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Business Recorder

LHC rules market committees can fix rents, penalise defaulters

LAHORE: The Lahore High Court has held that a market committee (MC) is competent to fix market based rents with respect to its leased properties. The court observed that a market committee is required no approval or special or general direction of the government or a person authorised with respect to fixation of rent of already leased properties. The court said a market committee is also empowered to cancel registration of market functionaries in case of default in payment of dues and can also initiate civil and criminal proceedings with respect to punishment to defaulters and recovery of dues as arrears of land revenue. The court dismissed a petition of Anjuman Dukandaran Samdani Market against Chairman Market Committee Toba Tek Singh for increasing rents of the shops. The court said the MC as owner of the shops can determine reasonable rent which must be accepted and paid by the tenants, the court added. The court, however, observed that it is reasonably expected that the rents should be based on prevalent market rates and are settled with mutual consultation of the stakeholders. The court observed that a market committee is required to generate maximum resources and is expected to expand the same in the provision of facilities to realize the objectives of its establishment and does not remain dependent upon the grants made by the government. The court said nothing has been brought on record that the assessment so provided did not reflect prevailing market rents. Nothing has been placed on record that any bye-laws of MC exist regarding the management and operation of public markets has been violated in fixation of rent of shops, the court added. The court said that there is no substance in the contention of the petitioner that the rent could not be increased by more than 10% per annum or 25% after 3 years as there is no such stipulation in the Rented Premises (RP) Act. There is no prohibition in the RP Act that the existing rents could not be enhanced or rationalized subject to existing tenancy agreements to conform to market realities, the court added. The court said it is also manifest from record that meaningful and elaborate consultation has already taken place between the stakeholders and a substantial number of shopkeepers are already paying enhanced rent. The court observed that in case of undue resistance or abuse of the process as is manifest in the instant case, a market committee is equipped with necessary powers under the Act to enforce its decision in accordance with law. The court said due process has been adopted during assessment of rent of shops which is liable to be paid by the members of the Anjuman and in case of non-payment, the defaulting members of the Anjuman are liable to be dealt with in accordance with law, the court concluded. Copyright Business Recorder, 2025