Full Judgment Text
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PETITIONER:
ANAND NIVAS (PRIVATE) LTD.
Vs.
RESPONDENT:
ANANDJI KALYANJI PEDHI & ORS.
DATE OF JUDGMENT:
05/09/1963
BENCH:
SARKAR, A.K.
BENCH:
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-Bom-
bay 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
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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 re-
893
maining 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 sub-
letting by a statutory tenant of a part of the demised
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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 sub-
tenant 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.
JUDGMENT:
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 res-
pondents.
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 obtaineda 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
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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 sub-
tenant 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
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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 " sub-
let" 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
any one 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 sub-
letting 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
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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
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4(1)(h) of the English Act of 1923 dealt only with con-
tractual 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 sub-
letting 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 con-
tractual 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 sub-
letting 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
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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 pos-
session 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 pos-
session 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
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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 -(Amend-
ment) 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 con-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 20
tractual 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 sub-
letting 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 unchallengable. 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 rea-
sons 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-let-
ting 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 con-
tended 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 pendens 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 Veyin-
58-2 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 20
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 men-
tionEd in 0. 21, r. 35 of the Code, namely, to obtain de-
livery 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 sub-
tenant 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.
739.
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 injuction 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, Ahmedabad 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 20
refusing to grant an injuction. 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 Goveronr 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 sub-
let, 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 pro-
hibition 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 ex-
909
piry 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 20
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
ashe retains possession, to the benefit of all the terms
andconditions of the original contract of tenancy so far
asthey 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,
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and we are unable to hold-assuming that the tenant was
entitled to sublet the premises under the terms of the
Iease-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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 20
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 sub-
section (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 sublessees, 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 20
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 assign-
ed, transferred his interest in the premises or has unlaw-
fully sublet the premises. A statutory tenant has no inte-
rest 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 con-
tractual 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 re-
cover possession if the tenant has without being so autho-
rised 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 con-
tract 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 20
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.(. Sub-
section(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) Ordi-
nance, 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 vali-
date 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 20
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 sub-
tenants. 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 sublessee 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 sub-
tenant 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
therefrom. The landlord then filed a suit against the sub-
tenant 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
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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 ’ut
lite 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 some what clum-
sily 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 cir-
cumstances, 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 Proce-
dure) and it appears that the Legislature intended to make
the Act applicable only to transfers of title to immoveables
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 res-
pect 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 Ahmedabad 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 aplies 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 regis-
920
tration. The section in terms applies only to notices in
respect of suits or proceedings which relate to immoveable
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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 Reorganisation 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 condi-
tions 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.
921