P&H: Food Corporation of India - Cannot Unilaterally Cut Rent Or Recover “Excess” Without Notice

punjab-haryana
⚖️ Order Date: 20 May 2026
Headnotes

Agreement - Scope and meaning - An agreement derives its binding force from the mutual consent of parties to its terms and conditions - Once parties have agreed upon terms of agreement, neither party can unilaterally alter or modify such terms without informing other party...

Rent - Agreement/Contract — Internal administrative revision by FCI’s Zonal Office reducing rent for past period, never communicated to landlords and made without their consent, cannot bind them - Deductions from subsequent rent to recover alleged “excess” paid are arbitrary, offend fairness and natural justice,...

Rent - Agreement/Contract — Contractual term cocerning payment of rent cannot ordinarily be modified unilaterally by one party alone, particularly when such modification adversely affects rights already accrued to the other side - No material has been placed on record bythe appellants to show that...


Facts of the Case

P&H: Food Corporation of India - Cannot Unilaterally Cut Rent Or Recover “Excess” Without Notice

The Punjab and Haryana High Court has held that the Food Corporation of India (FCI) could not unilaterally reduce agreed rent for leased godowns and recover alleged excess payments without prior notice or consent of the landlords. Dismissing FCI’s Regular Second Appeal, it was  affirmed concurrent decrees directing release of withheld rent.

The dispute arose from godowns leased since 1978. After rent revisions over time, payment at 57.5 paise per sq. ft. had been sanctioned and released. In 1990–91, FCI withheld rent claiming that, based on a 09.09.1987 Zonal Office letter, the rent for 17.11.1984–13.05.1985 should have been 45 paise...

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