Sardar Tota Singh Vs. M/S Gold Field
Leather Works, Bombay [1985] INSC 4 (15 January 1985)
PATHAK, R.S. PATHAK, R.S.
VENKATARAMIAH, E.S. (J) ERADI, V. BALAKRISHNA
(J)
CITATION: 1985 AIR 507 1985 SCR (2) 563 1985
SCC (1) 414 1985 SCALE (1)22
ACT:
Bombay Rents, Hotels and Lodging House Rates
Control Act, 1947 Section 15 (2)-Scope of.
Validation of sub-letting by the 1959
Ordinance Whether sub-tenancies permitted by contract between landlord and
tenant are included.
A building was let out to the respondent
partnership firm, who sublet a portion of a shop on the ground floor to one
Manek Chand which was further sub-let by the latter to the appellant in 1952.
HEADNOTE:
The respondent filed a suit in 1962 against
the subtenant for possession of the premises on the ground of unlawful
subletting and carrying out unauthorised structural alterations. The sub-tenant
resisted the suit and filed a written statement. During the pendency of the
suit the appellant applied to the Court for being added as a defendant but the
application was opposed by the respondent and was rejected. The respondent's
suit was ultimately decreed for possession in accordance with a compromise
between the parties.
The appellant thereafter filed a suit in 1966
for a declaration that he was a lawful tenant in possession of the premises and
for an injunction the restraining respondent from executing the decree he had
obtained against the sub- tenant. It was pleaded that he was in occupation and
exclusive possession as a lawful subtenant for more than fifteen years to the
knowledge of the respondent and that the decree in the respondent's suit was a
collusive one and that he had become a direct tenant of the respondent under s.
14 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The respondent filed a written statement and
pleaded that they were tenants of the entire building and that they had sublet
a portion of the premises to a sub-tenant who could not sub-let the premises
further to the appellant and therefore the appellant's subtenancy was invalid.
564 The Court of Small Causes decreed the
suit. The respondent filed an appeal before the Appellate Bench of the Court of
Small Causes which dismissed the appeal and affirmed the trial judge's finding
that the premises had been sublet by Manekchand to the appellant, and that on
May 21, 1959 when the Bombay Rents, Hotel and Lodging House Rates Control
(Amendment) Ordinance 1959 was promulgated and sub-s.(2) of s. 15 was
introduced into the Bombay Rent Act the subtenant was not in possession. the
Appellate Bench rejected the submission of the appellant that he had paid rent
directly to the respondent and therefore had been accepted as a tenant. It
found that no rent had been paid by the appellant to the respondent after Manek
Chand statutory tenancy which followed the termination of his contractual
tenancy by service of notice had itself been terminated by the decree for
possession in the respondent's suit. It further held that as the appellant was
undisputably in possession on May 21, 1959, the sub-tenancy in his favor by
Maneck Chand must be deemed to be a valid sub-tenancy and followed the view in
Josephy Santa Vincent v. Ambico Industries. 70 Bombay LR 224 while dismissing
the respondent's appeal.
The respondent filed a Special Civil
Application in the High Court and the High Court set aside the order of the
Appellate Bench and dismissed the appellant's suit, taking the view that having
regard to certain observations made in Jai Singh Moraji & Ors v. M/s.
Sovani Pvt Ltd. & Ors [1973] 2 SCR 603, an extended construction of sub-s.
(2) of s. 15 of the Bombay Rent Act so as to include a sub-tenancy created by a
sub-tenant was not justified.
In the appeal to this Court, on the question
whether the appellant could rightly claim tenancy rights in the premises and
therefore nullify the enforcement as against him of the decree in the
respondent's suit.
Allowing the Appeal, ^
HELD: 1. There can be no doubt that upon the
amendment of sub-s. (I) of s.l5 by the Bombay Rents, Hotel and Lodging House
Rates Control Amendment Ordinance 1959, which was brought into force on May 21,
1959 and by its related Act, the prohibition against sub-letting did not
operate in those cases, where the sub-letting was permitted by contract between
the landlord and tenant. In all such cases, if the landlord had permitted the
tenant under a contract between them to sub-let the premises, no question would
arise of a need to validate those subtenancies. The relevant amendment in
sub-s. (1) of s.15 was deemed to have always been part of the sub-section.
[569C-D]
2. Sub-s. (2) of s.l5 raises the ban from all
sub- letting effected before May 21, 1959, the date of commencement of the
Ordinance, provided the provisions of that sub-section are fulfilled. Any such
sublease shall be deemed to be valid provided the sublessee has entered into
possession before the date of commencement of the Ordinance and has continued
in possession on such date. This is an special provision and marks a departure
from the general law. It does not refer to sub-tenancies which are permitted by
contract between the landlord and the tenant, but relates to sub-tenancies
which are not so protected. [569F-F] 565
3. Sub-s. (2) of s.15 relates to
sub-tenancies not permitted by contract A between the landlord and tenant and
which would, but for the said sub-s. (2), fall within the prohibition enacted
in the amended sub-section (I) of s. 15. [570C]
4. In the instant case, the respondent
Goldfiled was a Tenant, Manik Chand was a lawful sub-tenant and the latter had
created a further sub-tenancy in favor of the appellant.
If regard be had to clause (a) of sub-section
(ii) of section 5 it is apparent that in respect of the subsequent sub-tenancy
Manek Chand could be described as a tenant and the appellant as his sub-tenant.
And if that is so, there is no reason why the appellant's sub-tenancy should
not be regarded as a valid sub-tenancy inasmuch as it was created before May
21, 1959 and he entered into possession of the premises before that date and was
continuing in possession on that date. [571A-B] Jai-Singh Morarji & Ors. v.
M/s Sovani Pvt. Ltd. & Ors, [197312 S.C.R. 603, referred to.
P.D. Awani v. Kavashah Dinshah Mulla, (1953)
56 Bombay Law Reporter 467 and Woman Shrinivas Kini v. Ratilal Bhagwandas &
Co., [1959] Supp. 2 S.C.R. 217, held inapplicable. [572F] In the instant case,
having regard to the concession made on behalf of the respondent in the Court
below that Manekchand was a lawful tenant, which necessarily implies a valid
contract of tenancy between the respondent and Manek Chand, the latter was to
be regarded as a contractual tenant when he sub-let the premises to the
appellant. No question, therefore arises of a statutory tenant purporting to
sub-let his interest to a sub-tenant. [572F] Anand Nivas (P) Ltd.. v. Anandji,
[1964] 4 S.C.R. 892, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 682
of 1981.
From the Judgment and Order dated the 21st
June, 1980 of the High Court of Bombay in Special Civil Application No. 2039 of
1975.
V.M. Tarkunde, P.H. Parekh and R.N.
Karanjawala for the Appellant.
Soli J. Sorabjee, V.N. Ganpule and Mrs V.D.
Khanna for the Respondents.
The Judgment of the Court was delivered by
PATHAK, J. This appeal by special leave arises out of a suit for a declaration
and injunction and aises questions concerning the interpretation and
application of certain provisions of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947.
566 Peerbhoy Mansion is a building situated
at Vithalbhai Patel Road in the city of Bombay. It was let to a partnership
firm, Gold Field Leather Works. Gold Field sublet a portion of a shop on the
ground floor to Manekchand Bhikabhai. The sub-tenant Manekchand sublet it
further to Sardar Tota Singh in 1952.
Gold Field filed a suit in 1962 against
Manekchand for possession of the premises on the ground of unlawful subletting
and carrying out unauthorised structural alterations. Manekchand resisted the
suit and filed a written statement During the pendency of the suit Tota Singh applied
to the Court for being added as a defendant, but the application was opposed by
Gold Field and was rejected. Gold Field's suit was ultimately decreed for
possession in accordance with a compromise between the parties.
Tota Singh then filed Suit No. 2454 of 1966
for a declaration that he was a lawful tenant in possession of the premises and
for an injunction restraining Gold Field from executing the decree which that
firm had obtained against Manekchand It was pleaded that he was in occupation
and exclusive possession as a lawful sub-tenant for more than fifteen years to
the knowledge of Gold Field, that the decree in Gold Field's suit was a
collusive decree, that as the decree had been passed against Manekchand he,
Tota Singh, had become a direct tenant of Gold Field under s. 14 of the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947 (the "Bombay Rent
Act") and that therefore he was entitled to the declaration and injunction
sought in the suit.
Gold Field filed a written statement in the
suit and pleaded that they were tenants of the entire building and had sublet
the premises to Manekchand, that Manekchand as sub-tenant could not sub-let the
premises further to Tota Singh, and therefore Tota Singh's sub-tenancy was
invalid.
The Court of Small Causes tried the suit and
decreed it on April 17, 1973. Gold Field appealed. The Appellate Bench of the
Court of Small Causes dismissed the appeal on April 30, 1975. The Appellate
Bench affirmed the trial Judge's finding that the premises had been sublet by
Manekchand to Tota Singh in 1952, and that on May 21, 1959, when the Bombay
Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance 1959 was
promulgated and sub-s. (2) of s. 15 was introduced into the Bombay Act,
Manekchand was not in possession. In the attempt to prove that he was a lawful
567 sub-tenant, Tota Singh urged before the Appellate Bench that Gold A Field
had permitted Manekchand to sublet the premises to him, but this contention was
not entertained by the appellate Bench as there was neither any plea nor any
evidence to support it. The Appellate -Bench also rejected the submissions of
Tota Singh that he had paid rent directly to Gold Field and therefore had been
accepted as a tenant by them. It found that no rent had paid by Tota Singh to
Gold Field after Manekchand's statutory tenancy, which followed the termination
of this contractual tenancy by service of notice had itself been terminated by
the decree for possession in Gold Field's suit One road seemed still open to
Tota Singh to establish the validity of his tenancy. fore the Appellate Bench a
concession had been made by counsel for Gold Field. It was conceded on behalf
of Gold Field that Manekchand was their lawful sub-tenant. On that Tota Singh
urged that if Manekchand, although a sub-tenant, was regarded as a
"tenant" by reason of sub s. (11) of s. 5 of the Bombay Rent Act,
then the benefit of sub-s. (2) of s. 15 should be extended to him. He was in
possession on May 21, 1959 as the sub-tenant of a lawful tenant and, therefore,
the submission proceeded, his subtenancy would be deemed to be valid This
contention found favor with the Appellate Bench. It held that as Tota Singh was
undisputedly in possession on May 21, 1959, the sub-tenancy in his favor by
Manekchand must be deemed to be a valid sub-tenancy. At this point a debate was
raised whether the benefit of sub-s. (2) of s. 15 had to be confined to a
sub-tenancy created by a tenant or could be extended to a sub-tenancy created
by a sub-tenant. Following the view taken by the Bombay High Court in Josephy
Santa Vincent v Ambico Industries.(1) the Appellate Bench answered that
question in favor of Tota Singh and dismissed Gold Field's appeal.
Gold Field filed a Special Civil Application
in the High Court against the order of the Appellate Bench of the Court of
Small Causes and on June 21, 1980 the High Court set aside the decree passed by
the Appellate Bench and dismissed Tota Singh's suit. The High Court took the
view that having regard to certain observations made by this Court in Jai Singh
Morarji and Ors. v. M/s Sovani Pvt. Ltd.
and Ors.(2) an extended construction of sub
s. (2) of s. 15 of the Bombay Rent Act so as to include a sub-tenancy created
by a sub-tenant was not justified.
(1) 70 Bombay Law Reporter 224.
(2) [1973] 2 S.C.R. 603.
568 Tota Singh died during the pendency of
the appeal in the High Court, and accordingly this appeal has been preferred by
his legal representatives.
The material question before us is whether
Tota Singh could rightly claim tenancy rights in the premises and therefore
nullify the enforcement as against him of the decree in Gold Field's suit.
It appears that sub-s. (I) of s. 15 of the
Bombay Rent Act as originally enacted prohibited the sub-letting by a tenant of
premises let to him, except in the particular cases notified by the State
Government under the proviso to that sub-section. A sub letting by the tenant
constituted a ground for his eviction under clause (e) of sub . (1) of s.
13. The rigour of the provision was relaxed
by the Bombay Rents, Hotel and Lodging House Rates Control (Amendment)
Ordinance 1959, which was brought into force on May 21, 1959. The Ordinance was
replaced by the Bombay Rents, Hotel and Lodging House Rates Control (Amendment)
Act 1959 In consequence, sub-s. (1) of s. 15 of the Act stood amended from the
inception of the Bombay Rent Act so that the prohibition against sub letting
incorporated in it operated 'subject to any contract to the contrary".
Simultaneously, sub-s. (2) was inserted in s. 15. That provision was
subsequently substituted by Maharashtra Act 38 of 1962 by the following
provision with effect from May 21, 1959:
"15 (2) The prohibition against the
sub-letting of the whole or any part of the premises which have been let to any
tenant, and against the assignment or transfer in any other manner of the
interest of the tenant therein, contained in sub-section (1), shall, subject to
the provisions of this sub section, be deemed to have had no effect before the
commencement of the Bombay Rents, Hotel and Lodging House Rates Control
(Amendment) Ordinance, 1959, in any area in which this Act was in operation
before such commencement; and accordingly, notwithstanding anything contained
in any contract or in the judgment, decree or order of a court, any such
sub-lease assignment or transfer or any such purported sub-lease, assignment or
transfer in favor of any person who has entered into possession despite the
prohibition in sub-section (1), as a purported sub-lease, assignee or
transferee and has continued in possession at the commencement of the said
Ordinance, shall be deemed to be valid and effectual for all purposes, and any
tenant 569 who has sub-let any premises or part thereof, assigned or A
transferred any interest therein, shall not be liable to eviction under clause
(e) of sub-section (1) of section 13".
It is contended for-the appellant that as the
respondent conceded before the Court of Small Causes that Manekchand was a
lawful sub-tenant, the High Court should have held that a sub-tenancy created
by such sub-tenant must be deemed valid by reason of sub-s. (2) of s. 15 of the
Bombay Rent Act. It is urged that the High Court erred in construing Jai Singh
Morarji (supra) as laying down the contrary. The case for the respondent is
that sub-s. (2) of s. 15 benefits a sub-tenancy created by the original tenant
only and does not extend to a sub-tenancy created by a sub- tenant.
There can be no doubt that upon the amendment
of sub- s. (1) of s. 15 by the Ordinance and by its related Act the prohibition
against sub-letting did not operate in those cases where the sub-letting was
permitted by contract between the landlord and tenant. In all such cases, if
the landlord had permitted the tenant under a contract between them to sublet
the premises, no question would arise of a need to validate those
sub-tenancies. The relevant amendment in subs. (1) of s. 15 was deemed to have
always been part of the sub-section. It is in this light that we must determine
the scope of sub-s. (2) of s. 15. Sub-s. (2) of s. 15 raises the ban from all
sub-letting effected before May 21, 1959, the date of commencement of the
Ordinance, provided the provisions of that sub-section are fulfilled. Any such
sub- lease shall be deemed to be valid provided the sub-lessee has entered into
possession before the date of commencement of the Ordinance and has continued
in possession on such date. This is an especial provision and marks a departure
from the general law. It does not refer to sub-tenancies which are permitted by
contract between the landlord and the tenant, but relates to sub-tenancies
which are not so protected. It will be noted that the removal by sub-s. (2) of
s. 15 of the prohibition is limited only to those sub- tenancies which were
created before May 21, 1959. Such a limitation would be inappropriate to
sub-tenancies permitted by contract which could be created regardless of
whether they were brought into existence before May 2l, 1959 or after that
date. Also, the sub-tenancies covered by sub-s (2) of s. 15 would be regarded
as valid only if the sub- tenant had entered into possession before May 21,
l959 and was continued in possession on that date. Such a requirement would be
wholly inconsistent in the case of sub-tenancies permitted by contract.
Inasmuch as sub-s.(2) of s. 15 specifically attaches the condition that the 570
sub-tenant should have been in possession before the commencement of the
Ordinance and should have continued in possession on that date, it is apparent
that such a provision could be related only to illegal sub-tenants, that is to
say sub-tenants who were let in and given possession without any contractual
right conferred by the land lord on the tenant to do so. The protection
conferred by sub-s. (1) of s. 15 is necessary for such-tenancies only, and not
for a sub tenancy which is permitted by the terms of the contract and which
therefore falls altogether outside the prohibition embodied in sub-s.(l) of s.
15. The result, therefore, is that sub-s. (2) of s. 15 relates to sub tenancies
not permitted by contract between the landlord and tenant and which would. but
for the said sub-s. (2), fall within the prohibition enacted in the amended
sub-section (1) of s. 15.
In the present case, it was conceded on
behalf of Gold Field before the Appellate Bench of the Court. Of Small Causes
that Manekchand was a lawful sub-tenant He could not have been a lawful
sub-tenant by virtue of sub-s. (2) of s.
15 because on May 21, 1959 he was not in
possession of the premises, which in fact had already passed as early as 1952
into the possession of Tota Singh. Manek chand could have been lawful
sub-tenant only on the assumption that the sub- tenancy was permitted under the
contract between Gold Gold Field and their landlord. As the existence of such a
term in the contract would be a question of fact, the concession by counsel for
Gold Field must be regarded as binding in this case on Gold Field. It is urged
for the respondent that the concession made by counsel for Field can be of no
avail because any agreement by a tenant creating a sub-tenancy, being directly
opposed to sub-s. (I) of s. 15 as originally enacted, would be void The
submission, it seems to us, is without force. It must be remembered that sub-s.
(I) of s. 15 was amended by inserting the words "but subject to any contract
to the contrary" in 1959 retrospectively, the words being deemed always to
have been inserted in that sub- section. We must take it by reason of the legal
fiction employed that those words were already part of the sub- section when
Gold Field agreed to sub-let the premises to Manekchand. The cases, P.D. Aswani
v. Kavashah Dinshah Mulla(l) and Waman Shriniwas Kini v. Ratilal Bhagwandas and
Co.,(2) on which learned counsel for the respondent relies, were decided before
sub-s. (1) of s. 15 was amended and therefore did not take into account the
effect of such amendment.
(1) [1953] 56 Bombay Law Reporter 467.
(2) [1969] supp. 2 S.C.R. 217.
571 Therefore, the present case is one where
Gold Field is a tenant, A Manekbhai is a lawful sub-tenant and the latter has
created a further sub-tenancy in favor of Tota Singh.
The question is whether the further
sub-tenancy can fall within the scope of sub-s. (2) of s. 15. Now, if regard be
had to clause (I) of sub-s (l l) of s. 5, it is apparent that in respect of the
subsequent subtenancy Manekbhai could be described as a tenant and Tota Singh
as his sub-tenant And if that is so, there is no reason why Tota Singh's sub-
tenancy should not be regarded as a valid sub-tenancy in as much as it was
created before May 21, 1959 and he had entered into possession of the premises
before that date and was continuing possession on that date.
But it is urged on behalf of Gold Field that
this Court has held in Jai Singh Morarji (supra) that sub-s (2) of s. 15 does
not validate a sub-tenancy created by a sub- tenant. That was a case where the
original landlord filed a suit against the tenant Ochhavlal for possession on
the ground, inter alia, of illegal subletting by Ochhavlal. The suit was
decreed, and the plaintiff obtained possession.
Ochhavlal had sub-l t the premises to Sovani
and Sovani had sub-let them to a private limited company. On application by the
Company against dispossession in the execution proceedings, the trial court
upheld the Company's claim to possession, but this Court ultimately rejected
the Company's claim and upheld the right of the original landlord to
possession. The facts of that case disclose that there were two
prohibited" sub-tenancies, the first was created by Ochhavlal in favor of
Sovani and the subsequent was created by Sovani in favor of the Company. The
benefit of sub-s. (2) of s 15 could have been extended to Sovani only if the
conditions of the sub-section were satisfied If they were satisfied in the case
of Sovani, the benefit could not be extended again in favor of the Company.
That would obviously be so because the condition as to possession on May 21,
1959 could not possibly be satisfied by the subsequent sub-tenant if the
original subtenant was in possession on that date.
If, however, the subsequent sub-tenant was in
possession on May 21, 1959, then clearly neither sub-tenancy can be regarded as
valid. To be valid, the first subtenancy had to satisfy the condition of
possession by that-sub-tenant on May 21, 1959, which ex hypothesi was not
possible. And if the original sub-tenancy was invalid the subsequent sub-
tenancy would also be invalid. The subsequent sub-tenancy would be valid only
if the original sub-tenant had legal interest to transfer to the subsequent
sub-tenant. It is in the light of this analysis that the decision of this Court
in Jai Singh Morarji (supra) needs to be appreciated, in particular the passage
on page 607 of the Report which reads:
572 "The answer to the question is
whether the respondent Private Company was a sub-tenant prior to 1959 and
continued in possession at the commencement of the Ordinance in 1959. Ochhavlal
in the present case gave the sub-lease to Sovani before the Ordinance. It is an
indisputable feature in the present case that Sovani did not continue in
possession at the commencement of the Ordinance of 1959. Sovani became a
Director of the Private Company. It is the Private Company which claims to be a
sub-lessee. The Private Company was in the first place not a sub-lessee of the
tenant but a subsequent assignee from the sub-lessee.
Secondly, SOvani who was the sub-lessee not
in possession on the date of the Ordinance on 21 May, 1959. It was the Private
Company which was in possession. Therefore, the Private Company is not within
the protection of section 15 (2) of the Act " The learned Judges were not
unaware of the terms of sub-s. ( 1) of s. 5, as is evident from the passage on
page 608 of the Report.
It is then urged by learned counsel for the
respondent that clause (a) of sub-s. (11) of s. S of the Bombay Rent Act cannot
be called in aid by the appellant as sub-s. (1) of s. 15 applies to contractual
tenants only. We are referred to Anand Nivas (P) Ltd. v. Anandji,(1) where this
Court laid down that the expression "tenant" in sub-s. (1) of s. 15
of the Bombay Rent Act means a contractual tenant and not a statutory tenant.
The submission can be of no assistance to the respondent. Having regard to the
concession made by counsel for Gold Field in the court below that Manekchand
was a lawful tenant, which position, as we have discussed earlier, necessarily
implies a valid contract of tenancy between Gold Field and Manekchand the
latter must be regarded as a contractual tenant when he sublet the premises to
Tota Singh. No question arises of a statutory tenant purporting to sub-let his
interest to a sub-tenant.
Upon the aforesaid considerations, in our
judgment the appeal must succeed.
The appeal is allowed with costs.
N.V.K. Appeal allowed.
(1) [196414 S.C.R. 892.
Back