioner, Rajiv Joshi, was a tenant in the ground floor of the property at a
monthly rent of Rs. 2,000/- since 2009.
 The petitioner claimed that the property was let out for commercial purposes and that
the respondent had sufficient accommodation on the first floor.

 The trial court found that the petitioner did not deny the landlord-tenant relationship
or the ownership of the respondent.
 The trial court ruled that the respondent’s age and requirement to live on the ground
floor due to old age were valid reasons for eviction.
 The petitioner’s contentions regarding the nature of tenancy (residential vs
commercial) and Pagri were deemed irrelevant by the trial court for the purpose of
eviction.
  The High Court’s revisionary jurisdiction under Section 25B(8) is limited and does
not function as a first appeal.
 The High Court will interfere only if there is a gross illegality or material irregularity
in the order of the Rent Controller.

High Court’s Decision:

 The High Court agreed with the trial court's findings, noting the bona fide need of the
respondent.
 The petitioner's concerns about the respondent not shifting to Delhi were dismissed,
with a provision under Section 19 of the Act for restitution if the landlord abuses the
process.

Key Takeaways Related to Pagri System

Pagri System:

 The petitioner claimed to have paid Rs. 2,50,000/- towards Pagri when inducted as a
tenant.
 The respondent denied receiving Pagri.
 The trial court deemed the Pagri-related contentions irrelevant for deciding the
eviction petition.

Legal Perspective:

 Under the Delhi Rent Control Act, Pagri or any upfront payment by tenants is often
contested and its implications depend on the specific facts and evidence.
 Courts focus on the bona fide requirements of the landlord and legal provisions
governing the eviction rather than the historical financial arrangements like Pagri.

Implications:

 Tenants cannot rely solely on Pagri payments to contest eviction if the landlord can
demonstrate bona fide need and comply with legal requirements.
 Any disputes regarding Pagri are secondary to the main considerations of the
landlord's requirement and compliance with the Rent Control Act.

Rules for inheriting tenancy rights under the Pagdi system

Section 7 (15) (d) of the Maharashtra Rent Control Act, 1999, states that a tenant’s family
member who has been living with the dead tenant at the time of his/her death shall be eligible
first from the family as the successor to succeed the tenancy. Upon the demise of a current
pagdi tenant, the tenancy rights can only be transferred to that legal heir(s). The new tenant
(legal heir) can request the landlord to issue a fresh rent receipt in the heir(s) name(s). But
testamentary succession is not possible, as tenancy rights are peculiar to the tenant and
therefore a tenant cannot bestow his/her tenancy rights under a Will.
Therefore, the family member who desires to claim the tenancy rights of the demised tenant
must show evidence that he/she was perpetually living with the deceased tenant at the time of
his/her demise. Only such a family member will get precedence over all other members of the
family for the bequest of such tenancy rights over the premises.

succession to tenancy rights is based on possession and enjoyment of tenancy rights of a

family member who has resided with the deceased tenant. Therefore the ‘heir’ who wishes to
claim tenancy rights of the deceased tenant must prove that he/she was permanently residing
with the deceased tenant at the time of his/her death. Only such an “heir” will get priority
over all other members of the family with respect to the inheritance of such tenancy rights
over the premises.