Tar Products Ltd. V. H.C. Sharma & Ors  INSC 330 (12 November 1987)
SABYASACHI (J) MUKHARJI, SABYASACHI (J) OZA, G.L. (J)
1988 AIR 145 1988 SCR (1)1023 1988 SCC (1) 70 JT 1987 (4) 440 1987 SCALE
1989 SC1141 (16) R 1989 SC1806 (9) R 1989 SC1819 (10) RF 1991 SC1055 (5) RF
1991 SC2053 (16)
Rent Control Act, 1958: Sections 14(1) proviso (b), 16(2) and
(3)-Tenant-Eviction on ground of sub letting- consent to sub letting should be
in writing-Mere permission or acquiecence would not do-Waiver of this statutory
right- Not permissible.
The respondent-landlord sought eviction of the appellant-tenant on the ground
of having sub-let without written consent the portion in his occupation in
favour of M/s. R.C. Abrol & Co. The appellant resisted the petition for
eviction, contending that it was not maintainable in the absence of a notice to
quit while determining the tenancy, that there was no sub-letting or parting of
possession by the appellant in favour of M/s. R.C. Abrol & Co., in view of
Clause 14 of the Lease agreement, which provided: "That the lessee
undertakes not to sub-let the premises to any other party without the written
permission of the lessor and that the lessee's contractors M/s.R.C. Abrol and
Co. will share the premises with the permission of the lessor". The Rent
Control Tribunal ordered eviction of the appellant on the ground of
High Court dismissed the Second Appeal of the appellant and confirmed the
decision of the Rent Control Tribunal ordering eviction.
the appeal to this Court by special leave it was contended for the appellant,
that there was no sub-letting or parting of possession by the appellant-tenant
in favour of M/s. R.C. Abrol & Co. (P) Ltd., and that if there was
sub-letting that had been made with the written consent of the landlord.
the Appeal, ^
1. Sections 14(1) proviso (b), 16(2) and (3) of the Delhi Rent Control Act,
1958 require the tenant to obtain consent of the landlord in writing for
sub-letting of the premises. The purpose of such written consent was that it
would cut out litigation on this ground. Mere permission or acquiescence would
not do. The consent must be to the specific sub-letting and must be in writing.
There is no implied permission. [1026A, 1028D] 1024 South Asia Industries
Private Ltd. v. S. Sarup Singh & others, A.I.R. 1966 S.C. 346,referred to.
Ram Goyal v. Ashok Kumar and others, All India Rent Control Journal 534;
Kartar Singh v. Shri Vijay Kumar and Another,  All India Rent Control
Journal 264 and M/s. Delhi Vanaspati Syndicate, Delhi v. Bhagwan Dass Faquir
Chand, A.I.R. 1972 Delhi 17,approved.
Everyone has a right to waive and to agree to waive the advantage of a law made
solely for the benefit and protection of the individual in his individual
is a question of fact which has to be decided by facts and evidence. [1029C]
Chaplin v. Smith, [1926) 1 King's Bench Division 198, referred to.
the instant case, there was no question of waiver.
was no conscious relinquishment of the advantage of any statute. No Court has
gone into this fact. It does not seem to have been urged before the High Court
also. As this requirement of the statute is in the public interest there cannot
be any question of waiver of a right, dealing with the rights of the tenants or
the landlord. [1029D]
To constitute sub-letting there must be parting of the legal possession.
Parting of the legal possession means possession with the rights to include and
also the right to exclude others. This is a question offact. [1032B] Mehta
Jagjivan Vanechand v. Doshi Vanechand, A.I.R. 1972 Gujarat 6, referred to.
the instant case, exclusive possession was given to the sublessee, R.C. Abrol
& Co. and the tenant has transferred the right to possess in that portion.
It is clear that the sub-letting was done wihout the consent in writing of the
landlord. There was, therefore an inevitable breach of the covenant. The High
Court was therefore right in upholding the order of the Rent Control Tribunal
and directing eviction of the appellant. [1032G-1033A]
Appellate Jurisdiction: Civil Appeal No. 1425 of 1973.
the Judgment and Order dated 21.9.1973 of the Delhi High 1025 Court in S.A.O.
No. 294 of 1972.
Shankar Ghosh and Rathin Das for the Appellant.
Rohtagi, Soli J. Sorabjee, Mrs. R. Swami, A.K. Verma and Ms. S. Sethna for the
Judgment of the Court was delivered by SABYASACHI MUKHARJI J. This is an appeal
by special leave directed against the judgment and order of the High Court of
Delhi dated the 21st September, 1973 in Second Appeal No. 294/72. The High
Court dismissed the Second Appeal of the appellant and confirmed the decision
of the Rent Control Tribunal and ordered eviction. Before the High Court three
contentions were urged namely:-
The petition for eviction was not maintainable in the absence of a notice to
quit while determining the tenancy,
There was no sub-letting or parting of possession by the appellant-tenant in
favour of R.C. Abrol & Company Pvt. Ltd., and
If there was such sub-letting, it had been made with the written consent of the
landlord so was not actionable.
Rent Control Tribunal confirmed the findings against the appellant in all the
three contentions and the High Court also affirmed the findings of the Rent
Control Tribunal. We must note that no contention was raised before us as far
as point No. 1, namely notice was not served. The only contention before us was
that there was no sub-letting or parting of the possession by the
appellant-tenant in favour of R.C. Abrol & Company Pvt. Ltd. and secondly
it was urged that if there was sub-letting that had been made with the written
consent of the landlord. The Clause 14 of the lease deed in the instant case
which provides, inter alia, the terms and conditions is as follows:-
"Clause 14-That the lessee undertakes not to sub- let the premises to any
other party without the written permission of the lessor, and that the lessee's
contractors M/s R.C. Abrol & Co. will share the premises with the
permission of the lessor." 1026 This is in consonance also with provisions
of Section 14(1)(b) of the Delhi Rent Control Act, 1958 (hereinafter called the
Act) and Sub-Sections (2) and (3) of Section 16 of the said Act. The first
question, therefore, is whether there was any sub-letting and secondly if so
was the same with the consent in writing of the landlord. All these questions
are essentially questions of facts and were held against the appellant by the
Rent Control Tribunal which was the final Court of facts, applying the correct
propositions of law. This conclusion has been affirmed by the High Court.
us it was pointed out by Sree Shankar Ghosh, learned counsel for the appellant,
that it was not necessary that the consent to sub-letting should be in writing
and what he contended was that it was necessary to have the consent and the
manner of proving consent was provided in writing. In other words, he contended
that the provision which required that the consent should be in writing meant
it was mandatory so far as it enjoined consent but it was directory so far as
it said that such consent should be in writing. Apart from the statute in this
case, we find it difficult to accept this argument in view of the specific
clause in the statute hereinbefore. In South Asia Industries Private Ltd. V. S.
Sarup Singh and others, A.I.R. 1966 S.C. 346. Justice A.K. Sarkar as the
learned Chief Justice then was, observed that the object of interpreting a
statute was to ascertain the intention of the legislature in enacting it. An
interpretation defeating the object of a statute is, therefore, not
paragraph 11 of the judgment at page 350 the learned Judge observed as
follows:- "I notice that the lease gave no express right to the lessee to
assign with or without the consent of the lessor. The lessee no doubt had that
right under the Transfer of Property Act. It may be that under the clause the
lessee's assignee would be included in the expression "lessee" as
used in the lease; that is the entire effect of the clause.
this would be so whether the lessor had consented to the assignment or not.
therefore this clause does not lead to the conclusion that the lessor had
consented to the assignment. It is of no assistance in the present case. I am
also inclined to the view that the consent contemplated by Section 14(1)
proviso (b) is a direct consent to a contemplated assignment to a particular
assignee. See Regional Properties Ltd. v. Frankenschwerth,  1 All ER 178.
Clearly the clause in the case relied upon could not be a consent of this
kind." 1027 It is true that Justice R.S. Bachawat had expressed the view
that the consent could be general or special but in the case before the Court
there was no conduct which showed that there was consent by the general words
of the clause in the deed. We are of the opinion on reading of the different
provisions that the consent enjoined by bargain between the parties in this
case must be in writing and must be to the specific sub-letting.
was the view of the Delhi High Court in Raja Ram Goyal v. Ashok Kumar and
others,  All India Rent Control Journal 534. In Kartar Singh v. Shri Vijay
Kumar and Another,  All India Rent Conrol Journal 264 the High Court of
Punjab & Haryana has also expressed similar view.
the case of M/s Delhi Vanaspati Syndicate, Delhi v. M/s Bhagwan Dass Faqir
Chand, (A.I.R. 1972 Delhi 17) Khanna, C.J. as he then was of the Delhi High
Court observed at page 19 of the report:
16 of the Act of 1958 holds the key to the interpretation of provisions of
Clause (b) of sub-section (1) of Section 14 of this Act as well as of Clause
(b) of subsection (1) of S. 13 of the Act of 1952. It deals with restrictions
on sub- letting. Sub-section (1) of section 16 makes sub- letting lawful though
it was without the consent of the landlord provided that the sub-letting has
taken place before 9th day of June, 1952 and the sub-tenant is in occupation of
the premises at the time when the Act of 1958 came into force. Sub- section (2)
of section 16 reiterates the provisions of Clause (b) of sub-section (1) of
Section 13 of the Act of 1952 and lays down that the sub-letting after 9th day
of June, 1952 without obtaining the consent in writing of the landlord shall
not be deemed to the lawful. It does not say that the requisite consent should
be obtained before sub-letting the premises and the consent obtained after
sub-letting will not enure for the benefit of the tenant.
sub-section (3) of Section 16 prohibits subletting of the premises after
commencement of Act of 1958 without the 'previous' consent in writing of the
landlord. The use of word 'Previous' in this sub-section shows that where it
was the intention of the legislature that the consent in writing should be
obtained before sub-letting, it said so specifically. The absence of the word
'Previous' in subsection (2) shows that it was not the intention of the legislature
that the consent in writing could be obtained before sub-letting. Before the
Act of 1952 a tenant could successfully show acquiescence of the landlord in
sub-letting to escape forfeiture of tenancy. Since the absence of consent in
writing by a landlord for sub-letting gave rise to unnecessary litigation
between a landlord and a tenant, the Act of 1952 required the consent of the
landlord in writing after its commencement.
purpose seemed to be that the consent of the landlord evidence by a writing
would cut out litigation on this ground. After all a landlord could always
agree to sub-letting either before or after sub-letting of the premises. For
that reason no condition was laid down that such consent should be obtained
before sub-letting the premises." We are in agreement with this approach
to the interpretation and it is in consonance with the view expressed by this
Court earlier as mentioned hereinbefore.
the aforesaid view of the matter we are of the opinion that it was necessary
for the tenant to obtain the consent in writing to sub-letting the premises.
The mere permission or acquiescence will not do. The consent must be to the
specific sub-letting and must be in writing. Indeed there was no implied
permission also here. Our attention was drawn to the fact that the landlord had
written letter to the tenant and the landlord objected to the sub-letting, the
moment he realised the situation.
that view of the matter we are clearly of the opinion that in this case there
was no consent in writing on the part of landlord to such sub-letting.
Shankar Ghosh tried to state that in view of the fact that the key of the
premises was stated to be in the custody of the tenant, there was no
sub-letting. It was the mere user, it was urged. It is difficult to accept this
contention. The case of sub-letting was accepted as has been found by all the
Courts in this case.
attention was drawn to the certain observations on the question of
directory/mandatory nature of the requirement that consent should be in
was placed on the observations of Craies on Statute Law 7th Edition 261 wherein
in the election case requirement that ballot paper had to be kept in a
particular manner was considered to be 1029 directory and similarly it was
submitted in this case the requirement of the consent to be in writing should
be construed to be directory. It was urged that the conduct of the parties
indicated that there was no breach of the covenant. We are unable to agree.
Here the situation is clearly different. Here the requirement of consent to be
in writing was to serve a public purpose, i.e., to avoid dispute as to whether
there was consent or not.
was also placed on the observations of Maxwell in the Interpretation of
Statutes 12th Edition at page 328 on the question of waiver:
has a right to waive and to agree to waive the advantage of a law made solely
for the benefit and protection of the individual in his individual capacity. We
are, however, in this case unable to agree. Firstly, in this case there was no
case of waiver. Waiver is a question of fact which has to be tested by facts
and evidence. There was no conscious relinquishment of the advantage of any
Court has gone into this fact. It does not seem to have been urged before the
High Court also. Apart from this, in this requirement of the statute which is
in the public interest there cannot be any question of waiver of a right,
dealing with the rights of the tenants or the landlord. In Chaplin v. Smith, 
1 King's Bench Division 198, it was held that physical possession was not
sufficient, there must be legal possession.
question was whether there was any consent in writing in this case. We have
noticed Clause 14 of the lease deed states that the lessee will not sublet the
premises or any part to any party without the written permission of the lessor
except that the lessee's Contractors M/s R.C. Abrol & Co. Pvt. Ltd. will
share the premises with the permission of the lessor. So the permission of the
lessor was there but the purpose was of the sharing with M/s R.C. Abrol &
Ltd. was not of leasing the premises to any other entity. For the purpose of
this, it is suffice for us to state that Clause 14 as enjoined did give
permission of leasing the premises to M/s. R.C. & Co. Pvt. Ltd. which was a
with this contention the High Court observed in its judgment that the company
had been incorporated some time in 1957 after the commencement of the tenancy.
Company was a distinct legal entity. It appears in this case that the company
was composed of the different persons. The High Court noted that there was
never any 1030 consent in writing of the landlord to sub-letting the premises
to the incorporated company. The permission must have been in writing and
specific in the words of Justice Sarkar in South Asia Industries Private Ltd.
v. Sarup Singh and others, (Supra).
the case of Mehta Jagjivan Vanechand v. Doshi Vanechand, (A.I.R. 1972 Gujarat
6), Justice Thakkar as he then was of the Gujarat High Court observed at page 8
of the report:
similar question was raised before the Madras High Court in Gundalpalli
Rangamannar Chetty v. Desu Rangiah, AIR 1954 Madras 182. A reference was made
to Jackson v. Simons,  1 Ch. 373, and the distinction drawn between
physical possession and legal possession in that decision was taken into
account in rejecting the contention of the landlord that there was a subletting
or assignment. It has been observed by the Madras High Court in paragraph (5)
of the said decision as under:- "In `Jackson v. Simons'  1 Ch.
373(B) the question was whether the tenant broke a similar covenant. The
defendant who was the tenant, without the plaintiffs' consent or knowledge
agreed for the sum of Ls 7 per week to allow the proprietor of a night club
carried on in a basement beneath the shop to the front part of the shop between
the hours of 10.30 P.M. and 2 a.m.
the sale of tickets of admission to the club Romer J. held that the arrangement
conferred to estate or interest in the demised premises but was a mere
privilege or licence to use portion thereof, the defendant retaining the legal
possession of the whole and did not therefore constitute a breach of the
covenants not to assign, underlet or part with the demised premises or any part
thereof." The Madras High Court also relied on an observation made by
Scrutton L.J. in Chaplin v. Smith,  1 KB 198, at p. 211, wherein it was
did not assign; nor did he underlet. He was constantly on the premises himself
and kept the key of them. He did business of his own as well as business of the
company. In my view he allowed the company to use the premises while he himself
remained in possession of them." 1031 Reliance was also placed on the
Treatise of Foa on Landlord and Tenant, 6th Edn. at page 323, where the law on
the subject has been summarized in the following words:
mere act of letting other persons into possession by the tenant, and permitting
them to use the premises for their own purposes, is not so long as he retains
the legal possesion himself, a breach of the covenant." After considering
all these decisions, the High Court of Madras extracted the following
principles and came to the conclusion that a mere taking in of partners did not
amount to transferring of possession and did not constitute assignment or
subletting. Says the Madras High Court:
is clear from the aforesaid decisions that there cannot be a sub-letting unless
the lessee parted with legal possession. The mere fact that another is allowed
to use the premises while the lessee retains the legal possession is not enough
to create a sub-lease. Section 105 of the Transfer of Property Act defines a
lease of immovable property as to transfer of right to enjoy such property.
Therefore to create a lease or sub-lease a right to exclusive possession and
enjoyment of the property should be conferred on another. In the present case
the exclusive possession of the premises was not given to the second
first respondent continued to be the lessee, though in regard to the business
carried on in the premises he had taken in other partners. The partners are not
given any exclusive possession of the premises or a part thereof. The first
respondent continues to be in possession subject to the liability to pay rent
to his landlord. The partnership deed also, as I have already stated, does not
confer any such right in the premises on the other partners. I, therefore, hold
in the circumstances of the case the first respondent did not sublet the
premises to the second respondent, and therefore he is not liable to be evicted
under the provisions of Act No. 25 of 1949." The view taken by me is
reinforced by the opinion expressed by the Madras High Court in the aforesaid
decision. A similar view has also been taken by Saurashtra High Court in
Karsandas Ramji v. Karsanji Kalyanji, AIR 1953 Sau. 113 at pp. 114 & 115.
In my opinion, it is therefore clear 1032 that there has been no assignment or
subletting in favour of the partners of the firm by the tenant so as to attract
the Bar of s. 13(1)(e) of the Rent Act. The view taken by the lower Courts is
correct and no exception can be taken thereto.
is no dispute in the legal proposition that there must be parting of the legal
possession. Parting of the legal possession means possession with the right to
include and also right to exclude others. That is, in our opinion, is the
matter of fact. In this case, it has been found that there was a right of
possession in favour of the sub-lessee R.C. Abrol & Co. Pvt. Ltd. and right
to exclude indeed as it appears from the narration of the fact that the company
has gone into liquidation and the official liquidator has taken possession of
the premises on behalf of the liquidator and that must be on the basis that it
was the asset belonging to the company. In that aforesaid view of the matter we
are unable to accept this proposition that there was no sub- letting.
Shankar Ghosh drew our attention to the observations of the High Court of Delhi
in the following three cases:
Nath and Anr. v. Chaman Lal Khanna & Others,  All India Rent Control
Gurdial Singh v. Shri Brij Kishore & Others,  Delhi Law Times 592.
Reliable Finance Corporation (P) Ltd. v. M/s Clearing House and Agencies
Private Ltd & Ors.  2 Rent Control Reporter 449.
Bangalore Transport Co. (West) v. Inder Singh and Others,  3 S.C.C. 62.
contended that in the light of the aforesaid authorities in this case, there
was no parting of legal possession in favour of the sublessee. We are unable to
accept this position. In the instant case, exclusive possession was given to
the sub-lessee and the tenant had transferred the right to possess in that
portion. It is clear that subletting was done without the consent in writing of
the landlord. If that is so, there was inevitably breach of the covenant.
that view of the matter the High Court was right in upholding 1033 the order of
the Rent Control Tribunal and directing eviction of the appellant. The appeal,
therefore, must fail and is accordingly dismissed.
view of the fact that the appellant has been in possession of the premises for
quite some time and to make its arrangements for shifting we direct the decree
for eviction shall not be executed before 30.6.1988 provided the appellant
files the usual undertaking in this Court within four weeks from today. Mesne
profits will be payable from 1st of December 1987 @ Rs.7,000 per month until
the possession is delivered.
That the appellant will hand over vacant and peaceful possession of the
premises to the respondents on or before 30.6.1988 from today.
That the appellant will pay to the respondent arrears of rent, if any, within
one month from today.
That the appellant will pay to respondent further compensation for use and
occupation of the premises month by month before 10th of every month.
That the appellant will not induct any other person in the premises.
Court further directs that in default of compliance with any one or more of
these conditions or if the undertaking is not filed as required within the
stipulated time, the decree shall become executable forthwith.