Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER:
M/S. A. C. ESTATES
Vs.
RESPONDENT:
M/S. SERAJUDDIN & CO. AND ANOTHER
DATE OF JUDGMENT:
07/05/1965
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
SHAH, J.C.
MUDHOLKAR, J.R.
CITATION:
1966 AIR 935 1966 SCR (1) 235
ACT:
West Bengal Premises Tenancy Act (12 of 1956), s. 16(3)-
Scope of.
HEADNOTE:
The appellant, the owner of certain premises in Calcutta,
leased them out and the respondent was inducted as a sub-
tenant by the tenant in June 1954. In July. 1954, the
appellant issued notice to the tenant determining the
tenancy from the end of August 1954. In September 1954, the
appellant filed a suit for ejectment of the tenant. While
the suit was pending, the West Bengal Premises Tenancy Act,
1956, came into force on 31st March 1956. The respondent
filed a petition under s. 16(3) of the Act, praying that the
Controller may declare that the interest of the tenant had
ceased, that the respondent had become a direct tenant under
the appellant and for fixation of the rent. On 9th August
1956, the Controller made an order declaring the respondent
as a direct tenant and adjourned the proceedings for
evidence regarding the rent payable. On 22nd August 1956,
the ejectment suit was decreed and so, the appellant applied
to the Controller praying that the respondent’s petition
under s. 16(3) may be dismissed. The Controller dismissed
the respondent’s application on the day fixed for
determining the rent. The respondent’s appeal to the Court
of Small Causes was allowed. The appellant then filed a
petition under Art. 227 of the Constitution to the High
Court, and it was dismissed except as to fixation of rent.
In his appeal to this Court, the appellant contended that :
(i) the order of 9th August 1956 was not a final order and
therefore the Controller could rescind it, and (ii) the
respondent was no, entitled to invoke s. 16(3), because
the tenant had been ejected on 22nd August 1956.
HELD : (i) The High Court was right in holding that the
Controller had no power to set aside the order that had been
made on 9th August 1956, for it was right when it was made.
[242 C-D]
The word "tenant" is defined in s. 2(h) of the Act to
include any person continuing in possession after the
termination of his tenancy, but shall not include any person
against whom any decree or order for eviction had been made
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7
by a court of competent jurisdiction. There is nothing
repugnant in the subject or context of s. 16(3) to take the
view that the definition of "tenant" in s. 2(h) would not
apply to a case under s. 16(3). Therefore, the tenant
continued to be a tenant up to 22nd August 1956, and the
respondent, who became a sub-tenant in June 1954, continued
:to be sub-tenant after the coming into force of the Act.
[240 E-G]
Under the first part of s. 16(3), the Controller has to
declare by order that the tenant’s interest in the premises
sub-let has ceased and that the sub-tenant has become a
direct tenant under the landlord; and under the second part,
the Controller has to fix the rents payable to the landlord,
by the tenant and the sub-tenant. [240 1-1-241 B]
In the instant case after having made such a declaration
under the first part of the section, in favour of the
respondent, it was not open
sup./65-16
236
to the Controller (while proceeding to fix rent under the
second part) to rescind the order which had become final so
far as the Controller was concerned, on some ground which
supervened after the date of the order nor can the
Controller’s latter order be justified under s. 29(5) of the
Act, which gives the Controller the powers under ss. 151 and
152 and the power of review under O. 47, of the Civil
Procedure Code. [241 G-H; 242 B-C]
(ii)There is nothing in the contention of the appellant
that s. 16(3) would not apply to the respondent. [242 E]
In the present case, the benefit of the section was given to
the respondent not after 22nd August 1956, when the tenant
was evicted, but before that date, that is, on 9th August
1956. That order so far as it went was final and was not
open to review or cancellation by the Controller who had
thereafter only to fix the rent under the second part of the
section. [242 E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 258 of 1963.
Appeal by special leave from the judgment and order dated
May 6, 1960 of the Calcutta High Court in Civil Rule No.
3579 of 1959.
S. C. Mazumdar, for the appellant.
D. N. Mukherjee, for the respondent No. 1.
The Judgment of the Court was delivered by
Wanchoo, J. This is an appeal by special leave against the
judgment of the High Court of Calcutta. The appellant is
the owner of premises bearing No. P-16, Bentinck Street,
Calcutta. It had let out a suite on the second floor of the
premises on a monthly rental of Rs. 66 to Gee Tsing Po. The
exact date when the suite was let to Po is not on the record
but it was sometime before June 1954. In June 1954, Po sub-
let the entire suite to respondent No. 1, Messrs.
Serajuddin and Company, which will hereafter be referred to
as the respondent. In July 1954, the appellant gave notice
to Po terminating his tenancy with the expiry of August
1954. In September 1954 the appellant filed a suit against
Po praying for his ejectment on certain grounds under the
West Bengal Premises Rent Control (Temporary Provisions)
Act, No. XVII of 1950, which was then in force. That suit
was still pending when the West Bengal Premises Tenancy Act,
No. XII of 1956 (hereinafter referred to as the Act) came
into force from March 31, 1956. Section 16 (3) of the Act
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7
gave certain rights to sub-tenants. As the appeal turns on
the interpretation of that provision, it is necessary to set
it out here:-
"16(1)
237
.lm15
(2)Where before the commencement of this Act, the tenant,
with or without the consent of the landlord, has sublet any
premises either in whole or in part, the tenant and every
sub-tenant to whom the premises have been sublet shall give
notice to the landlord of such subletting in the prescribed
manner within six months of the commencement of the Act and
shall in the prescribed manner notify the termination of
such sub-tenancy within one month of such termination.
(3) Where in any case mentioned in sub-section (2) there
is no consent in writing of the landlord and the landlord
denies that he gave oral consent, the Controller shall, on
an application made to him in this behalf either by the
landlord or the sub-tenant within two months of the date of
the receipt of the notice of sub-letting by the landlord or
the issue of the notice by the sub-tenant, as the case may
be, by order declare that the tenant’s interest in so much
of the premises as has been sub-let shall cease and that the
subtenant shall become a tenant directly under the landlord
from the date of the order. "The Controller shall also fix
the rents payable by the tenant and such sub-tenant to the
landlord from date of the order. Rents so fixed shall be
deemed to be fair rent for purposes of this Act."
The respondent took action under s. 16(3) as apparently the
sub-letting to him by Po was not with the consent of the
landlord, and made an application thereunder to the
Controller on June 4, 1956 and prayed that the Controller
should declare that the interest of the tenant had ceased
and the respondent had become the tenant directly under the
landlord in respect of the suite in question. It was also
prayed that fair rent of the premises should be fixed at Rs.
66 per mensem.
The application was opposed on behalf of the appellant and
two main points were urged in that connection, namely,-(i)
The tenancy of Po had been lawfully terminated at the end of
August 1954 and the suit for his ejectment was pending in
the Small Cause Court and therefore the respondent could not
take advantage of the Act in 1956, for it never became a
sub-tenant in law before the Act was passed; and (ii) the
respondent was not in fact the tenant of Po from before
March 31, 1956.
The matter came up before the Controller on August 9, 1956.
The Controller accepted the respondent’s case that it had
become
238
the sub-tenant of Po in fact from June 9, 1954. The
Controller further held that in view of this fact, the
respondent became a sub-tenant under the appellant in law,
for in any case, the tenancy of Po had not been determined
till August 1954 even on the case put forward by the
appellant. He therefore made the following order :-
"The applicant (i.e. Serrajuddin & Co.) is
therefore entitled to be declared to be a
direct tenant under the O.P. No. 1. But this
will not be sufficient to dispose of the
present proceeding inasmuch as under section
16(3) of the Act of 1956 I am to fix the fair
rent payable by the tenant and that of the
sub-tenant."
He thereupon directed the Inspector to go to the locality
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7
and measure the accommodation of the disputed premises and
other similar premises in the neighborhood as might be shown
by either or both parties. The Inspector was also directed
to make note of advantages and amenities of all the premises
measured by him and thereafter submit his report as to the
fixation of fair rent. A date was fixed for the submission
of the Inspector’s report and thereafter the fair rent was
to be fixed.
Before however the Inspector’s report was received, the suit
for ejectment of Po pending in the Court of Small Causes was
decreed on August 22, 1956 and time was given to him to
vacate the same by the end of October 1956. Therefore on
September 11, 1956, the appellant filed what it called an
additional written objection. in that the appellant informed
the Controller that a decree for ejectment against Po had
been passed. It was urged that in view of that decree, Po
was no longer a tenant of the appellant and therefore the
respondent could not be a sub-tenant. The appellant prayed
that the application of the respondent was not maintainable,
in the circumstances and the Controller had no jurisdiction
to entertain the application and so the application should
be dismissed. The matter then came up before the Controller
on January 29, 1957. on. which date the appellant’s addi-
tional objection as well as the Inspector’s report was taken
up for consideration. The Controller took some evidence on
the question of fair rent and heard arguments on that day.
On February 11, 1957, the Controller passed final orders in
which he said that there was no tenant of the first degree
on that date, namely, 11th February 1957. As the ejectment
decree had been passed in accordance with the provisions of
the 1950-Act, the sub-tenant had by operation of that law
become a direct tenant.
239
So according to the Controller there was no subsisting
tenancy on February 1 1, 1957 and no order could be passed
under s. 16 (3) of the Act. He consequently dismissed the
application under s. 16(3), but passed no order as to
costs.
The respondent then went in appeal to the Court of Small
Causes, Calcutta, as provided in the Act. The Appeal Court
held that the order of August 9, 1956 made by the Controller
was final and further as the entire premises had been sublet
there was no necessity for any further determination of rent
as the sub-tenant would be liable to pay the rent payable by
the tenant. The Appeal Court therefore set aside the order
of the Controller dismissing the application of the
respondent and declared the respondent as tenant at a rental
of Rs. 66 per month.
The appellant then applied under Art. 227 of the
Constitution to the High Court and two main points were
urged on its behalf before the High Court, namely-
(i) The order of August 9, 1956 was not a
final order for the purpose of s. 16(3) and
therefore it was open to the Controller to
rescind that order when the further fact of
the ejectment decree of August 22, 1956 was
brought to his notice;
(ii)Section 16(3) applies only when the
original tenancy also subsists up to the date
of the final order which the Controller was
proposing to make on January 29, 1957 and
which he eventually refused to make because by
that date the tenancy of Po had come to an end
by the ejectment decree of August 22, 1956.
The High Court held that s. 16(3) was in two parts : first
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7
relating to the declaration of the sub-tenant as a tenant in
place of the tenant of the first degree, and second relating
to the fixation of fair rent for the part or whole of the
premises in respect of which the declaration was made. It
further held that the declaration of August 9, 1956 under
the first part of s. 16(3) was final and the Controller had
no jurisdiction after August 9, 1956 to rescind it. The
High Court pointed out that as on August 9, 1956, when the
order under the first part of s. 16(3) was passed, the
tenancy of the tenant of the first degree was subsisting,
action could be taken under s. 16(3) in favour of the
respondent. In this view of the matter, the revision
application of the appellant
240
was dismissed except as to the fixation of rent. It is this
order of the High Court which is being impugned before us by
special leave.
We are of opinion that the appeal must fail. There is a
clear finding of the Controller that the respondent was
inducted as a sub-tenant by Po in June 1954. At that time,
the appellant had not even given notice to Po determining
his tenancy. It was only in July 1954 that notice was given
to Po determining the tenancy as from the end of August
1954. Therefore, the respondent became a sub-tenant of the
tenancy which Po held under the appellant.
The next question is whether the respondent was entitled to
the benefit of the Act which came into force on March 31,
1956. On that date a suit was pending against Po based on
the notice given to him in July 1954 determining his
tenancy. The argument on behalf of the appellant is that as
Po’s tenancy had been determined by the end of August 1954
by virtue of the notice referred to above, the respondent
was no longer sub-tenant on March 31, 1956 as the tenancy of
the tenant of the first degree had itself come to an end.
This in our opinion is not correct. The word "tenant" is
defined in S. 2(h) of the Act to include any person
continuing in possession after the termination of his ten-
ancy but shall not include any person against whom any
decree or order for eviction had been made by a court of
competent jurisdiction. In view of this inclusive
definition of the word "tenant’ in the Act Po would continue
to be a tenant under the Act though his tenancy had been
determined by notice and he ceased to be a tenant only on
August 22, 1956 when the decree for ejectment was passed
against him. It is true that the definitions in s. 2 are
subject to anything being repugnant in the subject or
context. But we see nothing repugnant in the subject or
context of s. 16(3) to persuade us to hold that the
definition of tenant in S. 2(h) would not apply to a case
under S. 16(3). The Act is a measure for the protection of
tenants and sub-tenants and should not be so interpreted as
to take away the protection which it intends to give to
them. We are therefore of opinion that Po continued to be a
tenant up to August 22, 1956 and therefore the respondent
continued to be a sub-tenant after the coming into force of
the Act.
This takes us to the order of August 9, 1956. We have
already set out s. 16(3) and there is no doubt that it
consists of two parts. Under the first part, the Controller
has to declare by order that the tenant’s interest in so
much of the premises as has
241
been sublet has ceased and the sub-tenant has become a
tenant directly under the landlord from the date of the
order. The second part gives power to the Controller to fix
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7
rents payable by the tenant and such sub-tenant to the
landlord from the date of the order. It may be that both
orders under the two parts may be passed on the same date;
but it appears what usually happens is that the Controller
first declares that the tenant’s interest has ceased and the
sub-tenant has become a tenant directly under the landlord,
and thereafter proceeds to fix rent under the second part
after taking such further evidence as he considers
necessary. Even so, the order under the first part
declaring that the tenant’s interest has ceased and the sub-
tenant has become a tenant directly under the landlord must
be treated as final so far as the Controller is concerned
and it cannot be a mere interlocutory order, which could be
rescinded by the Controller while he is taking steps to fix
the rent as provided in the second part of s. 16(3). In
this connection our attention is drawn to the decision of
the Calcutta High Court in Anil Kumar Mukherjee v. Malin
Kumar Mazumdar(1), where it was held with reference to S. 29
of the Act that the words "final order" there mean the order
making the declaration and fixing the rent under s. 16(3) or
the order dismissing the application under s. 16(3). We do
not propose to consider whether Mukherjee’s case is
correctly decided. Assuming it to be correct, what it lays
down inter alia is that an order under the first part of s.
16(3) merely making a declaration without the further order
fixing rent under the second part thereof is not appealable
as a final order under S. 29. But what we are concerned
with here is whether it was open to the Controller after he
had made the order declaring the sub-tenant a direct tenant
under the landlord to set aside that order subsequently
while proceeding to fix rent on the basis of something which
transpired after that order had been passed. We are of
opinion that an order like that passed on August 9, 1956,
must be taken to be final insofar as it declares the tenancy
of the tenant of the first degree to have ceased and
declares the sub-tenant to be the direct tenant of the
landlord, so far as the Controller is concerned. After
having made such a declaration it is not open to the
Controller (while proceeding to fix rent under the second
part of that section) on some ground which supervenes after
the date of the order to rescind it. Our attention in this
connection is drawn to S. 29(5) of the Act which gives power
to the Controller to review his orders on the conditions
laid down under Order XLVII of the Code of Civil Procedure.
But this cannot be a case of review on the
(1) (1959-60) 64 C.W.N. 938.
242
ground of discovery of new and important matter, for such
matter has to be something which existed at the date of the
order and there can be no review of an order which was right
when made on the ground of the happening of some subsequent
event (see Rajah Kotagiri Venkata Subbamma Rao v. Raja
Vallanki Venkatrama Rao(1). Section 29 (5) further gives
power to the Controller to act under s. 151 or S. 152 of the
Code of Civil Procedure. Section 152 has no application in
the present case for there is no clerical or arithmetical
mistake here. Nor can the Controller in our opinion set
aside an order which was right when it was made, under s.
151 of the Code of Civil Procedure as there is no question
in such circumstances of subserving the ends of justice or
preventing the abuse of the process of the court. We are
therefore of opinion that the Controller had no power to set
aside the order that had been made on August 9, 1956 for it
was right when it was made. The view taken by the High
Court in this connection is correct.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7
It is equally clear that when the Controller passed the
order on February 11, 1957 dismissing the application under
S. 16(3) that order was appealable under S. 29(1), for it
was undoubtedly a final order within the meaning of s. 29(1)
and the respondent would be entitled to appeal therefrom.
Finally there is nothing in the contention of the appellant
that s. 16(3) would not apply because the tenant had been
ejected on August 22, 1956 and thereafter the sub-tenant
could not claim the benefit of S. 16(3). In the present
case the benefit of s. 16(3) was given to the sub-tenant not
after August 22, 1956 but before that date i.e. on August 9,
1956. That order so far as it went was final and was not
open to review or cancellation by the Controller who had
thereafter only to fix the rent under the second part of s.
16(3). While going on with the proceeding for fixation of
rent, the Controller could not set aside the order already
made under the first part of S. 16(3) on August 9, 1956 and
insofar as he did so, he acted without jurisdiction. The
Appeal Court was therefore right in setting aside the order
of the Controller and the High Court was equally right in
dismissing the application by the appellant except as to
fixation of rent.
The appeal therefore fails and is hereby dismissed with
costs.
Appeal dismissed.
(1) L.R. (1899-1900) 27 I.A. 197.
243