Pandit Kishan Lal Vs. Ganpat Ram
Khosla & ANR  INSC 161 (17 April 1961)
AIYYAR, T.L. VENKATARAMA DAS, S.K.
CITATION: 1961 AIR 1554 1962 SCR (2) 17
Urban Tenancy-Eviction of tenant-Application-Maintainability-East
Punjab Urban Rent Restriction Act, 1949 (East Punjab III of 1949), s.
13-Transfer of Property Act, 1882 (4 of 1882), s. 108(q).
The Singer Sewing Machine Company, respondent
2 in the appeal, was the tenant in respect of a shop under the appellant and
informed him that the company had closed its premises, that respondent I will
conduct his business in the shop, and that he will be personally responsible
for payment of rent, and in spite of the appellant's protest and without his
consent delivered possession of the said shop room to respondent 1. Thereupon
the appellant applied to the Controller under s. 13 of the East Punjab Urban
Rent Restriction Act, 1949, for eviction of the respondents and the Controller directed
the company to deliver possession to the appellant. The District Court
confirmed the Controller's order but the High Court set aside the order, in a
petition under Art. 227 of the Constitution, as having been made without
jurisdiction, holding that the company had no interest in the tenancy after
August 31, 1954, and nothing had passed to the respondent 1.
Held, that the High Court was in error on
both the points and its order must be set aside.
One of the obligations of a tenant under s.
108(q) of Transfer of Property Act, on the determination of the tenancy, is to
put the landlord in possession. If the tenant fails to do so before the expiry
of the period of notice, his tenancy continues and cannot be terminated by an
assignment in favour of another.
W. H. King v. Republic of India, 
S.C.R. 419, referred C.to. In the instant case, the company had not admittedly
served the notice as required by law and, therefore, did not cease to be the
tenant and since the respondent I was let into possession as assignee he was
not a trespasser and, consequently, the proceeding before the Controller was
maintainable against both.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 356 of 1959.
Appeal by special leave from the judgment and
order dated the November 18, 1957, of the Punjab 18 High Court at Chandigarh in
Civil Miscellaneous Application No. 712 of 1956.
B. D. Sharma, for appellant.
Hardev Singh and A. G. Ratnaparkhi, for
respondent No. 1.
Y. Kumar, for respondent No. 2.
1961. April 17. The Judgment of the Court was
delivered by SHAH, J.-The Singer Sewing Machine Company--hereinafter referred
to as the company-was, since the year 1934, the tenant for business purposes of
a shop situate at Gurgaon in the State of Punjab and belonging to Pandit Kishan
Lalhereinafter called the appellant. One Ganpat Ram Khoslahereinafter referred
to as Khosla-was the Sales Manager of the company.
The Legislature of the State of East Punjab
enacted Act III of 1949 called the East Punjab Urban Rent Restriction Act,
1949, to restrict the increase of rent of certain premises situated within the
limits of urban areas and the eviction of tenants there from. The Act granted
protection to tenants of premises used for residential and non-residential
purposes. By s. 2, el. (1), the expression "tenant" was defined, in
so far as the definition is material, as meaning any person by whom or on whose
account rent was payable for a building or rented land and included a tenant
continuing in possession after the termination of the tenancy in his favour,
but did not include a person placed in occupation of a building or rented land
by its tenant, unless with the consent of the landlord...... By s. 13, the
right of the landlord to evict a tenant even in execution of a decree was restricted
and the landlord could seek to evict his tenant by an application to the
Controller in certain specified circumstances set out in that section.
On August 30, 1954, the company addressed a
letter to the appellant intimating that it desired to close down its office in
Gurgaon with effect from September 1, 1954. The relevant part of the letter ran
19 "Now the Company has closed its
agency business at Gurgaon and Mr. Khosla will be carrying on Sewing Machine
business in Gurgaon in your shop in his personal capacity and not as a Manager
of Singer Company. In order that there may not be any misunderstanding about
the payment of rent in future, you are informed that from September, 1954
onwards Mr. Khosla will be personally responsible for the payment of rent of
your shop." The appellant informed the company that unless vacant
possession was delivered to him tenancy could not be validly determined, and
that the company will be held responsible till such delivery for liability to
pay rent and that in the event of possession being transferred to any other
person, legal action will be taken against the company. But the company
delivered possession of the shop to Khosla and allowed him to occupy the shop
in his personal capacity from September 1, 1954. Thereafter, on October 31,
1954, the appellant applied under s. 13 of the Act to the Controller for an
order against Khosla and the company on three grounds, (1) that the company did
not require the premises any longer while the appellant required the same for
his own use, (2) that the company had neglected to pay rent since September 1,
1954, and (3) that the company had assigned or sublet the shop to Khosla
without the written consent of the appellant. Khosla and the company resisted
the application contending that Khosla was the tenant of the appellant and that
in any event, on August 28, 1954, the company through its local Supervisor had
delivered possession of the shop to the appellant and that the latter agreed to
treat Khosla as his tenant with effect from September 1, 1954. The Controller
rejected the pleas raised by Khosla and the company and ordered that possession
be delivered by the company to the appellant. In appeal to the District Court
at Rohtak, the order passed by the Controller was confirmed.
In a petition under Art. 227 of the
Constitution filed by Khosla in the High Court of Judicature for.Punjab at
Chandigarh, the order passed by the District Court was quashed. The High Court
was of the view that after August 31, 1954, the 20 company had no interest left
in the tenancy and the tenancy being from month to month terminable at the will
of the appellant, such tenancy could not be the subject-matter of transfer or
of sub-letting. The High Court therefore held that the order passed was without
jurisdiction. In the course of the judgment, the High Court observed that full
rent had been paid even after September 1, 1954, and therefore the ground of
non-payment of rent "was not open to" the appellant. It is accepted
at the bar that in making this observation, the High Court was under a misapprehension.
The rent accruing due was not paid to the appellant, but was deposited in
court. Against the order passed by the High Court, this appeal is preferred
with special leave.
The Controller and the District Court found
that the tenant of the shop in dispute was not Khosla but the company.
These two tribunals also found that
possession of the shop was handed over by the company to Khosla without the
consent of the appellant. These findings were binding upon the High Court.
The only question which fell to be determined
by the High Court was whether by unilateral action on its part, the company
could require the appellant to treat Khosla as his tenant. In our view, the
High Court misconceived the nature of the tenancy. A tenancy except where it is
at will, may be terminated only on the expiry of the period of notice of a
specified duration under the contract, custom or statute governing the premises
in question. A tenant does not absolve himself from the obligations of his
tenancy by intimating that as from a particular date be will cease to be in
occupation under the landlord and that someone else whom the landlord is not
willing to accept will be the tenant. It is one of the obligations of a contract
of tenancy that the tenant will, on determination of the tenancy, put the
landlord in possession of the property demised (see s. 108(q) of the Transfer
of Property Act).
Unless possession is delivered to the
landlord before the expiry of the period of the requisite notice, the tenant
continues to hold the premises during the period as tenant.
Therefore, by merely assigning the rights,
the tenancy of the 21 company did not come to an end. It was observed by this
court in W. H. King v. Republic of India (1):
"There is a clear distinction between an
assignment of a tenancy on the one hand and a relinquishment or surrender on
the other. In the case of an assignment, the assignor continues to be liable to
the landlord for the performance of his obligations under the tenancy and this
liability is contractual, while the assignee becomes liable by reason of
privily of estate. The consent of the landlord to an assignment is not
necessary, in the absence of a contract or local usage to the contrary. But in
the case of relinquishment it cannot be a unilateral transaction; it can only
be in favour of the lessor by mutual agreement between them.
Relinquishment of possession must be to the
lessor or one who holds his interest: and surrender or relinquishment terminates
the lessee's rights and lets in the lessor." In the present case, the
company did not surrender its rights to the appellant; it sought to transfer
its rights to Khosla. The company admittedly did not serve the notice as
required by law, nor did the appellant agree to accept the unilateral
determination of the tenancy by the company. The true position was therefore
that the company did not immediately on the service of the notice cease to be a
tenant; and Khosla, because he was let into possession became an assignee of
the rights of the company as a tenant, and he could not be regarded as a
trespasser. The High Court was therefore in our view in error in holding that
the proceedings were not maintainable in the court of the Controller for
possession. Khosla being an assignee of the tenancy rights of the company was
as much liable to be sued in the court of the Controller as the company for an
order in ejectment.
We therefore allow the appeal, set aside the
order passed by the High Court and restore the order passed by the District
Court, Rohtak. The appellant will be entitled to his costs in this court as
well as in the High Court from Khosla.
(1)  S.C.R. 419.