Anand Nivas (Private) Ltd. Vs. Anandji
Kalyanji Pedhi & Ors [1963] INSC 189 (5 September 1963)
05/09/1963 SARKAR, A.K.
SARKAR, A.K.
HIDAYATULLAH, M.
SHAH, J.C.
CITATION: 1965 AIR 414 1964 SCR (4) 892
CITATOR INFO:
E 1967 SC1853 (7) E 1968 SC 471 (11) RF 1969
SC1187 (8) F 1972 SC2526 (9) RF 1973 SC 772 (19) D 1976 SC2229 (9,10) D 1977 SC
739 (7) E 1980 SC 226 (6,16) RF 1982 SC1043 (19) RF 1985 SC 507 (16) RF 1985 SC
796 (18,19) D 1987 SC 117 (45,50)
ACT:
Houses and Rents-Statutory Tenant and Contractual
tenant Difference-Right of sub-letting-Bombay Rents, Hotel and Lodging House
Rates Control (Amendment) Ordinance, 1959-Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947, ss. 12, 14 and 15.
HEADNOTE:
The respondents granted to one Maneklat for
five years a lease of the ground and the first floor of a building named Anand
Bhawan in the town of Ahmedabad. After the expiration of the period of the
lease, a suit was instituted by the respondents against Maneklal for a decree
in ejectment and the realisation of arrears of rent. The suit was decreed.
However, Maneklal sublet a part of the
premises in his occupation to the appellant after the institution of the suit
against him but before the promulgation of the Bombay Rents, Hotel and Lodging
House Rates Control (Amendment) Ordinance, 1959. In execution of the decree,
the respondents obtained possession of the first floor but were obstructed as
to the rest by the appellant and two others who claimed to be sub-lessees from
Maneklal and thereby to have acquired rights of tenancy of the ground floor
upon determination of the tenancy of Maneklal.
The appellant filed a suit for a declaration
that it was not bound to deliver possession of the premises in its occupation
in execution of the decree passed against Maneklal and for an injunction
restraining the respondents form enforcing the decree. The trial Court refused
to grant the interim injunction against the respondents. The lower appellate
court also refused to issue the interim injunction. The High Court dismissed
the appeal of the appellant on the ground that a statutory tenant remaining in
possession after determination of its contractual tenancy was in law not
competent to sublet the premises in whole or in part and a person claiming to be
a sub-tenant from a statutory tenant could not effectively plead the protection
of s. 14 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
as amended by the Ordinance of 1959. The appellant came to this Court by
Special Leave.
Held (per Hidayatullah and Shah, JJ. Sarkar,
J. dissenting) (i) Maneklal was a statutory tenant and as such had no right to
sublet the premises and the appellant acquired no right of a tenant on the
determination of the right of Maneklal by virtue of s. 14 of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947 as amended in 1959.
(ii)The appellant was bound by the decree
obtained by the respondents against Maneklal and it could not take advantage of
the Transfer of Property Act and the Indian Registration (Bombay Amendment)
Act, 1939.
By s. 15(1), all transfers and assignments of
interests in the premises and sub-letting of premises by tenants are, subject
to any contract to the contrary, made unlawful.
This provision applies only to contractual tenants
and not to statutory tenants who have no interest in the property.
A statutory tenant cannot sublet the premises
because subletting involves a transfer of the right to enjoy property for a
certain period in consideration of price paid or promised and a statutory
tenant has merely a personal right to resist eviction. Section 15(2) is in the
nature of an exception to s. 15(1). It applies to contractual tenancies. It
protects subtenants of contractual tenants and removes the bar against
subletting imposed by s. 15(1) as well as by contract, provided the transferee
is in possession of the premises at the commencement of the Ordinance.
A statutory tenant is a person who remains in
occupation of the premises let to him after the determination of or the expiration
of the period of the tenancy. He has no estate or interest in the premises
occupied by him. He merely enjoys the protection of the law in that he cannot
be turned out so long as he pays the standard rent and permitted increases, if
any, and performs the other conditions of the tenancy. His right to remain in
possession after the determination of the contractual tenancy is personal. It
is not capable of being transferred or assigned and devolves on his death only
in the manner provided in the Act. On the other hand, the right of a
contractual tenant is an estate or interest in the premises and in the absence
of a contract to the contrary, is transferable and the premises may be sub-let
by him.
Roe v. Russel, [1928] 2 K. B. 117, Lewis v.
Reeves, [1951] 2 All E. R. 855, Krishna Prasad Bose v. Sm. Sarajubala Dassi,
A.I.R. 1961 cal. 505 and Solomon v. Orwell, [1954] 1 All E.
R. 874, referred to.
894 Per Sarkar, J. (1) The word 'tenant' in
s. 13(1)(c) of the Bombay, Rents, Hotel and Lodging House Rates Conrtol Act,
1947 includes not only contractual tenants but also statutory tenants and a
statutory tenant has the power to sublet. There is no justification for the
view that subletting by a statutory tenant of a part of the demised premises
results in a parting with possession of the premises or that such parting
deprives him of the protection of the Act. Section 13(1)(e) of the Bombay Act
implies that a statutory tenant can sublet a part of the premises lawfully.
Section 15 of the Bombay Act deals not only with contractual tenants but also
with statutory tenants. The result is that the sub-letting by Maneklal of the
premises must be held to have been lawful.
(ii)The appellant was not bound by the decree
obtained by the respondent against Maneklal. It is true that a subtenant under
the general law of landlord and tenant is bound by the decree obtained by the
landlord against the tenant for possession, though he was not made a party to
the suit, but where a statue like the Bombay Act gives sub-tenant a right to
continue in possession even after determination of the tenancy of the statutory
tenant, the sub-tenant is not bound by the decree and his tenancy does not come
to an end with the tenancy of the superior tenant. A decree obtained by a
landlord against his tenant does not give him a right to evict a subtenant like
the appellant who is entitled to the benefits of s. 14 of the Act.
Section 52 of the Transfer of Property Act
cannot be resorted to by the respondents in the present case to evict the appellant.
Baker v. Turner, [1950] A. C. 401, Keeves v.
Dean, [1924] 1 K. B. 685, Roe v. Russel, [1928] 2 K. B. 117, Campbell v.
Lill, (1926) 135 L. T. 26, Vevindramuthu
Pillai v. Maya Nandan, (1920) 1. L.R.43 Mad. 696 and Yusuf v. joytish Chandra
Banerji, (1932) 1. L. R. Cal. 739, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 168 of 1963.
Appeal by special Leave from the judgment and
decree dated May 1, 1962, of the Gujarat High Court in Appeal from Order No. 46
of 1962.
I.M. Nanavati, 1. B. Dadachanji 0. C. Mathur
and Ravinder Narain, for the appellant.
S.T. Desai, M. M. Shah and I. N. Shroff, for
the respondents.
September 5, 1963. A. K. Sarkar, J. delivered
a dissenting opinion. The judgment of M. Hidayatullah and J. C. Shah, jj. was
delivered by Shah, J.
SARKAR J.-In my opinion this appeal should
succeed. The respondent landlords demised certain premises to 895 Maneklal
Mafatlal for a term of five years from March 5, 1950. The tenant continued in
possession after the expiry of the term under the protection from eviction
given by the Bombay Rents and Lodging House Rates (Control) Act, 1947 which
came into force on February 2, 1948. On April 27, 1956, the landlords filed a
suit against him for eviction for non-payment of rent and obtained a decree on
June 22, 1960. While this suit was pending the tenant sub-let a part of the
demised premises to the appellant. In execution of the decree the landlords got
possession of a small part of the premises which was in the actual occupation
of the tenant. As to the rest, the sub-tenants in possession including the
appellant resisted eviction.
The appellant in fact filed a suit against
the landlords claiming that under s. 14 of the Act it had upon the
determination of the interest of the tenant in the premises by the decree
against him become their direct tenant of the portion sub-let to it and asking
for a permanent injunction restraining the landlords from evicting it. In that
suit the appellant made an application for an interim injunction but the application
was rejected by the trial Court and an appeal therefrom, by the appellate
Court. The appellant then moved the High Court of Gujarat in revision and the
High Court confirmed the orders of the Courts below holding that after the
expiry of the term the tenant had no power of sub-letting and the appellant,
therefore, was not a subtenant and it was not entitled to any injunction. The
correctness of this judgment of the High Court is challenged in this appeal.
The protection under which the tenant in this
case stayed on after the expiry of his lease was given by sub-s. (1) of s. 12
of the Act which provides that a landlord shall not be entitled to the recovery
of possession of any premises so long as the tenant pays rent and observes and
performs the conditions of the tenancy as provided in the section. The tenant
contemplated in sub-s. (1) of s. 12 -is plainly a tenant whose had come to an
end. The Act at various places uses the word "tenant" as including
such a person and also defines the word "tenant" in s. 5(11) (b) as
including "any person remaining, after the determination of the lease, in
possession, with or without the assent of the landlord, of the premises leased
to such person . . . . "' 896 Such a person has been called a statutory
tenant and I shall also use that description for economy of expression.
The landlords contend that though by virtue
of s. 12(1) of the Act the tenant could not be evicted after the expiry of his
lease, yet he had then lost all interest in the demised premises and could not,
therefore, sub-let the same. How it may be that under the general law of
landlord and tenant, a tenant has no right to sub-let -after the expiry of the
lease but we have here a statute which has altered that law in many ways. The
power of tenant to sub-let cannot therefore be decided by reference to the
general law of landlord and tenant but the Act must be examined to see how it
affects that power. In my opinion such a power in a statutory tenant is
contemplated by the Act and in particular by cl. (e) of sub-s. (1) of s. 13.
That section lays down the circumstances in which a landlord notwithstanding
the bar in s. 12(1), can get a decree in ejectment against the tenant and the
part of it to which I wish to refer is in these terms :
S. 13. (1) "Notwithstanding anything
contained in this Act but subject to the provisions of section 15, a landlord
shall be entitled to recover possession of any premises if the Court is
satisfied........................................................................................
(e)that the tenant has, since the coming into
operation of this Act, unlawfully sub-let the whole or part of the premises or
assigned or transferred in any other manner his interest therein;" This
clause plainly contemplates a tenant sub-letting and this is not in dispute.
But it is said that the tenant here referred to is one whose lease has not
expired-whom I will for short call a contractual tenant-as to whose power to
sub-let there is no question. The reason given in support of this view is that
a statutory tenant having no interest in the premises cannot certainly assign
or transfer his interest in the demised premises and, therefore, the word
"tenant" in cl. (e) of s. 13(1) must in relation to assignment and
transfer by a tenant be understood as a contractual tenant. That being so, and
as it is unlikely that the word had been used in different meanings in the 897
same clause, it must mean only a contractual tenant in relation to sub-letting
also.
I am unable to accept this contention. The
word "tenant" has been given various meanings by the definition
clause in the Act. All those meanings must be given to that word wherever it
occurs in the Act unless the context otherwise requires. If a statutory tenant
cannot transfer or assign his interest-as to which I express no opinion-cl. (e)
of s. 13(1) cannot, of course, be contemplating him as doing so.
That, however, would not show that definition
of "tenant" as a statutory tenant would not be available for deciding
what kind of tenants were contemplated by cl. (e) when it said that a tenant
unlawfully sub-letting would be liable to eviction. In all other ,clauses in s.
13(1) the word "tenant" clearly includes both a statutory and a
contractual tenant and, therefore, the section contemplates the word
"tenant" being used in ,more than one sense. The fact that the clause
talks of ,a contractual tenant alone assigning does not provide a context
preventing-the word "tenant" when it talks of the tenant sub-letting,
as being understood in the sense of a statutory tenant.
Another contention advanced draws its force
from the word "sub-let". It proceeds on the basis that the word
" sublet" can only mean transfer of an estate. It is said -that cl.
(e) by using the word "sub-let" indicated that it did not contemplate
a statutory tenant as he could not sub-let for he had no interest in the
demised premises. No authority has been brought to our attention in support of
the contention that letting or sub-letting necessarily means transfer of estate
or property and I do not think that it is well founded. Decisions of Courts in England
to which I will later refer, have held that a statutory tenant who has no
estate or property in the demised premises, can sub-let.
When the clause talks of a statutory tenant
sub-letting, it may not be contemplating transfer ,of property. The Act
undoubtedly creates rights in the tenant in respect of the property. He can
maintain an action for trespass against anyone including the landlord,
illegally depriving him of the possession of property. He ,has at least this
interest in the property that he can require possession of, it to be delivered
to him. It is not as if his 898 right is one only of a personal action in
damages. The subletting contemplated in cl. (e) of s. 13(1) may be of' this
statutory right in the property. It would be no answer to this to say that the
right impersonal, for the right would not be personal in the strict sense if it
can be sublet. In Baker v. Turner(1) Lord Porter approved of the observation of
Scrutton L. J. in Keeves v. Dean(2) about a statutory tenant that
"Parliament has certainly called him a tenant, and he appears to me to
have something more than a personal right against his landlord".
Then it was said that under the clause
unlawful subletting as also unlawful assignment and transfer were grounds for
eviction and if the clause implied a power in the statutory tenant to lawfully
sub-let it also must equally imply in him a power to, lawfully assign or
transfer his interest in the tenancy. It was contended that since it was
impossible for a statutory tenant to assign or transfer any interest in the
premises as he had none, it would follow that he could not lawfully sub-let
either. In the first place, I do not think that the word "unlawfully"
in the clause applies to "assigned or transferred"; I think as the
clause stands it applies only to sub-letting. The Act furthermore nowhere
states what is an unlawful assignment or transfer of a tenant's interest. It
would undoubtedly have done so if it contemplated unlawful assignment or
transfer. It is significant that it specifically talks of lawful and unlawful
sub-letting in ss. 14 and 15. Nor can it be said that the unlawful assignment
or transfer contemplated by cl.
(e) is one which is against the terms of the
contract of tenancy, for it would be unnecessary to provide that an unlawful
assignment or transfer by a contractual tenant, that is, an assignment or
transfer which is contrary to the terms of the contract of tenancy, would
justify an order for possession as in such a case the protection against
eviction under s. 12(1) would have been lost by non-observance of a condition
of the tenancy. Therefore, it seems to me that the present contention of the
landlords wholly lacks foundation.
But assume I am wrong; that cl. (e)
contemplates unlawful assignment or transfer of a tenant's interest in the 1
[1950] A. C. 401, 416.
2 [1924] 1 K. B. 655, 644.
899 demised premises. A statute can well
authorise a statutory tenant to assign or transfer his interest in the demised
premises. Indeed s. 17 of the English Rent Act of 1957 provides for the
transfer of a statutory tenancy. It cannot be said that assignments or
transfers of statutory tenancies are inconceivable. It has to be remembered
that there is no authority for the proposition that a statutory tenant has no
interest in the demised premises and this is at the basis of the theory, which
I think is misconceived, that a statutory tenant cannot transfer his tenancy.
It is true that he has no estate or property in the demised premises, but that
is a different matter. He has none the less an interest, a right in the
premises occupied by him, which he may be empowered to transfer. Lastly, I am
unable to agree that because a statutory tenant cannot transfer, assuming that
to be so, that would show that the word "tenant" in cl. (e) must be
understood as referring to a contractual tenant only. I think the word must
have the meanings given in the definition including the meaning of a statutory
tenant unless the context otherwise indicates. No such indication can be said
to be present merely because the word in one part of the clause refers to a
contractual tenant only.
In Roe v. Russel, (1) the Court of appeal in
England held that s. 4(1)(h) of the Rent and Mortgage Interest (Restrictions)
Act, 1923 which provided that no order for ejectment of a tenant from a
dwelling house shall be made unless "(h) the tenant without the consent of
the landlord has.......... assigned or sub-let the whole of the dwelling house
or sub-let part of the dwelling-house, the remainder being already
sub-let", indicated that a statutory tenant had the power to sub-let a
part of the premises. In this case it had been held that the statutory tenant
had no estate or property as a tenant at all but had a purely personal right to
possess, but that did not create any difficulty in the way of the Court holding
that he had power to sub-let. All subsequent cases in England have accepted
that Roe v. Russel(1) has laid down the law correctly. I entirely agree with
that view. In Campbell v. Lill,(2), which is an earlier case and which took the
same view as Roe v., Russel,(1) the argument that s.
1 [1928] 2 K. B. 117.
(2) (1926) 135 L. T. 26.
900 4(1)(h) of the English Act of 1923 dealt
only with contractual tenants was expressly rejected on the ground that the
word meant both contractual and statutory tenants throughout the section and it
would be contrary to all canons of interpretation to give it a restricted
meaning only in cl. (h). I wish also to observe that the English provision made
an assignment by a tenant a ground for eviction but none the less the word
"tenant" was mentioned as referring to a statutory tenant. It was not
said that since the tenant contemplated was one who could assign, it must have
been that a contractual tenant only was contemplated. These arguments, it will
be remembered, were also advanced in this case.
Now the similarity between s. 13(1)(e) of the
Bombay Act and s. 4(1)(h) of the English Act is obvious. If the English
provision implied that a statutory tenant could sub-let part of the premises,
there would be no reason for saying that s.
13(1) (e) of the Bombay Act did not imply a
power in a statutory tenant to sub-let lawfully for what was penalised was only
an unlawful subletting. There is, therefore, some support for the view that I
have taken. The learned judge in the High Court did not question the
correctness of the decision in Roe v. Russel(1) but sought to distinguish it
from the present case on grounds which I have earlier discussed. I find that
case indistinguishable for the purpose of interpreting s. 13(1)(e) of the
Bombay Act.
Indeed if cl. (e) of s. 13(1) did not
contemplate subletting by a statutory tenant as the landlords contend, the
result would be most anomalous. Therefore, in my view, the Act provides a
context which indicates that the word " tenant" in that clause had
been used as including a statutory tenant. Suppose a statutory tenant does
actually sublet and he and his sub-tenant are content to carry out their
bargain, as happened in the present case, then the landlord would not be able
to take advantage of s. 13 (1) (e) and evict the tenant if the contention of
the landlords in this case is correct, for, ex hypothesi, the sub-letting by
the tenant was ineffective and, therefore, as good as not made at all. The
result would be that a contractual ten, ant subletting would forfeit the
protection under s. 12(1) 1[1928] 2 K. B. 117.
901 while a statutory tenant in fact doing so
would still be entitled to the protection of the Act. This would put a
statutory tenant in a better position than the contractual tenant. An
interpretation of the Act which leads to such a result would be most unnatural
and it is one that I am unable to accept.
It is not contended that such an anomalous
result was intended but it is said that even if the word "tenant" in
cl. (e) of s. 13(1) is understood as referring to a contractual tenant only,
there is no anomaly, for the statutory tenant would by sub-letting render himself
liable to eviction under other provisions of the Act though not under s.
13(1)(e). It was contended that a statutory tenant is entitled to protection
only so long as he remains in possession and by sub-letting the statutory
tenant would be forfeiting his right to protection under s. 12(1) of the Act.
Therefore it was said that a statutory tenant subletting would not be in a
better position than a contractual tenant doing so.
I am unable to accede to the proposition that
a statutory tenant sub-letting a part of the premises has so parted with the
possession thereof as to forfeit his claim to protection under s. 12(1). It has
to be remembered that in the present case the tenant had not parted with the
entirety of the premises bar sub-letting. In Roe v. Russel(1) it was said at p.
134, "when an individual is placed, as the statutory tenant undoubtedly
was, in the position of having an exclusive personal possession of his
premises, he is necessarily in a position in which he can place a third person
in actual possession of a part of the premises, while retaining possession of
the remainder, and that totally irrespective of whether his own right to
exclusive undisturbed possession is purely personal or amounts to something of
the nature of an estate or interest in the premises. In Campbell v. Lill(2) it
was said, "The policy of the statute is to give protection only to persons
in occupation within the meaning of the statute and it aimed at persons who had
parted with possession and such parting is deemed to have taken place if the
tenant assigns or sub-lets the whole of the premises or sub-lets part of them,
the remainder being already sub-let. In the present case (1) [1928] 2 K.B. 117.
2 [1926] 135 L. T. 26.
902 the tenant sub-let a portion only and
remained in possession of the remainder. In these circumstances, I think the
tenant is protected." Both these cases show that under the English Act, a
statutory tenant cannot be said to have parted with possession by sub-letting
part of the demised premises. It would appear that under the Bombay Act there
is even less reason for saying that a statutory tenant sub-letting a part of
the demised premises has gone out of possession of them, for I find nothing in
that Act which justifies the view that in order to be entitled to protection
the statutory tenant must himself be in possession of the entire premises. On
the other hand, the English Increase of Rent and Mortgage Interest
(Restrictions) Act, 1920 by sub-s. (1) of s. 15 provided that "a tenant
who by virtue of the provisions of this Act retains possession of any
dwelling-house........
shall, so long as he retains possession,
observe and be entitled to the benefit of all the terms and conditions of the
original contract of tenancy". Notwithstanding this the view in England
has been that parting with possession of a portion of the demised premises by
way of sub-letting does not deprive a tenant his protection under the Act. I do
not find any such express provision in our Act regarding a statutory tenant's possession
of the premises. If the Act contemplated a statutory tenant sub-letting-and
that is the basis on which I am examining the effect of sub-letting under s.
12(1) it cannot by providing that by doing so, he would be so far out of
possession as to cease to be entitled to the protection of the Act. Such an
interpretation of the Act would result in one part of the Act contradicting
another and would be wholly unacceptable. I find no justification in any case
for the view that subletting by a statutory tenant of a part of the demised
premises results in a parting with possession of the premises or that such
parting deprives him of the protection of the Act. I think that s. 13(1)(e)
clearly indicates that a statutory tenant has the power to sub-let.
I now set out s. 14 of the Act on which the
claim of the appellant is based.
S.14. "Where the interest of a tenant of
any premises is determined for any reason, any sub-tenant 903 to whom the
premises or any part thereof have been lawfully sub-let before the commencement
of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment)
Ordinance, 1959 shall, subject to the provisions of this Act, be deemed to
become the tenant of the landlord on the same terms and conditions as he would
have held from the tenant if the tenancy had continued." It is not in
dispute that the sub-letting took place before the date mentioned in this
section. It was contended that the word "interest" in the section
showed that it contemplated only sub-letting by a contractual tenant. I am
unable to agree for reasons earlier set out. As I have already said, a
statutory tenant has an interest in the premises and when the section talks of
the interest of a tenant being determined, it obviously means in the case of a
statutory tenant, determined by a decree or by such a tenant giving up the
protection of the Act. In this case the interest of the tenant was determined
by the decree that was passed against him. I may here state that the Ordinance
mentioned in the section came into force on May 21, 1959.
I, therefore, find that the appellant became
a subtenant before the date mentioned in s. 14 and the interest of the tenant
who sub-let to it had been determined. The appellant has however still to prove
that "the premises had been lawfully sub-let to it. The only provision in
the Act which declares a sub-letting to be unlawful is s. 15. That section is
in these terms :
S.15. (1) Notwithstanding, anything contained
in any law, but subject to any contract to the contrary, it shall not be lawful
after the coming into operation of this Act for any tenant to sub-let the whole
or any part of the premises let to him or to assign or transfer in any other
manner his interest therein :
Provided that the State Government may, by
notification in the Official Gazette, permit in any area the transfer of
interest in premises held under such leases or class of leases and to such
extent as may be specified in the notification.
(2)Notwithstanding anything contained in any
judgment, decree or order of a Court or any contract, 904 the bar against
sub-letting, assignment or transfer of premises contained in subsection (1) or
in any contract shall, in respect of such sub-lessees, assignees or transferees
as have entered into possession despite the bar before the commencement of the
Bombay Rents, Hotel and Lodging House Rates Control -(Amendment) Ordinance,
1959 and as continue in possession at such commencement, have no effect and be
deemed never to have had any effect.
It is said that the section is confined only
to contractual tenancies. The argument is that sub-s. (1) makes subletting by
contractual tenants after the date mentioned unlawful excepting where the
contract otherwise provides and that sub-s. (2) saves from this illegality
certain varieties of sub-lettings by the tenants. It is however not in dispute
that if the section applies to sub-lettings by statutory tenants, then the
present sub-letting to the appellant would be saved by sub-s. (2).
It is said that the words "but subject
to any contract to the contrary" in sub-s. (1) of s. 15 show that that
section was intended to refer to sub-lettings by contractual tenants only. It
seems to me that even if those words are applicable only when a contractual
tenant sub-lets, as to which I have some doubts, that would not lead to the
conclusion that the tenant there referred to is only a contractual tenant.
Those words would only be applicable where a covenant permitting sub-letting is
contained in the lease.
Take a case of a contractual tenant where the
lease contains no covenant permitting him to sub-let. In such a case those
words would have no application even though the tenant is a contractual tenant.
Therefore where there is no contract about granting of sub-leases, the section
may still be applicable and in such a case there would be no reason to support
the view that it is concerned with a contractual tenant only. The section would
have to be interpreted in such a case without reference to the words in
question. It would then surely apply to a statutory tenant who, as I have said,
can sub-let. It cannot therefore be said that s. 15 deals only with a
contractual tenant.
But what happens if s. 15 does not apply to a
statutory tenant? It was said that that would then show that 905 a statutory
tenant cannot at all sub-let. If apart from s. 15, the proper reading of the
Act is, as I have earlier said, that a statutory tenant has the power to
sub-let, I do not see that this section would provide a ground sufficiently
strong to outweigh all the considerations which have led me to that view. The
only result then, if s. 15 applies to a contractual tenant alone, would be that
a subletting by a tenant would not have been made unlawful by the section. If
that is so, then also the appellant's claim under s. 14 would become un-challengeable.
Whatever view is taken of s. 15, it is impossible to say that the section makes
the sub-letting to the appellant in the present case unlawful. It is
unnecessary to go into any question of the Act contemplating a sub-letting
which was unlawful for reasons other than those mentioned in it, for it has not
been contended that the sub-letting in the present case was for any such reason
unlawful. The result is that the sub-letting to the appellant must be held to
have been lawful.
One other matter remains to be dealt with. It
was said, and this is not in dispute, that the sub-letting to the appellant
took place after the landlords had filed their suit against the tenant which
resulted in a decree for ejectment to which I have earlier referred. It was contended
that the appellant was, therefore, bound by the decree in view of s. 52 of the
Transfer of Property Act. On behalf of the appellant it was said that that
section was amended so far as Bombay was concerned by Bombay Act 14 of 1939 and
the amended section required certain notice to be given before the sub-letting
could be affected by the principle of lis pendent stated in the section. I do
not think it necessary to deal with this contention for in my view, even s. 52
as it stands in the Transfer of Property Act without any amendment does not
affect the sub-letting in this case.
The first thing that I wish to point out is
that, that section does not make any transfer of property illegal.
Therefore, the section does not justify the
view that the subletting to the, appellant, assuming it was a transfer of
property, as to which doubts may legitimately arise, was. in any way unlawful
or invalid. If any authority is needed for this proposition, reference may be
made to Veyin58-2 S C India/64 906 dramuthu Pillai v. Maya Nandan.(1) All that
s. 52 does is to provide that pending a litigation concerning property, the
property cannot be transferred so as to affect the rights of any party thereto
under the decree that may be passed in the suit. The only effect then of the
section is that the rights of the decree-holder under the decree are not to be
affected by the transfer.
Now the rights of a landlord who gets a
decree for possession of property against his tenant are those mentioned in 0.
21, r. 35 of the Code, namely, to obtain delivery of it "if necessary, by
removing any person bound by the decree who refuses to vacate the
property". It is true that a sub-tenant under the general law of landlord
and tenant is a person bound by the decree obtained by the landlord against the
tenant for possession, though he was not made a party to the suit. The reason
for this is that the sub-tenant's right to remain in possession came to an end
with the determination of the tenancy of the tenant :
see Yusuf v. lyotish Chandra Banerji(2).
Where however a statute like the Act in the present case gives the subtenant a
right to continue in possession even after the determination of the tenancy of
the superior tenant, he would not be a person bound by the decree for his
tenancy has not come to an end with the tenancy of the superior tenant. A
sub-tenant to whom the premises were lawfully sub-let, would under s. 14 of the
Act be such a person.
That being so, a decree obtained by a
landlord against his tenant does not give him a right to evict a sub-tenant who
is entitled to the benefit of s. 14. Section 52 could not be resorted to by the
landlords in the present case to evict the appellant.
I would for these reasons allow the appeal.
SHAH, J.-A lease of the ground and the first
floors of a building named 'Anand Bhavan' in the town of Ahmedabad was granted
by the trustees of the trust named "Anandji Kalyanji Pedhi" to one
Maneklal, for five years commencing from March 5, 1950 at a monthly rental of
Rs. 2,000/. A suit instituted by the trustees in the Court of Small Causes
(which is the Court competent under (1) (1920) I.L.R. 43 Mad. 696. (2) (1932)
I.L.R. 59 Cal. 907 s.28 of the Bombay Rents, Hotel and Lodging House Rates
Control Act 57 of 1947-hereinafter called 'the Act'-to entertain the suit)
against Maneklal after the expiration of the period of the lease for a decree
in ejectment and for arrears of rent was decreed on June 22, 1960. In execution
of the decree the trustees obtained possession of the first floor but were
obstructed as to the rest by a private limited company called-"Anand Nivas
Private Ltd."-and two others who claimed to be sub-Iessees from Maneklal
and thereby to have acquired rights of tenancy of the ground floor upon the
determination of the tenancy of Maneklal.
Anand Nivas Private Ltd-which will
hereinafter be called 'the Company'-filed Suit No. 2814 in the Court of Small
Causes at Ahmedabad for a declaration that it was not bound to deliver
possession of the premises in its occupation in execution of the decree in the
suit filed by the trustees against Maneklal and for an induction restraining
the trustees from enforcing the decree. The Company's application for an in junction
restraining the trustees from obtaining possession in enforcement of the decree
obtained by them against the tenant was dismissed by the Court of First
Instance. In appeal against that order the District Judge, Ahmadabad refused an
interim injuction restraining the trustees from executing the decree pending the
hearing and disposal of the appeal. The High Court of Gujarat was then moved
against that order by a petition invoking its revisional jurisdiction. At the
hearing, die petition was, by order of the Court, converted into an appeal from
order refusing to grant an in juction. The High Court dismissed the appeal
holding that a "statutory tenant" remaining in possession after
determination of his contractual tenancy was in law not competent to sublet the
premises in whole or in part and a person claiming to be a sub-tenant from a
statutory tenant could not effectively plead the protection of s. 14 of the Act
as amended by Ordinance III of 1959 or Bombay Act 49 of 1959. With special
leave, the Company has appealed to this Court.
The Company sets up its claim to protect its
possession on the, plea that it had acquired die , rights of a 908 tenant by
virtue of s. 14 of the Act. This plea is supported on two grounds :
(i)that the contract of tenancy in favour of
the tenant expressly authorised him to sublet, and the tenant having lawfully
sublet the premises the Company acquired on the determination of the interest
of the tenant the rights of a tenant under the landlord; and (ii)in any event,
on the -determination of the statutory tenancy of the tenant by virtue of
Ordinance III of 1959 issued by the Governor of Bombay, retrospectively
amending s. 15 of the Act the Company acquired the rights of a tenant under the
landlord.
In the view of the High Court clause (i) of
the lease restricted "the ordinary rights of the tenant to sublet under s.
108(j) of the Transfer of Property Act", and cannot be interpreted as
conferring any right on the tenant to sublet, because it "postulates the
existence of a right to sublet, and provides for restrictions on the exercise
of such right". Whether the covenant in the lease authorised or recognised
the power of subletting in the tenant before the period of the lease expired,
need not be decided in this appeal. It is common ground that after the
expiration of the period of the lease, no extension of or fresh lease was
granted to the tenant, and he could set up only such rights as the Act granted
or recognised.
Sub-section (1) of s. 12 of the Act provides
"A landlord shall not be entitled to the recovery of possession of any
premises so long as the tenant pays, or is ready and willing to pay, the amount
of the standard rent and permitted increases, if any, and observes and performs
the other conditions of the tenancy, in so far as they are consistent with the
provisions of this Act." For the protection of tenants the clause imposes
a prohibition against the landlord against recovery of possession of the
premises demised to a tenant so long as he pays or is ready and willing to pay
the standard rent and permitted increases and also observes and performs the
other conditions of the tenancy consistent with the provisions of the Act. A
person remaining in occupation of the premises let to him after the
determination of or expiry of the period of the tenancy is commonly though in
law not accurately, called a "statutory tenant. Such a person is not a
tenant at all: he has no estate or interest in the premises occupied by him. He
has merely the protection of the statute in that he cannot be turned out so
long as he pays the standard rent and permitted increases, if any, and performs
the other conditions of the tenancy. His right to remain in possession after
the determination of the contractual tenancy is personal: it is not capable of
being transferred or assigned, and devolves on Ms death only in the manner
provided by the statute. The right of a lessee from a landlord on the other
hand is an estate or interest in the premises and in the absence of a contract
to the contrary is transferable and the premises may be sublet by him. But with
the determination of the lease, unless the tenant acquires the right of a
tenant holding over, by acceptance of rent or by assent to his continuing in
possession by the landlord, the terms and conditions of the lease are
extinguished, and the rights of such a person remaining in possession are
governed by the statute alone.
Section 12(1) of the Act merely recognises
his right to remain in possession so long as he pays or is ready and willing to
pay the standard rent and permitted increases and performs the other conditions
of the tenancy, but not the right to enforce the terms and conditions of the
original tenancy after it is determined. On a matter of interpretation of s.
12(1) the decisions of the King's Bench Division of the High Court in England,
viz. Roe v. Russel(1) and Lewis v. Reeves(2), on which reliance was placed by
the appellant are of little assistance. Those cases were decided on the
interpretation of the relevant provisions of the Increase of Rent and Mortgage
Interest (Restriction) Act, 1920 (10 & 11, Geo. 5 Ch. 17), and particularly
of s. 15(1).
In Roe v. Russel(1) the question whether a
statutory tenant of a dwelling-house holding upon terms which do not prohibit
subletting, may sublet part of the dwelling house, fell to be determined, and
the Court held that a right to sublet a part of the premises provided the
remainder was not already sublet could be claimed by a (1) [1928] 2 K.B. 117.
(2) [1951] 2 All E.R. 855.
910 statutory tenant relying upon the
"terms and conditions" of the original contract of tenancy. A similar
view was also taken in Lewis v. Reeves(1). In that case the widow of a
statutory tenant remaining in possession, sublet a part of the premises in her
occupation. It was held that on the death of the widow the sub-tenant became
the direct tenant of the landlord, because subletting of a part of the premises
by the widow of a statutory tenant who acquired all the rights under s.
12(1)(g) of the Rent Act (10 & 11 Geo. 5 Ch.17) was lawful.
But these cases were decided on the
interpretation of s. 15(1) of the Act of 1920, which insofar as it is relevant,
provided :
"A tenant who by virtue of the
provisions of this Act retains possession of any dwelling-house to which this
Act applies shall, so long as he retains possession, observe and be entitled to
the benefit of all the terms and conditions of the original contract of
tenancy, so far as the same are consistent with the provisions of this Act, and
* * * " The terms of s. 15(1) of the Increase of Rent and Mortgage Interest
(Restriction) Act, 1920, differ materially from sub-s. (1) of s. 12 of Bombay
Act 57 of 1947. Whereas a tenant who retains possession, and is protected by
virtue of the provisions of the English Rent Act is entitled, so long as he
retains possession, to the benefit of all the terms and conditions of the
original contract of tenancy so far as they are consistent with the provisions
of the Act, the Bombay Act merely grants conditional protection to a statutory
tenant and does not invest him with the right to enforce the benefit of any of
the terms and conditions of the original tenancy. This difference in the
phraseology of the two enactments is vital to the matter under discussion, and
we are unable to hold-assuming that the tenant was entitled to sublet the premises
under the terms of the Lease-that he could, relying upon s. 12(1), exercise the
right to sublet granted under the lease after he became a statutory tenant. The
first ground on which the claim was founded by the Company must therefore fail.
(1) [1951] 2 All. E.R. 855.
911 The second ground on which the Company
claimed to be a lawful tenant of the trustees cannot also be sustained. In the
High Court it was common ground between the parties that the tenant continued
to remain in possession after March 5, 1955 of the premises leased to him not
because of any renewal or grant of a fresh tenancy, but in virtue of the
protection afforded to him by, the Act as a 'statutory tenant'. As a statutory
tenant he had no estate or interest capable of being assigned or transferred,
and his statutory right to occupy could not in law be sublet, because a lawful
subletting postulates a right: to enjoy the property and a right to transfer
the same to another. There can be no subletting when there is no right in the
premises especially when the statutory tenancy ceases when the tenant parts
with possession. The decision of the Calcutta High Court in Krishna Prosad Bose
v. Sm. Sarajubala Dassi(1) on which reliance was placed by the Company in
support of its plea that a statutory tenant is entitled to sublet the premises
in his occupation does riot assist the argument. The West Bengal Premises Rent
Control (Temporary Provisions) Act, 1950, recognises the right of a statutory
tenant to sublet.
Section 12(1) of the West Bengal Act provides
that notwithstanding anything to the contrary in any other Act or law, no order
or decree for the recovery of possession of any premises shall be made by any
court in favour of the landlord against a tenant, including a tenant whose
lease has expired. By the proviso it is enacted that nothing in the sub-section
shall apply to any suit for a decree for such recovery of possession against a
tenant who has sublet the whole or a major portion of the premises for more
than seven consecutive months provided that if a tenant who has sublet the
major portion of the premises agrees to possess as a tenant the portion of the
premises not sublet on payment of rent fixed by the Court, the Court shall pass
a decree for ejectment from only a portion of the premises sublet and fix
proportionately fair rent for the portion kept in possession of such tenant. By
sub-s. (2) of s. 13 it is provided, in so far as it is material, that where any
premises or any part thereof have been or has been sublet by a tenant of the
first degree, if the tenancy of such tenant (1) A.I.R. 1961 Cal. 505.
912 is lawfully determined otherwise than by
virtue of a decree in a suit obtained by the landlord by reason of any of the
ground specified in clause (h) of the proviso to sub-section (1) of section 12,
the sub-lessee shall be deemed to be a tenant in respect of such premises or
part, as the case may be, holding directly under the landlord for the tenant
whose tenancy has been determined. In Krishna prosad Bose's case(1) Sinha, J.,
set out certain principles governing the position of a statutory tenant of
which the seventh set out below is material :
"Although a statutory tenant has no
estate, and although his right is a personal right, he can sublet, provided the
right of subletting can be spelt out from the Rent Act in operation, either
from its express terms or by necessary implication. The sub-tenant will get
only such rights as are conferred by the statute" and observed that the
right of the statutory tenant to sublet was clearly recognized by s. 13(2), and
the right of a sub-tenant to become a direct tenant under the owner in certain
circumstances was expressly provided for. We are not concerned in this case to
decide whether the provisions of the Act were correctly interpreted by the
Court: 'it may be sufficient to observe in this case that the Court in Krishna
Prosad's case (1) held that the right of a statutory tenant to sublet was
recognised by the statute which afforded him protection.
But it was urged that by Ordinance III of 1959
a right to sublet premises in the occupation of a statutory tenant was invested
retrospectively since the commencement of the parent Act. It is common ground
that the tenant purported to sublet a part of the premises in his occupation
after the trustees instituted a suit in ejectment against him, and before
Ordinance III of 1959 was promulgated. The Company has claimed the right of a
subtenant on the second ground relying upon the Ordinance, ,and it would be
necessary to consider the material statutory provisions as amended by the
Ordinance.
Section 5(11) as amended defines a
"tenant" as meaning :
(1) A.I.R. 1961 Cal. 505.
913 "any person by whom or on whose
account rent is payable for any premises and includes(a) such sub-tenants and
other persons as have derived title under a tenant before the commencement of
the Bombay Rents Hotel and Lodging House Rates Control (Amendment) Ordinance,
1959;
(a ) any person to whom interest in premises
has been transferred under the proviso to subsection (1) of section 15;
(b) any person remaining, after the
determination of the lease, in possession, with or without the assent of the
landlord, of the premises leased to such person or Ms predecessor who has
derived title before the commencement of the Bombay Rents, Hotel Lodging House
Rates Control (Amendment) Ordinance, 1959;
(c) any member of the tenant's family
residing with him at the time of his death as may be decided in default of
agreement by the Court." The expression "tenant" in the
different clauses is defined to mean a contractual tenant or a statutory tenant
or both.
In the principal definition the expression
"tenant" means only a person who is a contractual tenant because rent
is payable by a contractual tenant and not by a statutory tenant. By cl. (a)
sub-tenants and other persons who have derived title under a tenant before the
commencement of the Ordinance III of 1959 would be regarded as tenants. These
would be sub lessees, transferees or assignees of contractual tenants.
Similarly by cl. (a) persons to whom interest in premises has been transferred
in virtue of a notification issued by the State Government permitting in any
area the transfer of interest in premises held under such leases or class of
leases and to such extent as may be specified in the notification, would be
transferees of contractual tenants. Clause (b) contemplates a tenant holding
over and a statutory tenant alike; it takes in a person remaining in occupation
with or without the assent of the landlord, when the premises were let to him
or to Ms predecessor before the commencement of the Ordinance. Clause (c)
includes in the definition the members of the family of a tenant-statutory or
contractual residing with him at the time of his death, as may 914 be decided
in default by agreement by the Court. Having regard to the plurality of its
meaning, the sense in which the expression is used in different sections, and
even clauses, must be ascertained from the context of the scheme of the Act;
the language of the provision and the object intended to be served thereby.
In sub-s. (1) of s. 12 which imposes a
prohibition against a landlord recovering possession of premises, the
expression "tenant" must of necessity mean a statutory tenant and not
a contractual tenant, for unless the contractual tenancy is determined, the
landlord has no right to recover possession.
Section 13(1)(e), in so far as it is
material, provides that :
"Notwithstanding anything contained in
this Act, but subject to the provisions of section 15, a landlord shall be
entitled to recover possession of any premises if the Court is satisfied(e)
that the tenant has, since the coming into operation of this Act, unlawfully
sublet the whole or part of the premises or assigned or transferred in any
other manner his interest therein;" In this clause the expression
"tenant" apparently-means a contractual tenant, for it authorises a
landlord to recover possession of premises if the tenant has unlawfully assigned,
transferred his interest in the premises or has unlawfully sublet the premises.
A statutory tenant has no interest in the premises occupied by him, and he has
no estate to assign or transfer. To read the clause as meaning that an
assignment or transfer of any premises which attracts liability to eviction
would be only in respect of a contractual tenancy whereas subletting which
invites that penalty may be in respect of tenancies-contractual and statutory
alike, would be to attribute to the Legislature an intention to impute two
different meanings to the expression " tenant" in cl. (e) of s.
13(1). By cl. (e) the Legislature has recognised the right of a landlord to recover
possession if the tenant has without being so authorised by contract, sublet in
whole or in part the premises, or assigned or transferred in any other manner
his interest therein. The adverb "unlawfully" qualifies all the three
verbs-sublet, assigned and transferred. That is clear from 915 the terms of s.
15(1) which prohibits "subject to any contract to the contrary"
subletting of premises or assignment or transfer of interest therein.
Section 15(1) provides :
"Notwithstanding anything contained in
any law, but subject to any contract to the contrary, it shall not be lawful
after the coming into operation of this Act for any tenant to sub-let the whole
or any part of the premises let to him or to assign or transfer in any other
manner his interest therein :
Provided that the State Government may, by
notification in the Official Gazette, permit in any area the transfer of
interest in premises held under such leases or class of leases and to such
extent as may be specified in the notification." By cl. (1) of s. 15 all
transfers and assignments of interest in the premises, and subletting of
premises, by tenants are, subject to any contract to the contrary, made
unlawful. The clause however saves contracts to the contrary and to be
effective can operate only in favour of contractual tenants. A statutory tenant
having no interest in the property, it was plainly unnecessary to prohibit
transfer of what was ineffective. Nor can there be letting of the premises by a
statutory tenant, for letting postulates a transfer of the right to enjoy
property made for a certain time, express or implied, in consideration of price
paid or promised and a statutory tenant has merely a personal right to resist
eviction. Section 15(1) therefore applies only to contractual tenants. The
proviso to the clause also furnishes an indication to that effect for the
exemption which the Provincial Government may grant can only be in respect of
leases or a class of lease.(. Subsection(2) is in terms an exception to
sub-s.(1). It provides that :
"Notwithstanding anything contained in
any judgment, decree or order of a Court or any contract. the bar against
subletting, assignment or transfer of premises contained in subsection (1) or
in any contract shall, in respect of such sub-lessees , assignees or
transferees as have entered into possession despite the bar before the
commencement of the Bombay Rents, Hotel and Lodging House Rates Control
(Amendment) Ordinance, 1959 and as continue in possession at such 916
commencement, have no effect and be deemed never to have had any effect."
The exception clause could manifestly not apply to statutory tenancies when the
principal clause applied only to contractual tenancies. The effect of the
clause is to validate assignments, transfers and sub-tenancies granted by
contractual tenants, despite the prohibition contained in sub-s. (1) or even in
the contract of tenancy, and this validation is effective, notwithstanding any
judgment, decree or order of a Court. The sub-section is plainly retrospective,
and protects sub-tenants of contractual tenants and removes the bar against
sub-letting by sub-s.(1) as well as by contract, provided that the transferee
is in possession at the commencement of the Ordinance.
The argument that by restricting the
operation of s. 13(1)(e) to contractual tenants subletting by statutory tenants
would be protected, is without force, Sections 12 and 13(1) have to be read
together. Clause (e) of s. 13(1) entitles a landlord to obtain possession,
where a contractual tenant has during the subsistence of the tenancy sublet the
premises or assigned or transferred his interest therein. Where a statutory
tenant has purported to sublet the premises, or has purported to assign or
transfer his interest therein, and in pursuance of such a transaction parted
with possession, he would forthwith forfeit the protection which the statute
accords to him by s. 12(1).
In the light of this legal position the claim
of the Company founded on s. 14 may be considered. The section enacts :
"Where the interest of a tenant of any
premises is determined for any reason, any sub-tenant to whom the premises or
any part thereof have been lawfully sublet before the commencement of the
Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance,
1959, shall, subject to the provisions of this Act, be deemed to become the
tenant of the landlord on the same terms and conditions as he would have held
from the tenant if the tenancy had continued." There is abundant
indication in the section that it applies to contractual tenancies alone. In
the first instance it speaks of the interest of the tenant and determination of
917 that interest. It then invests a sub-tenant to whom the premises have been
lawfully sublet before the date of the Ordinance with the rights of a tenant of
the landlord on the same terms and conditions as he would have held from the
tenant if the tenancy had continued. The subletting to be lawful must be
permitted by contract, or validated by sub-s. (2) of s. 15. The object of s. 14
is to protect subtenants. By that section forfeiture of the rights of the
tenant in any of the contingencies set out in s. 13 does not in all cases
destroy the protection to the sub-tenants. The protection which a sub-tenant is
entitled to claim against his own landlord (that is the head tenant) becomes on
determination of the head tenancy available to him against the head landlord,
but the condition on which such a claim may be sustained is that there is a
lawful subletting. A statutory tenant is, as we have already observed, a person
who on determination of his contractual right, is permitted to remain in
occupation so long as he observes and performs the conditions of the tenancy
and pays the standard rent and permitted increases. His personal right of
occupation is incapable of being transferred or assigned, and he having no
interest in the property there is no estate on which subletting may operate. If
it be assumed that a statutory tenant has the right of subletting, some very
surprising consequences may ensue. A statutory tenant by parting with
possession of the premises would forfeit all rights in the premises occupied by
him, but he would still, if s. 14 is construed as suggested by the Company, be
able to create an interest in the person inducted in the premises not
derivatively but independently, for the statutory tenant had no interest in the
premises and the protection granted by the statute is by the very act of
transfer of possession extinguished. Again even though the sub-tenant of a
statutory tenant may not be protected, because the bar against such subletting
is not effectively removed by s. 15(2), he would still be entitled to claim the
rights of a tenant under s. 14 on determination of the tenancy of the head
tenant. Having regard to these considerations there can be little doubt that a
sub lessee from a statutory tenant under the Act acquires no right of a tenant
in the premises occupied by him.
918 Even under the Increase of Rent and
Mortgage Interest (Restriction) Act, 1920, protection was accorded to the subtenant
of a part of the premises occupied by a statutory tenant : when the statutory
tenant parted with possession of the entirety of the premises occupied by him
either by one subletting or more or by subletting of part and surrendered of
the rest of the premises, the persons claiming a right of occupation
derivatively from the statutory tenant had no protection : Solomon v.
Orwell(1). In that case a statutory tenant of a dwelling-house bad sublet a
part of the house, vacated the premises in her occupation by removing herself
there from. The landlord then filed a suit against the subtenant who had
remained in possession of a part sublet to her. The subtenant submitted that
after the surrender of the statutory tenancy, she was entitled to the same
rights against the landlord as the statutory tenant had and therefore her
tenancy could not be terminated by merely giving a notice to quit. This
contention was rejected by the Court holding that "a statutory tenant had
no interest capable of existing in law as an estate, but merely a statutory
right of occupation which could not be the subject of surrender at common law,
and, therefore, when the tenant vacated the premises the sub-tenant's right of
occupation automatically came to an end." We therefore hold that before
the date of the institution of the suit, Manekal as a statutory tenant had no
right to sublet the premises and the Company acquired no right of a tenant on
the determination of the tenant's right by virtue of s. 14 of the Act.
One more argument remains to be considered.
It was urged-on the assumption that a statutory tenant has an interest in the
property occupied by him, and that by purporting to sublet he transferred that
interest-that the doctrine of 'utlite pendente nihil innovetur' enunciated in
s. 52 of the Transfer of Property Act did not operate against the Company and
the Company was not bound by the decree obtained against the tenant. Reliance
in support of that plea was placed upon the Transfer of Property Act and the
Indian Registration (Bombay Amendment) Act, XIV of 1939. By this Act the rule
of 'Lis Pendens' applies only when a notice of the pendency [1954] 1 All E.R.
874.
919 of the suit in which any right to
immoveable property is directly and specifically in question, is registered
under s. 18 of the Registration Act. The Act is somewhat clumsily worded : it
applies not to proceedings in Court but to notices in respect of suits or
proceedings. But the reason for the method of drafting adopted is not far to
seek.
Condition of registration of notice relating
to the suit is only to apply where the suit is in respect of property situate
in the area to which the Act is extended. A suit relating to immoveable
property may, in certain circumstances, lie in a Court other than the Court
within the territorial jurisdiction whereof it is situate (e.g. under cl. 12 of
the Letters Patent and s. 17 Code of Civil Procedure) and it appears that the
Legislature intended to make the Act applicable only to transfers of title to immoveable
only in areas where the litigants were sufficiently sophisticated to understand
the importance of registration.
As Bombay Act XIV of 1939, it intended to
apply to the situs of immoveable property and not the Court proceeding,
application of the rule of 'Lis Pendens' is, in respect of proceedings relating
to immoveable properties situate in certain areas, made conditional upon the
registration of the notice of the pendency of the suit.
But this Act did not apply to the suit filed
by the trustees. The Act by s. 2 applies only to notices in respect of suits or
proceedings which relate to immoveable property situate wholly or partly in
Greater Bombay. By the proviso to s. 2 it may be extended by the Provincial
Government by notification to notices relating to immoveable properties situate
wholly or partly in such other areas as may be specified. The suit was filed by
the trustees in the Court of Small Causes at Ahmadabad and our attention has
not been invited to any notification issued by the appropriate Provincial
Government extending the Act to notices relating to immovable properties in
areas outside Greater Bombay.
Whereas the rule of 'Lis Pendens' under the
Transfer of Property Act applies to all suits and proceedings which are not
collusive in which the right to immoveable property is directly and
specifically in question, by virtue of the amended Act the rule applies in proceedings
relating to immoveable property in the areas notified, only if a notice of suit
is registered, and from the date of registration. The section in terms applies
only to notices in respect of suits or proceedings which relate to immoveable
property in the Greater Bombay Area-it does not apply to any suits in which
property in Greater Bombay is not the subject-matter in dispute.
The Transfer of Property (Bombay Provision
for Uniformity and Amendment) Act, 57 of 1959, does not also assist the Company.
By that Act, amongst other things, uniformity in the provisions of the Transfer
of Property Act as amended in its application to the State of Bombay as it
existed after the enactment of the States Re-organisation Act 1956, was sought
to be achieved. Section 3 of the Act enacted that the provisions of Bombay Act
XIV of 1939 which amended the Transfer of Property Act in its application to
the pre-reorganized State of Bombay, were extended to and shall apply to that
part of the State to which they did not apply immediately before the
commencement of that Act. Enactment of this Act was necessitated because of s.
119 of the States Reorganization Act, 1956, which continued, notwithstanding the
formation of the new States, the territorial extent of the laws previously in
operation. It was found expedient to secure uniformity of the laws in the
State, and therefore it was enacted by the State Legislature that one of the
conditions of the applicability of the rule of 'Lis Pendens' was that notice of
a suit or proceeding in which any right to immoveable property within the area
notified under s. 2 of Act XIV of 1939, is directly and specifically in
question, is registered under s. 18 of the Registration Act. The decree in the
suit filed by the trustees against Maneklal was therefore enforceable against
the Company.
The appeal fails and is dismissed with costs.
ORDER BY COURT The appeal is dismissed with
costs. On the Appellant's undertaking to vacate and deliver possession of the
property within one month from today, execution of the decree obtained by the
Respondent in Suit No. 707 of 1956 against Maneklal Mafatlal, is stayed for one
month. September 5, 1963.
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