Full Judgment Text
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PETITIONER:
SARDAR TOTA SINGH
Vs.
RESPONDENT:
M/S GOLD FIELD LEATHER WORKS, BOMBAY.
DATE OF JUDGMENT15/01/1985
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
VENKATARAMIAH, E.S. (J)
ERADI, V. BALAKRISHNA (J)
CITATION:
1985 AIR 507 1985 SCR (2) 563
1985 SCC (1) 414 1985 SCALE (1)22
ACT:
Bombay Rents, Hotels and Lodging House Rates Control
Act, 1947 Section 15 (2)-Scope of.
Validation of sub-letting by the 1959 Ordinance Whether
sub-tenancies permitted by contract between landlord and
tenant are included.
A building was let out to the respondent partnership
firm, who sublet a portion of a shop on the ground floor to
one Manek Chand which was further sub-let by the latter to
the appellant in 1952.
HEADNOTE:
The respondent filed a suit in 1962 against the
subtenant for possession of the premises on the ground of
unlawful subletting and carrying out unauthorised structural
alterations. The sub-tenant resisted the suit and filed a
written statement. During the pendency of the suit the
appellant applied to the Court for being added as a
defendant but the application was opposed by the respondent
and was rejected. The respondent’s suit was ultimately
decreed for possession in accordance with a compromise
between the parties.
The appellant thereafter filed a suit in 1966 for a
declaration that he was a lawful tenant in possession of the
premises and for an injunction the restraining respondent
from executing the decree he had obtained against the sub-
tenant. It was pleaded that he was in occupation and
exclusive possession as a lawful subtenant for more than
fifteen years to the knowledge of the respondent and that
the decree in the respondent’s suit was a collusive one and
that he had become a direct tenant of the respondent under
s. 14 of the Bombay Rents, Hotel and Lodging House Rates
Control Act, 1947.
The respondent filed a written statement and pleaded
that they were tenants of the entire building and that they
had sublet a portion of the premises to a sub-tenant who
could not sub-let the premises further to the appellant and
therefore the appellant’s subtenancy was invalid.
564
The Court of Small Causes decreed the suit. The
respondent filed an appeal before the Appellate Bench of the
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Court of Small Causes which dismissed the appeal and
affirmed the trial judge’s finding that the premises had
been sublet by Manekchand to the appellant, and that on May
21, 1959 when the Bombay Rents, Hotel and Lodging House
Rates Control (Amendment) Ordinance 1959 was promulgated and
sub-s.(2) of s. 15 was introduced into the Bombay Rent Act
the subtenant was not in possession. the Appellate Bench
rejected the submission of the appellant that he had paid
rent directly to the respondent and therefore had been
accepted as a tenant. It found that no rent had been paid by
the appellant to the respondent after Manek Chand statutory
tenancy which followed the termination of his contractual
tenancy by service of notice had itself been terminated by
the decree for possession in the respondent’s suit. It
further held that as the appellant was undisputably in
possession on May 21, 1959, the sub-tenancy in his favor by
Maneck Chand must be deemed to be a valid sub-tenancy and
followed the view in Josephy Santa Vincent v. Ambico
Industries. 70 Bombay LR 224 while dismissing the
respondent’s appeal.
The respondent filed a Special Civil Application in the
High Court and the High Court set aside the order of the
Appellate Bench and dismissed the appellant’s suit, taking
the view that having regard to certain observations made in
Jai Singh Moraji & Ors v. M/s. Sovani Pvt Ltd. & Ors [1973]
2 SCR 603, an extended construction of sub-s. (2) of s. 15
of the Bombay Rent Act so as to include a sub-tenancy
created by a sub-tenant was not justified.
In the appeal to this Court, on the question whether
the appellant could rightly claim tenancy rights in the
premises and therefore nullify the enforcement as against
him of the decree in the respondent’s suit.
Allowing the Appeal,
^
HELD: 1. There can be no doubt that upon the amendment
of sub-s. (I) of s.l5 by the Bombay Rents, Hotel and Lodging
House Rates Control Amendment Ordinance 1959, which was
brought into force on May 21, 1959 and by its related Act,
the prohibition against sub-letting did not operate in those
cases, where the sub-letting was permitted by contract
between the landlord and tenant. In all such cases, if the
landlord had permitted the tenant under a contract between
them to sub-let the premises, no question would arise of a
need to validate those subtenancies. The relevant amendment
in sub-s. (1) of s.15 was deemed to have always been part of
the sub-section. [569C-D]
2. Sub-s. (2) of s.l5 raises the ban from all sub-
letting effected before May 21, 1959, the date of
commencement of the Ordinance, provided the provisions of
that sub-section are fulfilled. Any such sublease shall be
deemed to be valid provided the sublessee has entered into
possession before the date of commencement of the Ordinance
and has continued in possession on such date. This is an
special provision and marks a departure from the general
law. It does not refer to sub-tenancies which are permitted
by contract between the landlord and the tenant, but relates
to sub-tenancies which are not so protected.
[569F-F]
565
3. Sub-s. (2) of s.15 relates to sub-tenancies not
permitted by contract A between the landlord and tenant and
which would, but for the said sub-s. (2), fall within the
prohibition enacted in the amended sub-section (I) of s. 15.
[570C]
4. In the instant case, the respondent Goldfiled was a
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Tenant, Manik Chand was a lawful sub-tenant and the latter
had created a further sub-tenancy in favor of the appellant.
If regard be had to clause (a) of sub-section (ii) of
section 5 it is apparent that in respect of the subsequent
sub-tenancy Manek Chand could be described as a tenant and
the appellant as his sub-tenant. And if that is so, there is
no reason why the appellant’s sub-tenancy should not be
regarded as a valid sub-tenancy inasmuch as it was created
before May 21, 1959 and he entered into possession of the
premises before that date and was continuing in possession
on that date. [571A-B]
Jai-Singh Morarji & Ors. v. M/s Sovani Pvt. Ltd. &
Ors, [197312 S.C.R. 603, referred to.
P.D. Awani v. Kavashah Dinshah Mulla, (1953) 56 Bombay
Law Reporter 467 and Woman Shrinivas Kini v. Ratilal
Bhagwandas & Co., [1959] Supp. 2 S.C.R. 217, held
inapplicable. [572F]
In the instant case, having regard to the concession
made on behalf of the respondent in the Court below that
Manekchand was a lawful tenant, which necessarily implies a
valid contract of tenancy between the respondent and Manek
Chand, the latter was to be regarded as a contractual tenant
when he sub-let the premises to the appellant. No question,
therefore arises of a statutory tenant purporting to sub-let
his interest to a sub-tenant. [572F]
Anand Nivas (P) Ltd.. v. Anandji, [1964] 4 S.C.R. 892,
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 682 of
1981.
From the Judgment and Order dated the 21st June,
1980 of the High Court of Bombay in Special Civil
Application No. 2039 of 1975.
V.M. Tarkunde, P.H. Parekh and R.N. Karanjawala for
the Appellant.
Soli J. Sorabjee, V.N. Ganpule and Mrs V.D. Khanna for
the Respondents.
The Judgment of the Court was delivered by
PATHAK, J. This appeal by special leave arises out of
a suit for a declaration and injunction and aises questions
concerning the interpretation and application of certain
provisions of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947.
566
Peerbhoy Mansion is a building situated at Vithalbhai
Patel Road in the city of Bombay. It was let to a
partnership firm, Gold Field Leather Works. Gold Field
sublet a portion of a shop on the ground floor to Manekchand
Bhikabhai. The sub-tenant Manekchand sublet it further to
Sardar Tota Singh in 1952.
Gold Field filed a suit in 1962 against Manekchand for
possession of the premises on the ground of unlawful
subletting and carrying out unauthorised structural
alterations. Manekchand resisted the suit and filed a
written statement During the pendency of the suit Tota Singh
applied to the Court for being added as a defendant, but the
application was opposed by Gold Field and was rejected. Gold
Field’s suit was ultimately decreed for possession in
accordance with a compromise between the parties.
Tota Singh then filed Suit No. 2454 of 1966 for a
declaration that he was a lawful tenant in possession of the
premises and for an injunction restraining Gold Field from
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executing the decree which that firm had obtained against
Manekchand It was pleaded that he was in occupation and
exclusive possession as a lawful sub-tenant for more than
fifteen years to the knowledge of Gold Field, that the
decree in Gold Field’s suit was a collusive decree, that as
the decree had been passed against Manekchand he, Tota
Singh, had become a direct tenant of Gold Field under s. 14
of the Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947 (the "Bombay Rent Act") and that therefore he was
entitled to the declaration and injunction sought in the
suit.
Gold Field filed a written statement in the suit and
pleaded that they were tenants of the entire building and
had sublet the premises to Manekchand, that Manekchand as
sub-tenant could not sub-let the premises further to Tota
Singh, and therefore Tota Singh’s sub-tenancy was invalid.
The Court of Small Causes tried the suit and decreed
it on April 17, 1973. Gold Field appealed. The Appellate
Bench of the Court of Small Causes dismissed the appeal on
April 30, 1975. The Appellate Bench affirmed the trial
Judge’s finding that the premises had been sublet by
Manekchand to Tota Singh in 1952, and that on May 21, 1959,
when the Bombay Rents, Hotel and Lodging House Rates Control
(Amendment) Ordinance 1959 was promulgated and sub-s. (2) of
s. 15 was introduced into the Bombay Act, Manekchand was not
in possession. In the attempt to prove that he was a lawful
567
sub-tenant, Tota Singh urged before the Appellate Bench that
Gold A Field had permitted Manekchand to sublet the premises
to him, but this contention was not entertained by the
appellate Bench as there was neither any plea nor any
evidence to support it. The Appellate -Bench also rejected
the submissions of Tota Singh that he had paid rent directly
to Gold Field and therefore had been accepted as a tenant by
them. It found that no rent had paid by Tota Singh to Gold
Field after Manekchand’s statutory tenancy, which followed
the termination of this contractual tenancy by service of
notice had itself been terminated by the decree for
possession in Gold Field’s suit One road seemed still open
to Tota Singh to establish the validity of his tenancy. fore
the Appellate Bench a concession had been made by counsel
for Gold Field. It was conceded on behalf of Gold Field that
Manekchand was their lawful sub-tenant. On that Tota Singh
urged that if Manekchand, although a sub-tenant, was
regarded as a "tenant" by reason of sub s. (11) of s. 5 of
the Bombay Rent Act, then the benefit of sub-s. (2) of s. 15
should be extended to him. He was in possession on May 21,
1959 as the sub-tenant of a lawful tenant and, therefore,
the submission proceeded, his subtenancy would be deemed to
be valid This contention found favor with the Appellate
Bench. It held that as Tota Singh was undisputedly in
possession on May 21, 1959, the sub-tenancy in his favor by
Manekchand must be deemed to be a valid sub-tenancy. At this
point a debate was raised whether the benefit of sub-s. (2)
of s. 15 had to be confined to a sub-tenancy created by a
tenant or could be extended to a sub-tenancy created by a
sub-tenant. Following the view taken by the Bombay High
Court in Josephy Santa Vincent v Ambico Industries.(1) the
Appellate Bench answered that question in favor of Tota
Singh and dismissed Gold Field’s appeal.
Gold Field filed a Special Civil Application in the
High Court against the order of the Appellate Bench of the
Court of Small Causes and on June 21, 1980 the High Court
set aside the decree passed by the Appellate Bench and
dismissed Tota Singh’s suit. The High Court took the view
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that having regard to certain observations made by this
Court in Jai Singh Morarji and Ors. v. M/s Sovani Pvt. Ltd.
and Ors.(2) an extended construction of sub s. (2) of s. 15
of the Bombay Rent Act so as to include a sub-tenancy
created by a sub-tenant was not justified.
(1) 70 Bombay Law Reporter 224.
(2) [1973] 2 S.C.R. 603.
568
Tota Singh died during the pendency of the appeal in
the High Court, and accordingly this appeal has been
preferred by his legal representatives.
The material question before us is whether Tota Singh
could rightly claim tenancy rights in the premises and
therefore nullify the enforcement as against him of the
decree in Gold Field’s suit.
It appears that sub-s. (I) of s. 15 of the Bombay Rent
Act as originally enacted prohibited the sub-letting by a
tenant of premises let to him, except in the particular
cases notified by the State Government under the proviso to
that sub-section. A sub letting by the tenant constituted a
ground for his eviction under clause (e) of sub . (1) of s.
13. The rigour of the provision was relaxed by the Bombay
Rents, Hotel and Lodging House Rates Control (Amendment)
Ordinance 1959, which was brought into force on May 21,
1959. The Ordinance was replaced by the Bombay Rents, Hotel
and Lodging House Rates Control (Amendment) Act 1959 In
consequence, sub-s. (1) of s. 15 of the Act stood amended
from the inception of the Bombay Rent Act so that the
prohibition against sub letting incorporated in it operated
’subject to any contract to the contrary". Simultaneously,
sub-s. (2) was inserted in s. 15. That provision was
subsequently substituted by Maharashtra Act 38 of 1962 by
the following provision with effect from May 21, 1959:
"15 (2) The prohibition against the sub-letting
of the whole or any part of the premises which have
been let to any tenant, and against the assignment or
transfer in any other manner of the interest of the
tenant therein, contained in sub-section (1), shall,
subject to the provisions of this sub section, be
deemed to have had no effect before the commencement of
the Bombay Rents, Hotel and Lodging House Rates Control
(Amendment) Ordinance, 1959, in any area in which this
Act was in operation before such commencement; and
accordingly, notwithstanding anything contained in any
contract or in the judgment, decree or order of a
court, any such sub-lease assignment or transfer or any
such purported sub-lease, assignment or transfer in
favor of any person who has entered into possession
despite the prohibition in sub-section (1), as a
purported sub-lease, assignee or transferee and has
continued in possession at the commencement of the said
Ordinance, shall be deemed to be valid and effectual
for all purposes, and any tenant
569
who has sub-let any premises or part thereof, assigned
or A transferred any interest therein, shall not be
liable to eviction under clause (e) of sub-section (1)
of section 13".
It is contended for-the appellant that as the
respondent conceded before the Court of Small Causes that
Manekchand was a lawful sub-tenant, the High Court should
have held that a sub-tenancy created by such sub-tenant must
be deemed valid by reason of sub-s. (2) of s. 15 of the
Bombay Rent Act. It is urged that the High Court erred in
construing Jai Singh Morarji (supra) as laying down the
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contrary. The case for the respondent is that sub-s. (2) of
s. 15 benefits a sub-tenancy created by the original tenant
only and does not extend to a sub-tenancy created by a sub-
tenant.
There can be no doubt that upon the amendment of sub-
s. (1) of s. 15 by the Ordinance and by its related Act the
prohibition against sub-letting did not operate in those
cases where the sub-letting was permitted by contract
between the landlord and tenant. In all such cases, if the
landlord had permitted the tenant under a contract between
them to sublet the premises, no question would arise of a
need to validate those sub-tenancies. The relevant amendment
in subs. (1) of s. 15 was deemed to have always been part of
the sub-section. It is in this light that we must determine
the scope of sub-s. (2) of s. 15. Sub-s. (2) of s. 15 raises
the ban from all sub-letting effected before May 21, 1959,
the date of commencement of the Ordinance, provided the
provisions of that sub-section are fulfilled. Any such sub-
lease shall be deemed to be valid provided the sub-lessee
has entered into possession before the date of commencement
of the Ordinance and has continued in possession on such
date. This is an especial provision and marks a departure
from the general law. It does not refer to sub-tenancies
which are permitted by contract between the landlord and the
tenant, but relates to sub-tenancies which are not so
protected. It will be noted that the removal by sub-s. (2)
of s. 15 of the prohibition is limited only to those sub-
tenancies which were created before May 21, 1959. Such a
limitation would be inappropriate to sub-tenancies permitted
by contract which could be created regardless of whether
they were brought into existence before May 2l, 1959 or
after that date. Also, the sub-tenancies covered by sub-s
(2) of s. 15 would be regarded as valid only if the sub-
tenant had entered into possession before May 21, l959 and
was continued in possession on that date. Such a requirement
would be wholly inconsistent in the case of sub-tenancies
permitted by contract. Inasmuch as sub-s.(2) of s. 15
specifically attaches the condition that the
570
sub-tenant should have been in possession before the
commencement of the Ordinance and should have continued in
possession on that date, it is apparent that such a
provision could be related only to illegal sub-tenants, that
is to say sub-tenants who were let in and given possession
without any contractual right conferred by the land lord on
the tenant to do so. The protection conferred by sub-s. (1)
of s. 15 is necessary for such-tenancies only, and not for a
sub tenancy which is permitted by the terms of the contract
and which therefore falls altogether outside the prohibition
embodied in sub-s.(l) of s. 15. The result, therefore, is
that sub-s. (2) of s. 15 relates to sub tenancies not
permitted by contract between the landlord and tenant and
which would. but for the said sub-s. (2), fall within the
prohibition enacted in the amended sub-section (1) of s. 15.
In the present case, it was conceded on behalf of Gold
Field before the Appellate Bench of the Court. Of Small
Causes that Manekchand was a lawful sub-tenant He could not
have been a lawful sub-tenant by virtue of sub-s. (2) of s.
15 because on May 21, 1959 he was not in possession of the
premises, which in fact had already passed as early as 1952
into the possession of Tota Singh. Manek chand could have
been lawful sub-tenant only on the assumption that the sub-
tenancy was permitted under the contract between Gold Gold
Field and their landlord. As the existence of such a term in
the contract would be a question of fact, the concession by
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counsel for Gold Field must be regarded as binding in this
case on Gold Field. It is urged for the respondent that the
concession made by counsel for Field can be of no avail
because any agreement by a tenant creating a sub-tenancy,
being directly opposed to sub-s. (I) of s. 15 as originally
enacted, would be void The submission, it seems to us, is
without force. It must be remembered that sub-s. (I) of s.
15 was amended by inserting the words "but subject to any
contract to the contrary" in 1959 retrospectively, the words
being deemed always to have been inserted in that sub-
section. We must take it by reason of the legal fiction
employed that those words were already part of the sub-
section when Gold Field agreed to sub-let the premises to
Manekchand. The cases, P.D. Aswani v. Kavashah Dinshah
Mulla(l) and Waman Shriniwas Kini v. Ratilal Bhagwandas and
Co.,(2) on which learned counsel for the respondent relies,
were decided before sub-s. (1) of s. 15 was amended and
therefore did not take into account the effect of such
amendment.
(1) [1953] 56 Bombay Law Reporter 467.
(2) [1969] supp. 2 S.C.R. 217.
571
Therefore, the present case is one where Gold Field is
a tenant, A Manekbhai is a lawful sub-tenant and the latter
has created a further sub-tenancy in favor of Tota Singh.
The question is whether the further sub-tenancy can fall
within the scope of sub-s. (2) of s. 15. Now, if regard be
had to clause (I) of sub-s (l l) of s. 5, it is apparent
that in respect of the subsequent subtenancy Manekbhai could
be described as a tenant and Tota Singh as his sub-tenant
And if that is so, there is no reason why Tota Singh’s sub-
tenancy should not be regarded as a valid sub-tenancy in as
much as it was created before May 21, 1959 and he had
entered into possession of the premises before that date and
was continuing possession on that date.
But it is urged on behalf of Gold Field that this
Court has held in Jai Singh Morarji (supra) that sub-s (2)
of s. 15 does not validate a sub-tenancy created by a sub-
tenant. That was a case where the original landlord filed a
suit against the tenant Ochhavlal for possession on the
ground, inter alia, of illegal subletting by Ochhavlal. The
suit was decreed, and the plaintiff obtained possession.
Ochhavlal had sub-l t the premises to Sovani and Sovani had
sub-let them to a private limited company. On application by
the Company against dispossession in the execution
proceedings, the trial court upheld the Company’s claim to
possession, but this Court ultimately rejected the Company’s
claim and upheld the right of the original landlord to
possession. The facts of that case disclose that there were
two prohibited" sub-tenancies, the first was created by
Ochhavlal in favor of Sovani and the subsequent was created
by Sovani in favor of the Company. The benefit of sub-s. (2)
of s 15 could have been extended to Sovani only if the
conditions of the sub-section were satisfied If they were
satisfied in the case of Sovani, the benefit could not be
extended again in favor of the Company. That would obviously
be so because the condition as to possession on May 21, 1959
could not possibly be satisfied by the subsequent sub-tenant
if the original subtenant was in possession on that date.
If, however, the subsequent sub-tenant was in possession on
May 21, 1959, then clearly neither sub-tenancy can be
regarded as valid. To be valid, the first subtenancy had to
satisfy the condition of possession by that-sub-tenant on
May 21, 1959, which ex hypothesi was not possible. And if
the original sub-tenancy was invalid the subsequent sub-
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tenancy would also be invalid. The subsequent sub-tenancy
would be valid only if the original sub-tenant had legal
interest to transfer to the subsequent sub-tenant. It is in
the light of this analysis that the decision of this Court
in Jai Singh Morarji (supra) needs to be appreciated, in
particular the passage on page 607 of the Report which
reads:
572
"The answer to the question is whether the
respondent Private Company was a sub-tenant prior to
1959 and continued in possession at the commencement of
the Ordinance in 1959. Ochhavlal in the present case
gave the sub-lease to Sovani before the Ordinance. It
is an indisputable feature in the present case that
Sovani did not continue in possession at the
commencement of the Ordinance of 1959. Sovani became a
Director of the Private Company. It is the Private
Company which claims to be a sub-lessee. The Private
Company was in the first place not a sub-lessee of the
tenant but a subsequent assignee from the sub-lessee.
Secondly, SOvani who was the sub-lessee not in
possession on the date of the Ordinance on 21 May,
1959. It was the Private Company which was in
possession. Therefore, the Private Company is not
within the protection of section 15 (2) of the Act "
The learned Judges were not unaware of the terms of
sub-s. ( 1) of s. 5, as is evident from the passage on page
608 of the Report.
It is then urged by learned counsel for the respondent
that clause (a) of sub-s. (11) of s. S of the Bombay Rent
Act cannot be called in aid by the appellant as sub-s. (1)
of s. 15 applies to contractual tenants only. We are
referred to Anand Nivas (P) Ltd. v. Anandji,(1) where this
Court laid down that the expression "tenant" in sub-s. (1)
of s. 15 of the Bombay Rent Act means a contractual tenant
and not a statutory tenant. The submission can be of no
assistance to the respondent. Having regard to the
concession made by counsel for Gold Field in the court below
that Manekchand was a lawful tenant, which position, as we
have discussed earlier, necessarily implies a valid contract
of tenancy between Gold Field and Manekchand the latter must
be regarded as a contractual tenant when he sublet the
premises to Tota Singh. No question arises of a statutory
tenant purporting to sub-let his interest to a sub-tenant.
Upon the aforesaid considerations, in our judgment the
appeal must succeed.
The appeal is allowed with costs.
N.V.K. Appeal allowed.
(1) [196414 S.C.R. 892.
573