The
State of West Bengal & Anr Vs. Kailash Chandra Kapur
& Ors [1996] INSC 1531 (29 November 1996)
K. Ramaswamy,
G.T. Nanavati
ACT:
HEAD NOTE:
O R D
E R
Leave
granted.
We
have heard learned counsel on both sides.
This
appeal by special leave arises from the judgment of the Division Bench of the
Calcutta High Court, made on January 19, 1996
in Appeal No.182/95.
The
admitted facts are that a lease for 999 years was granted by the Governor of
west Bengal to one Tapan Kumar Mullick on July 28, 1983 assigning a plot of land No.CL-10
in Section II admeasuring 4,195 conttahs in Bindhannagar (Salt Lake) in Calcutta. The lessee had executed a Will in favour
of the first respondent, a stranger to the family on July 22, 1992 of the lease-hold premises. The
lessee died on May 22,
1993. Thereafter, the
first respondent had applied for and was granted without any contest by the
legal representatives of the lessee the probate to the Will by order of the
Court dated May 19,
1994. It would,
therefore, be obvious that the bequest was after receipt of consideration.
Thereafter, the legatee had applied for mutation of his name in the record as
lessee which was objected to and met with rejection. As a consequence, the
respondent had filed writ petition under Article 226 of the Constitution. The
learned single Judge directed to mutate the name of the first respondent as a
lessee under the testamentary disposition made by the original lessee which was
confirmed by the Division Bench of Calcutta High Court in Appeal No.183/95 by
judgment dated January
19, 1996.
Thus,
this appeal by special leave.
Shri
V.R. Reddy, learned Additional Solicitor General, has contended that clauses 7,
8 and 12 of the indenture of the lease should be read together which manifest
the intention that the lease was for the enjoyment of leasehold right of the
demised site or a building constructed thereon either by the lessee or his
legal representatives and one among them alone should be made responsible to
and answerable to the lessor-appellant, the Government of West Bengal. It
prohibited sub-letting or transfer without prior permission of the Governor;
thereby, there is and implied prohibition to bequeath the leasehold right in
the property in favour of the strangers. In that background, the word `transfer'
employed in clause 8 of the lease deed would be understood in a broader sense.
If so understood, any bequest made to a stranger, without the permission of the
Government, does not bind the Governor. Therefore, the Government is not
obliged to recognise a stranger as a lessee after the demise of the original
lessee. In support thereof, he placed strong reliance on the judgment of a
Division Bench of the Bombay High Court in Dr. Anant Trimbak Sabnis vs. Vasant Pratap
Pandit [AIR 1980 Bom. 69]. He also further placed reliance on a report given by
the Committee constituted in that behalf on May 3, 1984 of the misuse of the
leasehold right granted by seeking transfer in favour of the distant relations.
On receipt thereof, the Governor by a notification specified that the near
relations shall mean and include the father, mother, brother, sister, son,
daughter, husband and wife. It prohibited registration under Registration Act
by any other relative. It would amplify the intention of the Government in that
behalf in granting leasehold interest of their land for the benefit of use and
enjoyment of the demised premises for the residential purpose by the members of
the family or near relations. The strangers were not intended to be inducted in
and given enjoyment of the leasehold interest of the property demised by the
Government. Unless the Government gives permission for such a transfer, it
cannot be considered to be valid in law. The High Court thereby committed grave
error of law in directing that a stranger be treated as a lessee of the
Governor.
Shri
D.P. Gupta, learned senior counsel for the respondents, on the other hand,
contends that we are concerned in this case with the covenants engrafted in the
lease-deed. The relevant covenants are 7, 8, and 12. Each one deals, in its own
parameters, with restricted covenants there under with different situations.
Clause (12) is relevant in this behalf. It does not contemplate any restriction
to will away the leasehold interest to a stranger. The word `person' used in
clause (12) would include the stranger also. The second Clause in para 2 of
clause (12) would include heirs also. Thus, these covenants contained in clause
(12) do indicated that the lessee is empowered to bequath his leasehold
interest in favour of a stranger. The only restrictive covenant contained
therein was that in the event of the bequest in favour of more that one person,
one among them alone should be recognised as a person answerable to the
Governor for compliance of the covenants contained in the lease deed. The
succession may be either testamentary or intestate succession. In this case, it
is testamentary succession. In support thereof, he placed reliance on the
judgment of the Constitution Bench in Gian Devi Anand vs. Jeevan Kumar [(1985)
2 SCC 683]. He, therefore, contends that there is not prohibition for
testamentary succession by the first respondent in respect of the leasehold
interest given to Mullick. Shri V.R. Reddy sought to distinguish the judgment
in Gian Devi's case by relying upon Bhavarlal Labhchand Shah vs. Kanaiyalal Nathalal
Intawala [(1986) 1 SCC 571] wherein this Court had held that it would not apply
to testamentary succession and the landlord should not be trusted with a
stranger as lessee.
In
view of the diverse contentions, the question that arises for consideration is;
what is the meaning of the word "person" in clause (12) of the
covenants? It is necessary to read the relevant clauses in the lease deed,
namely, clauses 7, 8 and 12 conjointly or independently. They read as under:
(7)
The Lessee shall not sub-divide or sub-let the demised land or the building to
be constructed without the consent in writing of the Government first had and
obtained and the Government shall have the right and be entitled to refuse its
consent at its absolute discretion.
(8)
The Lessee shall not assign or transfer the demised land or any part of the
demised land and/or the structure erected thereon without the previous
permission of the Government in writing. In case of transfer or assignment of
the lease the Lessor shall have the right of pre-emption and upon the exercise
of this right the building constructed by the lessee on the land shall be taken
over by the lessor at a valuation of the building made by the Lessor on the
basis of the costs of construction of the building less depreciation at the
usual rate of the market value thereof, whichever is less.
The
value of the land will be the amount of the salami or premium paid by the
Lessee. In the event of difference between the parties as to the value of the
building, the matters in dispute shall be referred to the arbitration of an
arbitrator if the parties can agree upon one or otherwise to two arbitrators,
one to be appointed by each party with an Umpire. The award of the arbitrator
or arbitrators or the Umpire, as the case may be, shall be final and binding on
both the parties.
Provided
however that in case the Lessee transfers or assigns the leasehold interest in
the leasehold interest in the land and/or structure standing thereon in favour
of LIC or Nationalised Bank or Government or Semi-Government Organisation, or
registered Housing Co-operative Society, or Statutory Body by creating mortgage
for repayment of loan for house building purpose, Life Insurance corporation of
India or Nationalised Bank or Government or Semi-Government Organisation, or
registered Housing Co-Operative Society, or statutory Body, as the case may be,
it may claim priority over the Government of West Bengal in respect of right of
pre-emption on the demised land and/or structure standing thereon subject to
the condition that all the dues of the Government as provided herein shall be
payable and recoverable to the Government of West Bengal either from the lessee
or from the Life Insurance Corporation of India, or Nationalised Bank or
Government or Semi-Government Organisation, or registered Housing Co-operative
Society, or Statutory Body, as the case may be. provided however such charge if
created shall be subject to the terms and conditions of the lease.
(12)
If the Lessee dies after having made a bequest of the lease hold premises and
the building thereon, if any, in favour of more than one person or die
intestate having more than one then heir, then in such case the persons to whom
the leasehold premises with the building thereon be so bequeathed or the heirs
of the deceased Lessee, as the case may be, shall hold the said partition of
the same by metes and bounds or they shall nominate one person amongst their
number in whom the same shall vest." It is true that the object of grant
of leasehold right in the land belonging to the Government in a long lease for
999 years, as explained by the Government in the report of the Committee and
accepted by the Governor, was that the demised land would be granted to the
lessee and enjoyed by him, a legal heirs and close relations of the lessee.
Thereby,
they would remain in possession and enjoyment of the leasehold interest
together with the building constructed thereon to make right to residence as
engrafted in Article 19(1)(e) of the Constitution a reality and fundamental
right. When the Government distributes its material resources, as engrafted in
Article 39(b) of the Constitution, the object of the policy is to effectuate
the mandate of the Constitution in the Preamble of the Constitution, viz.,
social Justice and dignity of person with equal status. The lease was in
furtherance thereof. But the question is: whether the lessee has a right to
transfer in favour of a stranger in terms of the lease and whether it would
frustrate the object thereof? The Division Bench of the Bombay High Court,
considering Section 15(1) of the Bombay Rent Act and the words
"assignment" or "transfer" has held that the words `assign'
or `transfer' are not defined under that Act. The dictionary meaning of the
word would be considered in the absence of any definition given in the Act. It
would suggest that to transfer or formality to make over to another. The word
"assign" denotes "generally to transfer property especially
personal estate or set over a right to another".
In
their generic sense, the words `assign' or `transfer' include every kind of
transfer of the property from one to another including testamentary
disposition. The restricted meaning of the word `transfer' denied under Section
5 of the Transfer of Property Act requires to be considered in the light of a
particular enactment and its scheme. It has, therefore, been held that the word
`assign' does include disposition by a Will. Thereby, it would be construed
that in an appropriate case where the property was assigned by testamentary
disposition, it may be a transfer for the purpose of a particular Act or a
Regulation, as the case may be.
In Gian
Devi's case (supra), this Court had to consider, in the absence of any
restriction under the Delhi Rent Control Act, the intestate succession by the
heirs of the tenant of the leasehold right of commercial premises.
This
Court had considered the effect of the law in paragraphs 23, 31 and 36 as
under:
"For
an appreciation of the question, it is necessary to understand the kind of
protection that is sought to be afforded to a tenant under the Rent Acts and
his status after the termination of the contractual tenancy under the Rent
Acts. It is not in dispute that as long as the contractual tenancy remains
subsisting, the contractual tenancy creates heritable rights; and, on the death
of a contractual tenant, the heirs and legal representatives step into the
position of the contractual tenant; and, in the same way on the death of
landlord the heirs and legal representatives of a landlord become entitled to
all the rights and privileges of the contractual tenancy. A valid termination
of the contractual relationship. On the determination of the contractual
tenancy, the landlord becomes entitled under the law of the land to recover
possession of the premises from the tenant in due process of law and the tenant
under the general law of the land is hardly in a position to resist eviction,
once the contractual tenancy has been duly determined.
Because
of scarcity of accommodation and gradual high rise in the rents due to various
favors, the landlords were in a position to exploit the situation for
unjustified personal gains to the serious detriment of the helpless tenants.
Under the circumstances, it became imperative for the legislature to intervene
to protect the tenants against harassment and exploitation by avaricious
landlords and appropriate legislation came to be passed in all the States and Union Territories where the situation required an interference by the
legislature in this regard. It is no doubt true that the Rent Acts are
essentially meant for the benefit of the tenants. It is, however, to be noticed
that the Rent Acts at the same time also seek to safeguard legitimate interests
of the landlords. The Rent Acts which are indeed in the nature of social
welfare legislation are intended to protect tenants against harassment and
exploitation by landlords, safeguarding at the same time the legitimate
interests of the landlords. The Rent Acts seek to preserve social harmony and
promote social justice by safeguarding the interests of the tenants mainly and
at the same time protecting the legitimate interests of the landlords. Though
the purpose of the various Rent Acts appear to be the same, namely, to promote
social justice by affording protection to tenants against undue harassment and
exploitation by landlords, providing at the same time for adequate safeguards
of the legitimate interests of the landlords, the Rent Acts undoubtedly lean
more in favour of the tenants for whose benefit the Rent Acts are essentially
passed.
It may
also be noted that various amendments have been introduced to the various Rent
Acts from time to time as and when situation so required for the purpose of
mitigating the hardship of tenants.
We now
proceed to deal with the further argument advanced on behalf of the landlords
that the amendment to the definition of `tenant' with retrospective effect
introduced by the Delhi Rent Control Amendment Act (Act 18 of 1976) to give
personal protection and personal right of continuing in possession to the heirs
of the deceased statutory tenant in respect of residential premises only and
not with regard to the heirs of the `so-called statutory tenant' in aspect of
commercial premises, indicates that the heirs of so- called statutory tenants,
therefore, do not enjoy any protection under the Act. This argument proceeds on
the basis that in the absence of any specific right created in favour of the
`so- called statutory tenant' in respect of his tenancy, the heirs of the
statutory tenant who do not acquire any interest or estate in the tenanted
premises, become liable to be evicted as a matter of course.
The
very premise on the basis of which the argument is advanced, is, in our
opinion, unsound. The termination of the contractual tenancy in view of the
definition of tenant in the Act does not bring about any change in the status
and legal position of the tenant, unless there are contrary provisions in the
Act; and, the tenant notwithstanding the termination of tenancy does enjoy an
estate or interest or estate which the tenant under the Act despite termination
of the contractual tenancy continues to enjoy creates a heritable interest in
the absence of the any provision to the contrary. We have earlier noticed the
decision of this Court in Damadilal case. This view has been taken by this
Court in Damadilal case and in our opinion this decision represents the correct
position in law. The observations of this Court in the decision of the seven
Judge Bench in the case of V. Hanpal Chettiar vs. Yesodai Ammal which we have
earlier quoted appear to conclude the question. the amendment of the definition
of tenant by the Act 18 of 1976 introducing particularly Section 2(1)(iii) does
not in any way mitigate against this view. The said sub-clause (iii) with all
the three Explanations thereto is not in any way inconsistent with or contrary
to sub-clause (ii) of Section 2(1) which unequivocally states that tenant
included any person continuing possession after the termination of his tenancy.
In the absence of the provision contained in Section 2(1)(iii), the heritable
interest of the heirs of the statutory tenant would devolve on all the heirs of
the `so-called statutory tenant' on his death and the heirs of such tenant
would in law step into his position. This sub-clause (iii) of Section 2(1)
seeks to restrict this right insofar as the residential premises are concerned.
The heritability of the statutory tenancy which otherwise flows from the Act is
restricted in case of residential premises only to the heirs mentioned in
Section 2(1)(iii) and the heirs therein are entitled to remain in possession
and to enjoy and protection under the Act in the manner and to the extent
indicated in Section 2(1)(iii). The Legislature, which under the Rent Act
affords protection against eviction to tenants whose tenancies have been
terminated and who continue to remain in possession and who are generally
termed as statutory tenants, is perfectly competent to lay down the manner and extent
of the protection and the rights and obligations of such tenants and their
heirs. Section 2(1)(iii) of the Act does not create any additional or the `so-
called statutory tenant' on his death, but seeks to restrict the right of the
heirs of such tenant in respect of residential premises.
As the
status and right of a contractual tenant even after determination of his
tenancy when the tenant is at times described as the statutory become entitled
by virtue of the provisions of the Act to inherit the status and position of
the statutory tenant on his death, the Legislature which has created this right
has thought it fit in the case of residential premises to limit the rights of
the heirs in the manner and to the extent provided in Section 2(1)(iii). It appears
that the Legislature has not thought it fit to put any such restrictions with
regard to tenants in respect of commercial premises in this Act.
Accordingly,
we hold that if the Rent Act in question defines a tenant in substance to mean
`a tenant who continues to remain in possession even after the termination of
the contractual tenancy till a decree for eviction against him is passed', the
tenant even after the determination of the tenancy continues to have an estate
or interest in the tenanted premises and the tenancy rights both in respect of
residential premises and commercial premises are heritable. The heirs of the
deceased tenant in the absence of any provision in the Rent Act to the contrary
will step into the position of the deceased tenant and all the rights and
obligations of the deceased tenant including the protection afforded to the
deceased tenant under the Act will devolve on the heirs of the deceased tenant.
As the protection afforded by the Rent Act to a tenant after determination of the
tenancy and to his heirs on the death of such tenant is a creation of the Act
for the benefit of the tenants, it is open to the Legislature which provides
for such protection to make appropriate provisions in the Act with regard to
the nature and extent of the benefit and protection to be enjoyed and the
manner in which the same is to be enjoyed. If the Legislature makes any
provision in the Act limiting or restricting the benefit and the nature of the
protection to be enjoyed in a specified manner by any particular class of heirs
of the deceased tenant on any condition laid down being fulfilled, the benefit
of the protection has necessarily to be enjoyed on the fulfillment of the
condition in the manner and to the extent stipulated in the Act. The Legislature
which by the Rent Act seeks to confer the benefit on the tenants and to afford
protection against eviction, is perfectly competent to make appropriate
provision regulating the nature of protection and the manner and extent of
enjoyment of such tenancy rights after the termination of contractual tenancy
of the tenant including the rights and the nature of protection of the heirs on
the death of the tenant. Such appropriate provision may be made by the
Legislature both with regard to the residential tenancy and commercial tenancy.
It is, however, entirely for the Legislature to decide whether the Legislature
will make such provision or not. In the absence of any provision regulating the
right of inheritance, and the manner an extent thereof and in the absence of
any condition being stipulated with regard to the devolution of tenancy rights
on the heirs on the death of the tenant, the devolution of tenancy rights must
necessarily be in accordance with the ordinary law of succession." It was,
therefore, held that in the absence of any definition the legal heirs of the
tenants who succeeded by intestate succession became the tenants under the Rent
Act for the purpose of continuance of tenancy rights had by the tenant even if
it is after the determination of the contractual tenancy. The statutory tenancy
steps in and gives protection to the legal heirs of the deceased tenant.
It is
true that in that case no distinction was made by this Court between
testamentary succession or intestate succession. As far as testamentary
succession is concerned, this Court had considered that question in Bhavarlal's
case (supra). In that case, Section 5(11) of the Bombay Rent Act defines the
tenant and clause (c) defines the "restricted tenancy rights" in favour
of the family members of the tenant. In that context, the question arose in
that case whether a tenant can bequeath a Will in favour of a stranger?
Considering the ratio in Gian Devi's case (supra) and the object of the Act,
this Court had held that the tenant cannot by a Will bequeath leasehold right
in favour of strangers and induct the stranger as tenant of the demised
premises against the will of the landlord and the landlord is not bound by such
a bequest to recognise the legatee as a tenant. It is, thus, settled law that
though lease hold interest may be bequeathed by a testamentary disposition, the
landlord is not bound by it nor a stranger be trusted as tenant against the
unwilling landlord.
In
view of the above settled legal position, the question is: whether the bequest
made by Mullick in favour of the respondent is valid in law and whether the
Governor is bound to recognise him? It is seen that clauses (7), (8) and (12)
are independent and each deals with separate situation. Clause (7) prohibits
sub-lease of the demised land or the building erected thereon without prior
consent in writing of the Government. Similarly, clause (8) deals with transfer
of the demised premises or the building erected thereon without prior
permission in writing of the Government. Thereunder, the restricted covenants
have been incorporated by granting or refusing to grant permission with right
of pre-emption. Similarly, clause (12) deals with the case of lessee dying
after executing a Will. Thereunder, there is no such restrictive covenant contained
for bequeath in favour of a stranger. The word `person' has not been expressly
specified whether it relates to the heirs of the lessee. On the other hand, it
postulates that if the bequest is in favour of more than one person, then such
persons to whom the leasehold right has been bequeathed or the heirs of the
deceased lessee, as the case may be, shall hold the said property jointly
without having any right to have a partition of the same and one among them
should alone be answerable to and the Government would recognise only one such
person. In the light of the language used therein, it is difficult to accept
the contention of Shri V.R., Reddy, that the word `person' should be construed
with reference to the heirs or bequest should be considered to be a transfer.
Transfer
connotes, normally, between two living persons during life; Will takes effect
after demise f the testator and transfer in that perspective becomes
incongruous.
Though,
as indicated earlier, the assignment may be prohibited and Government intended
to be so, a bequest in favour of a stranger by way of testamentary disposition
does not appear to be intended, in view of the permissive language used in
clause (12) of the covenants. We find no express prohibition as at present
under the terms of the lease. Unless the Government amends the rules or imposes
appropriate restrictive covenants prohibiting the bequest in favour of the
strangers or by enacting appropriate law.
There
would be no statutory power to impose such restrictions prohibiting such
bequest in favour of the strangers. It is seen that the object of assignment of
the Government land in favour of the lessee is to provide him right to
residence. If any such transfer is made contrary to the policy, obviously, it
would be defeating the public purpose. But it would be open to the Government
to regulate by appropriate covenants in the lease deed or appropriate statutory
orders as per law or to make a law in this behalf.
But so
long as that is not done and in the light of the permissive language used in
clause (12) of the lease deed, it cannot be said that the bequest in favour of
strangers inducting a stranger into the demised premises or the building
erected thereon is not governed by the provisions of the regulation or that prior
permission should be required in that behalf. However, the stranger legatee
should be bound by all the covenants or any new covenants or statutory base so
as to bind all the existing lessees.
Under
these circumstances, the action taken by the respondent cannot be said to be
vitiated by an error of law.
The
High Courts, therefore, has not committed any manifest error of law warranting
interference. As stated earlier, this order does not preclude the Government
from taking such step as is warranted under law to prohibit transfer in
violation of the covenants or defeating the public policy.
The
appeal is accordingly dismissed. No costs.
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