LAWNOTE
May 2012, Issue 1
Premises Rent Control Act 1991:
Avoiding the unavoidable*†
1. Section 18 of the Premises Rent
Control Act 1991 (“the PRCA”)
provides a tenant what is legally
called ‘security of tenure’1. Now let
us consider a hypothetical situation -
A, a landlord who owns a
commercial building, enters into a
lease agreement with B, a private
company, for a lease term of 5
years. A and B agree in the lease
agreement that the provisions of
Section 18 of the PRCA shall be
inapplicable to the lease agreement.
In other words, after 5 years term, B,
the tenant, shall be contractually
bound to vacate the leased
premises. The question is can A and
B contractually agree to such an
understanding?
2. Section 18(1) of the PRCA opens
with the following words:
“Notwithstanding anything
contained in the Transfer of
Property Act, 1882 or the
Contract Act, 1872, no order or
decree for the recovery of
possession of any premises shall
be made as long as the tenant
pays rent to the full extent
allowable by the Act and perform
the condition of the tenancy.”2
1
It means giving the tenant a right to a new
tenancy upon determination of the existing
tenancy. Thus, a tenant under Section 18 of the
PRCA may not be evicted by the landlord simply
by the giving of notice to quit or by the ending of
a fixed term of the tenancy.
2
The Bangla version reads as follows:
Aby‡gv`b‡hvM¨ fvov cÖ`vb Kiv nB‡j mvaviYZt D‡”Q‡`i Av‡`k
1
VERTEX CHAMBERS
3. The above non-obstante stipulation
gives Section 18 of the PRCA
supremacy over any other law in
Bangladesh. Therefore, at the
outset, it would appear that the lease
agreement between A and B may
not stand before the prohibition of
Section 18 of the PRCA.
4. However, we should consider the
opening line of Section 18 of the
PRCA which starts as
“Notwithstanding anything contained
in the Transfer of Property Act, 1882
or the Contract Act, 1872”. It could
be argued that the supremacy of
Section 18 of the PRCA has been
given only over two statutes – that is,
the Transfer of Property Act, 1882 or
the Contract Act, 1872. Also, it could
be argued that Section 18 is silent
with respect to any contract or
agreement executed between
commercial parties. Thus, it would
follow that parties by any contract or
agreement may contract out of the
operation of Section 18 of the PRCA
†`Iqv nB‡e bv|- Transfer of Property Act, 1882 (IV of
1882) A_ev Contract Act, 1872 (IX of 1872) G hvnv
wKQzB _vKzK bv †Kb, †Kvb fvovwUqv GB AvB‡bi Aaxb
Aby‡gv`b‡hvM¨ fvov hZw`b ch©šÍ c~Y©gvÎvq Av`vq Kwi‡eb Ges
fvovi kZ©vw` c~iY Kwi‡eb ZZw`b ch©šÍ evox gvwj‡Ki AbyKz‡j
evoxi `Lj c~biæ×v‡ii Rb¨ †Kvb Av‡`k ev wWwµ cÖ`vb Kiv hvB‡e
bv|
LAWNOTE
and in such case the prohibition of
Section 18 may be inapplicable.
5. But the problem of this line of
argument is that it does not take into
account the effect of Section 23 of
the Contract Act 1872, which states,
amongst others, that a contract
would be void if the object of such
contract is forbidden by law or of
such a nature that, if permitted, it
would defeat the provisions of any
law.
6. Now, it could be safely assumed that
the lease contract between A and B
is not forbidden by law. But the issue
is whether the lease contract
between A and B would be regarded
as of such a nature that, if permitted,
it would defeat the provisions of any
law – that is – Section 18 of the
PRCA which guarantees a tenant’s
security of tenure.
7. One way to look at this issue to
consider the legal proposition that
everyone has a right to agree to
waive the advantage of a law made
solely for the benefit and protection
of the individual in his private
capacity. Thus, it could be argued
that B, a private company, having
entered into a lease contract in its
private capacity with A, another
private person, is entitled to
contractually waive the benefit
afforded to it by Section 18 of the
PRCA. In this context it could be
argued that the words “if permitted it
would defeat the provisions of any
law” as used in Section 23 of the
Contract Act should be interpreted to
refer to performance of a lease
contract which necessarily entails
the violation of the Section 18 of the
May 2012, Issue 1
VERTEX CHAMBERS
PRCA. What makes a contract,
which is otherwise legal, void is that
its performance is impossible except
by disobedience of the law. Clearly
no question of illegality can arise in
the lease contract between A and B
as the effect thereof does not
necessarily give rise to an unlawful
act.
8. There is no reported Bangladeshi
caselaw that deals with this
important issue. Given the rapid
development in the real estate sector
in Bangladesh, perhaps the time has
come to review Section 18 of the
PRCA in a new light and pave the
way to allow business people to
enter into commercial tenancies
without having to worry about the
protectionist philosophy that
underlies Section 18 of the PRCA.
*
Junayed Chowdhury, Managing Partner
†
Disclaimer: The opinions and comments
expressed in this LawNote are not to be
regarded or construed as legal advice by and
from Vertex Chambers or any of its members. It
is highly advisable that any person should seek
independent legal advice before relying on any
of the contents of this LawNote.
© VERTEX CHAMBERS 2012