Property worth crores, rent still in hundreds

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NEW DELHI: CM Chadha’s heart bleeds every time he reads about Connaught Place’s high global ranking for office space rentals. His 2,499 sq ft property in D-block that houses Embassy restaurant fetches Rs 312.6 per month—not enough for a meal at the place. His other property—16,000 sq ft over three floors in Scindia House—earns Rs 627.5 from DTC. The sum, Rs 940, is less than the current rental for a square foot of commercial space in CP.

Chadha is the managing director of Atma Ram Properties Pvt Ltd and Atma Ram Builders Pvt Ltd. The absurd rates he gets are a result of the Delhi Rent Control (DRC) Act, 1958. Speaking on his behalf, his lawyer, Amit Sethi, says, “What we get is ridiculous. The market rate is around Rs 1,000 per square foot. In 2009-10, we paid house tax amounting to Rs 2.94 crore.” Chadha has taken his case to the high court. When TOI called Sunil Malhotra, owner of Embassy restaurant, he refused to comment on the issue.

Like Chadha, many landlords in the city have grown old waiting to regain control and realize the full worth of their rented properties. Praveen Jain, 68, was just 13 when his sprawling property passed under the DRC act in 1958. Now handicapped, he lives alone in a small room in Paharganj.
More than his ailing body what hurts Jain is the salutation ‘seth’. True, he’s the owner of the 12,600 sq ft Katra Johrimal Gyanchand, but his monthly income from rent is just Rs 450.

“Repeal of the DRC act is a mirage. Neither BJP nor Congress will implement it as tenants far outnumber landlords. What matters to parties is their vote bank,” says Jain. Individual tenants pay Jain amounts ranging from Rs 5 to Rs 12 a month.

Jain has lost hope but Shobha Aggarwal is fighting on. “I’ll get what is rightfully mine,” she said at her recently vacated first floor. In 1995, Aggarwal inherited a 12,000 sq ft building on Asaf Ali Road from her grandmother, Sharbati Devi. “At that time there were many tenants. Now we want to use the place as a residence but our oldest tenant, Sahni Sons Pvt Ltd, is still occupying 800 sq ft space on the ground floor and is protected under the rent act.” Aggarwal and her three siblings get Rs 440 a month as rent, but her niece, who plans to open a boutique on the first floor, pays Rs 20,000 for a 12ft x 12ft room in Shahpur Jat Village. Nitin Sahni, owner of Sahni Sons, says, “I don’t think the (1995) act will ever come into place… I thought of buying the property but it was never offered.”

Anil Prasad, famous as the owner of Chunnamal Haveli in Chandni Chowk, rents a godown in south Delhi for Rs 1.5 lakh but his own 130 shops below the haveli fetch Rs 75 each—a total of Rs 9,750. Prasad also owns a heritage building with an area of a little less than an acre in Chandni Chowk. “They belong to me but are still not mine. If I deposit Rs 20,000 with Punjab National Bank, my tenant, the interest will be more than the rent they pay me.” PNB, which pays Prasad Rs 124 a month, has shifted out but is not vacating the prime property. “It hurts to know that Dena Bank, less than 50m away from PNB, pays Rs 2.5 lakh a month as rent.”

The tenants, however, paint a different picture. “Why are the rents so low? The owners are not doing charity. Tenants paid the owners large sums called pagdi when they moved in,” says Atul Bhargava, president of New Delhi Traders’ Association, claiming that the tenants are actually the owners. “But the pagdi deals were never done in writing, so they are difficult to prove,” he adds.

http://timesofindia.indiatimes.com/city/delhi/Property-worth-crores-rent-still-in-hundreds/articleshow/20937424.cms

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