The Calcutta Municipal Corporation, following persistent demands on us to repair/restore the building and having issued notices under Section 411 of the CMC Act, finally, at our request, following our unsuccessful efforts to have the building vacated for undertaking reconstruction and our agreeing to bear the demolition cost, had also served notices under Section 412 of the CMC Act to the tenants to vacate the building as far back as 1993, but to noavail.

The tenants have instead moved the courts to direct the Calcutta Municipal Corporation to provide alternate accommodation for the interim period during which their building shall remain unoccupiable due to restoration/reconstruction activity. They have also sought a direction from the court and an assurance from the CMC and the landlords that they will be permitted to reoccupy the footage vacated by them post-restoration, on the same rent that they were paying earlier.

The CMC has represented that there is no provision under the CMC Act for the corporation to take up the restoration work at their own cost and that the rents of the restored buildings will have to be governed by the provisions of agreements between the tenants and the landlords after restoration of the building in keeping with the provisions of the amended West Bengal Tenancy Act 1997. This is not acceptable to the property owners as it would mean that the new rents shall be under 1 per cent of the costs incurred inrestoring the building. They have therefore sought a direction to the state government to lay down a framework for refixing of the rents in such buildings on the same basis as applicable to new constructions. However, the stalemate continues. I am therefore writing to inquire what can be done to break the deadlock.

-- Sisir Bandhopadhaya, CALCUTTA

Since the matter is sub judice and the Municipal Corporation of Calcutta has already issued notices under Section 411 & 412 of the CMG Act, it is now for the courts to give directions in the matter. However, it needs to be remembered that the courts can only interpret the law and issue directions within the framework of the subsisting legislation and in the event of the legislative provisions not sufficiently covering the exigencies created by the present impasse, then they can advise the state government to pilot the enabling legislation that would enable the satisfactory resolution of such tenant-landlord disputes, particularly when the buildings inquestion have not only outlived their useful life, but are a constant threat to the life and property of the occupants. In such buildings, anything short of demo-lition and reconstruction may not work.

Whereas under the West Bengal Tenancy Act, the tenants do indeed have the first right to reoccupy the footage previously occupied by them, though not necessarily on the same floor and in the same location, they are definitely obliged to pay the standard rent, which has to be determined as a function of the cost of acquisition of the land and the cost of restoration/new construction.

Since your building is 150 years old, the cost of land at that time of acquisition of the property would have been negligible and, therefore, for all intents and purposes, it is the new cost of construction/restoration that would be the governing factor in revising the rent fixation and also the fact that whereas up to 1956, the standard rent was calculated at 6 per cent of the cost of acquisition, it is currently computed at 10per cent of the cost of acquisition, divided by the total built-up area of the building and multiplied by the area occupied by each individual tenant. Therefore, rent increase for the erstwhile tenants in the post-restoration building is imminent.

On the other hand, the landlords contend that whilst fixing revised rents, they should be permitted to value the land cost at the time of commencement of reconstruction at the prevailing market rate, as otherwise, the rebuilding exercise would be an exercise in futility, as their efforts would not yield remunerative returns. It has even been suggested that like all new constructions, these buildings should also be freed from rent control restrictions for the first 10-15 years -- in other words, that the landlords be permitted to earn market driven rents.

As there is clearly a conflict of interest between the tenants and the landlords, it is necessary that the state government come forward with a scheme of things that would be viable to both the tenants and thelandlords. As the problems faced by the CMC are not unique to the city of Calcutta and even cities like London, New York and Mumbai are grappling with these issues, perhaps the solution lies in what has been done elsewhere in the world. For instance, the Mumbai Municipal Corporation permits additional FSI of 3.50 as opposed to 2.50 permitted in central Mumbai.

The survey in Mumbai also revealed that given greater space utilisation efficiency in newly constructed buildings and downscaling of the size of corridors with double loading as opposed to single loading and staircases and lobbies, etc, the builders were able to rent or pre-sell nearly 50 per cent of the structure to the new occupants at market driven rents/prices and found that even reconstruction offered them adequate return for their entrepreneurial initiative.

Similarly, London and New York regulations stipulate that the landlords need provide only 60 per cent of the floor area previously occupied by the old tenants as the new buildings would bemore space efficient. Similarly, these buildings are also given relief in terms of property taxes. In these buildings, given the additional buildability following changes in the municipal bye-laws over the years, the landlords get to retain 60-70 per cent of the built-up area that they are able to lease/sell at market value.

We indeed need progressive tenancy laws in India and maybe the West Bengal government will initiate the pioneering legislation that could be followed by other states in India as well.