Vs. P.K. Balakrishnan  INSC 245 (29 April 1993)
R.M. (J) Sahai, R.M. (J) Ramaswamy, K.
1993 AIR 2132 1993 SCR (3) 460 1993 SCC (3) 297 JT 1993 (3) 364 1993 SCALE
Bombay Rent Hotel and Lodging House Rates Control Act, 1947:
15A-Licence-Statutory Tenant-Cannot create a valid licence unless he was deemed
on a par with contractual tenant by provision in the statute.
appellant-landlord determined the tenancy of the contractual tenant in 1966 and
filed a suit for his eviction. The suit was decreed ex-parte. In execution
proceedings the licensee obstructed and claimed to be protected licensee under
Section 15A of the Bombay Rent Hotel and Lodging House Rates Control Act, 1947.
The objection was rejected by the executing Court. The appellate Court
confirmed the same holding that even though the first licence was, created in
1966 before determination of the tenancy for a period of six years and the
second licence having been created in 1972, it was not necessary to examine the
validity of the first, as the second one was created when contractual tenant
had become statutory tenant, and therefore, he was incapable of transferring
any right or interest in favour of the licensee.
appeal, the High Court upheld the finding of the appellate court that the licence
was created in 1972 It also held that creation of licence by a statutory
tenant, was valid.
aggrieved by the judgment of the High Court, the appellant landlord preferred
an appeal, before the Court.
the appeal, this Court,
the absence of any legislation touching the contract, a contractual tenant is
left with no transferable right after determination of his tenancy. (465-B)
The law would operate in favour of a person who held the premises under valid licence.
A valid licence could be created, by a contractual tenant or by a statutory
tenant if he continued at par with contractual tenant by 461 operation of
legislation. (465-G) 1.3In the instant case, the licence was granted by the
contractual tenant in 1972. But his tenancy had been determined by the landlord
in 1966. He thus had become statutory tenant. He did not, in law had any
assignable interest on the date he created the licence. The grantor, therefore,
from a cause preceding the grant had ceased to have any interest, and was
incapable of creating any valid licence unless he could be deemed to be at par
with the contractual tenant by any provision in the Statute. In absence of any
such provision in the Bombay Rent Act, the licence was invalid and stood
revoked. The occupation of the respondent thus was not as licensee within the
meaning of Section 15A of the Act. (466-B-C) Vasant Tatoba Hargude and Ors. v. Dikkaya
1980 Bombay 341, approved.
Private Ltd. v. Anandji Kalyanji's Pedhi & Others, AIR 1965 SC 414; Jai
Singh Morarji and others v. M/s Sovani (P) Ltd., AIR 1973 SC 772; Damadilal and
others v. Parashram and Others, AIR 1976 SC 2229 and Luadhichem Agencies v. Ahmed
R. v. Peer Mohamed and Anr.,  1 SCR 51 1, referred to.
APPELLATE JURISDICTION: Civil Appeal No. 4233 of 1984.
the Judgment and Order dated 25.3.1983 of the Bombay High Court in W.P. No. 25
and A.S. Bhasme for the Appellant.
and V.B. Joshi for the Respondent.
Judgment of the Court was delivered by R.M. SAHAI J. Can a statutory tenant
create a licence? If the answer is in affirmative then can such licensee claim
immunity from eviction in execution proceedings in view of Section 15A of this
Bombay Rent Hotel and Loging House Rates Control Act 57 of 1947 (hereinafter
referred to as 'the Act')? These are questions which arise for consideration in
this appeal directed against the judgment and order of the Bombay High Court.
What happened was that the landlord determined the tenancy of the contractual
tenant in October 1966 and filed a suit for his eviction in 1967 which was
decreed ex-parte on 5th
October 1973. In
execution of the decree the licensee obstructed and claimed to be protected
licensee under Section 15A of the Act. The objection was rejected by the
executing and the appellate court. The appellate court found that even though
the first licence was, created in 1966 before determination of the tenancy for
a period of six years but the second licence having been created in 1972, it
was not necessary to examine the validity of the first, as second was created
when contractual tenant had become statutory tenant therefore he was incapable
of transferring any right or interest in favour of the licensee. The High Court
did not disturb the finding that the licence was created in 1972 but it held
that creation of licence by a statutory tenant, was valid. Consequently the
licensee was in occupation of the premises as licensee on the date the Bombay
Rent Act was amended and was entitled to the benefit of Section 15A of the Act.
For this reliance was placed on certain observations made by a Division Bench
of that Court in Vasant Tatoba Hargude and Others v. Dikkava Mutta Pujari, AIR
1980 Bombay 341 to the following effect:- "On this point of initial
presumption as to the subsisting incidence of the tenancy, we shall have to
follow the ratio of Damadilal's case (AIR 1976 SC 2229) in preference to the
decision in Anand Nivas case and shall have to proceed on the assumption that
statutory tenant does ordinarily possess transferable interest in his tenancy.
" Who is a statutory tenant, what right or interest he can assign or
transfer have been dealt by this Court in more that one decisions. In Anand Nivas
Private Lid v. Anandji Kalyanji's Pedhi & others AIR 1965 SC 414 a decision
rendered under Bombay Rent Act the majority held, "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.
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 his death 463 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 contrant
to the contrary is transferable and the premisses 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.
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." In Jai Singh Morarji and others v. M/s Sovani (P) Ltd., AIR
1973 SC 772 yet another decision from Bombay the ratio in Anand Nivas was reiterated and It was held that tenant in
Section 15 of the Bombay Rent Actmeant the contractual tenant and not the
statutory tenant. Then came another decision, Damadilal and others v. Parashram
and others, AIR 1976 SC 2229 on M.P. Accommodation Control Act. It in the Court
traced the genesis of the concept of statutory tenant derived from the English
Rent Act but carved out an exception, where, the sanctity, of the contract' was
touched by legislation. It was held that where the statute itself provided
continuance in possession of the tenant after determination of the tenancy in
some right the tenant was at par with contractual tenant. Reason was the
definition of 'tenant' under Section (2) (i) of the Act. It read as under:
person by whom or on whose account or behalf for the rent of any accommodation
is, or, but for a contract express or implied, would be payable for any
accommodation and includes any person occupying the accommodation as a
sub-tenant and also any person continuing in possession after the termination
of his tenancy whether before or after the commencement of this Act; but shall
not include any person against whom any order or decree for eviction has been
made." This section was construed thus, "The definition makes a
person continuing in possession after the determination of his tenancy a tenant
unless a decree or order for eviction has been made against him 464 thus
putting him on par with a person whose contractual tenancy still subsists. The
incidents of such tenancy and a contractual tenancy must therefore be the same
unless any provision of the Act conveyed a contrary intention. That under this
Act such a tenant retains an interest in the premises, not merely a personal
right of occupation, will also appear from Section 14 which contains provisions
restricting the tenant's power of subletting.
148 is in these terms:................
such provision existed in the Bombay Rent Act. The ratio in Damadilal's case,
therefore, could not apply to right or interest created by a statutory tenant
under the Bombay Act.
decisions in Damadilal's case did not in any way deviate from the decisions
given earlier by this Court in Anand Nivas case. All these cases however were
1981 this Court had an occasion to deal with the case of a licensee under the
Bombay Rent Act and his rights under Section 15A of the Act. The Bench was of
the opinion that the licensee was not entitled to obstruct the eviction
proceedings which had become final against the tenant as a statutory tenant
could not assign or create any interest after termination of his tenancy. It
was observed in Ludhichem Agencies v. Ahmed R. v. Peer Mohamed and Anr. 
1 SCR 51 1:
agreement for licence can subsist and continue to take effect only so long as
the licensor continues to enjoy a right, title or interest in the premises. On
the termination of his right, title or interest in the premises, the agreement for
licence comes to an end. If the licensor is a tenant, the agreement for licence
terminates with the tenancy. No tenant is ordinarily competent to grant a licence
enduring beyond his tenancy. On the termination of the licensor's tenancy the
licensee ceases to be a licensee." On facts however since the statutory
tenancy too cam to an end before Section 15A was amended due to passing of the
decree by the trial court the High Court distinguished this decision ignoring
the material difference between the two enactments. What was lost sight of was
that the observation made by this Court in Damadilas's case at page 2234 to the
following effect, "We find it difficult to appreciate how in this country
we can proceed on the basis that a tenant whose contractual tenancy has
determined but who is protected against eviction by the statute, has no right
of property but only a personal right to remain in occupation, without
ascertaining what his rights 465 are under the statute.............. It is not
possible to claim that the "sanctity" of contract cannot be touched
on the language of the Section as it stood under that Act. Therefore, in
absence of any legislation touching the contract it appears to be settled that
contractual tenant is left with no transferable right after determination of
his tenancy. In our opinion the learned judge in drawing an inference from Ludhichem
Agencies (supra) that, 'a licence by a statutory tenant would continue to
subsist 'lawfully till it was terminated and therefore if on the facts of that
case the decree of ejectment against Saraswatibai had been made after 1.2.1973,
then the licence in favour of the petitioners could have been considered to the
subsisting on 1.2.1973,. committed an error of law.
15A reads as under:
(1)Notwithstanding anything contained elsewhere in this Act or anything
contrary in any other law for the time being in force, or in any con tract,
where any person is on the lst day of February 1973, in occupation of any
premises or any part thereof which is not less that a room as a licensee
thereof, he shall on that date he deemed to have become, for the purposes of
this Act, the tenant of the landlord in respect of the premises or part thereof
in his occupation.
provisions of sub-section (1) shall not affect in any manner the operation of
sub-section (1) of Section 15 after the-date aforesaid." The section
brought into force with effect from 1st February 1973 undoubtedly protected a
licensee form eviction. But it could operate in his favour only if he was in
occupation of the premises on the date the Act came into force as a licensee.
It is, thus, not mere occupation but occupation as licensee which has been
statutorily protected. In other words the law would operate in favour of a
person who held the premises under valid licence. A valid licence could be
created, as explained earlier, by a contractual tenant or by a statutory tenant
if he continued at par with contractual tenant by operation of legislation. In
absence of any such provision in the Bombay Rent Act the licence created in favour
of licensee by the statutory tenant could riot render the respondent, a
licensee within the meaning of Section 15A of the Act.
Even a valid licence stands revoked in circumstances mentioned in Section 62 of
the Indian Easements Act. Its clause (a) reads as under:
A license is deemed to be revoked- (a)when, from a cause preceding the grant of
it, the grantor ceases to have any interest in the property affected by the
license:" The licence was granted by the contractual tenant in 1972.
his tenancy had been determined by the landlord in 1966.
thus had become statutory tenant. He did not, in law had any assignable
interest on the date he created the licence.
grantor therefore from a cause preceding the grant had ceased to have any
interest, and was incapable of creating any valid licence unless he could be
deemed to be at par with the contractual tenant by any provision in-the
absence of any such provision in the Bombay Rent Act the licence was invalid
and stood revoked. The occupation of the respondent thus was not as licensee
within the meaning of Section 15A of the Act.
result this appeal succeeds and is allowed. The order passed by the High Court
in the Writ Petition is set aside and it shall stand dismissed. In the
circumstances of the case, however, there shall be no order as to costs.