In a significant ruling delivered on 31st July 2025, the Kerala High Court upheld the maintainability of a rent control petition filed under the Kerala Buildings (Lease and Rent Control) Act, 1965 (KBLR Act) by SmartCity (Kochi) Infrastructure Pvt. Ltd. against Musthafa & Almana International Consultants, despite arguments relying on the overriding provisions of the Special Economic Zones Act, 2005 (SEZ Act).
Case Background
The dispute stemmed from SmartCity Kochi Infrastructure Pvt. Ltd. sub-leasing commercial premises within a notified SEZ to Musthafa & Almana International Consultants, who had earlier obtained approval as an SEZ entrepreneur. After the tenant allegedly defaulted on rental payments, the developer initiated eviction proceedings under Section 11(2)(a) and (b) of the KBLR Act.
"The tenant failed to pay rent arrears despite repeated demands, prompting the landlord to move the Rent Control Court," – [Court noted]
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The tenant challenged the maintainability of the rent control petition, arguing that:
- The SEZ Act overrides the KBLR Act, as per Sections 42 and 51.
- Section 42 mandates arbitration of all civil disputes in SEZs unless a designated court exists under Section 23.
- The landlord and tenant had an arbitration clause in their sub-lease agreement.
- Disputes like rent default should be resolved by arbitration, not rent control courts.
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- No Designated Court under SEZ Act: Since no designated court was notified under Section 23, arbitration would apply only if explicitly invoked, which both parties had not done.
- No Ongoing Arbitration: Despite the lease deed having an arbitration clause, neither party initiated arbitration proceedings.
- KBLR Act Still Applies: The High Court ruled that rent control matters are non-arbitrable if covered under special statutes like the KBLR Act. The tenancy, though within an SEZ, still falls under the KBLR Act.
- SEZ Act Doesn’t Provide Eviction Mechanism: The Court held that the SEZ Act focuses on economic regulation and does not provide a legal procedure for tenant eviction, unlike the KBLR Act which is a self-contained code.
“There is no conflict in the subject matter of both statutes. SEZ Act does not cover landlord-tenant relationships or eviction mechanisms,” – the Court clarified.
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- No Applicability of PPEUO Act: The court also rejected arguments under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, as the SEZ in question was a private SEZ with only 16% government stake, failing the ‘public premises’ definition.
“The premises is a private SEZ and not governed by PPEUO Act provisions,” – Rent Control Court ruled.
- Legal Doctrine Considered: The Court referred to principles like:
- Harmonious construction between SEZ and KBLR Acts.
- Doctrine of legislative intent and statutory repugnancy under Article 254 of the Constitution.
The High Court dismissed the objections raised by the tenant and upheld the maintainability of the eviction petition under the KBLR Act, affirming that the SEZ Act did not override it.
“The Rent Control Petition is maintainable and not barred by Sections 23, 42, or 51 of the SEZ Act.” – Kerala High Court
Case Details – Musthafa & Almana International Consultants v. SmartCity (Kochi) Infrastructure Pvt. Ltd.
Case Type: Original Petition (Rent Control)
Case No.: O.P. (RC) No. 134 of 2025
Related Rent Case: R.C.P. No. 134/2020
Judgment Date: 31 July 2025
Petitioner: Musthafa & Almana International Consultants
Respondent: SmartCity (Kochi) Infrastructure Pvt. Ltd.
