Unregistered partnership firms can claim statutory tenancy rights under Bombay Rent Act, rules Bombay High Court

The Applicant, All India Travel Services, entered into a leave-and-licence agreement with the original tenant, S. T. Upadhayay, on 30 May 1966 and occupied the suit premises as a licensee.

The Applicant was an unregistered partnership firm on the notified date, 1 February 1973, but was subsequently registered on 3 October 1973.

After disputes concerning possession arose, the Applicant instituted R.A.D. Suit No. 4088 of 1987 seeking a declaration of tenancy and injunctive relief.

The Trial Court accepted that the Applicant had been in possession under the leave-and-licence agreement but denied tenancy protection under Section 15-A of the Bombay Rent Control Act, holding that the firm was unregistered on 1 February 1973 and that the suit was not maintainable under Section 69(2) of the Indian Partnership Act, 1932.

The Appellate Court affirmed those findings and dismissed the appeal.

Whether an unregistered partnership firm in occupation of premises as a licensee on 1 February 1973 could claim the statutory tenancy protection conferred by Section 15-A of the Bombay Rent Control Act, 1947.

Whether Section 69(2) of the Indian Partnership Act, 1932 barred the Applicant’s claim on the ground that it sought enforcement of a right arising from a contract.

Whether the findings of the Trial Court and the Appellate Court denying the Applicant tenancy protection and dismissing the suit required interference in revision.

Section 15-A of the Bombay Rent Control Act, 1947, creates a statutory deeming fiction whereby a person occupying premises as a licensee on 1 February 1973 becomes the tenant of the landlord for the purposes of the Act.

Section 69(2) of the Indian Partnership Act, 1932, bars an unregistered firm from instituting a suit against a third party to enforce a right arising from a contract; the bar does not extend to enforcement of an independent statutory right.

The Court relied on Raptakos Brett & Co. Ltd. v. Ganesh Property, MANU/SC/0595/1998, which distinguishes contractual claims, barred by Section 69(2), from statutory claims that fall outside its scope.

It also referred to Dungarsi Ranchhodas Jayesh Niwas, Kozhikode v. Moolji Visanji, AIR 2004 Ker 314, for the principle that a statutory remedy under rent-control legislation is not defeated by Section 69(2).

Both courts had concurrently found that the Applicant was in possession of the premises under a leave-and-licence agreement from 1966 and continued in occupation on 1 February 1973.

Those findings satisfied the factual requirement for invoking Section 15-A.

The Applicant’s claim was not founded merely on the contractual leave-and-licence agreement; it sought recognition of a tenancy created by operation of statute.

Since Section 15-A conferred the tenancy status directly upon a qualifying licensee, the right asserted was statutory rather than contractual.

Accordingly, the Applicant’s lack of registration on the notified date did not attract the bar under Section 69(2), which only prevents an unregistered firm from enforcing contractual rights against a third party.

The fact that the Applicant was registered by the date of institution of the suit further supported maintainability, although registration on the notified date was not a condition for acquiring the statutory protection.

The statutory tenancy right was not barred by Section 69(2) of the Indian Partnership Act because it did not arise from enforcement of a contractual right.

The judgments of the Trial Court and the Appellate Court were set aside, and R.A.D. Suit No. 4088 of 1987 was allowed in terms of prayer clauses (A), (B), and (E).

The Respondents’ request for a stay was refused, as the Applicant was already in possession of the premises.