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PETITIONER: PANDIT KISHAN LAL

       Vs.

RESPONDENT: GANPAT RAM KHOSLA AND ANOTHER

DATE OF JUDGMENT: 17/04/1961

BENCH: SHAH, J.C. BENCH: SHAH, J.C. AIYYAR, T.L. VENKATARAMA DAS, S.K. KAPUR, J.L. HIDAYATULLAH, M.

CITATION:  1961 AIR 1554            1962 SCR  (2)  17

ACT: Urban   Tenancy-Eviction   of   tenant-Application-Maintain- ability-East  Punjab Urban Rent Restriction Act, 1949  (East Punjab III of 1949), s. 13-Transfer of Property Act, 1882 (4 of 1882), s. 108(q).

HEADNOTE: The  Singer  Sewing  Machine Company, respondent  2  in  the appeal,  was  the  tenant in respect of  a  shop  under  the appellant  and informed him that the company had closed  its premises, that respondent I will conduct his business in the shop, and that he will be personally responsible for payment of rent, and in spite of the appellant’s protest and without his  consent delivered possession of the said shop  room  to respondent  1.  Thereupon  the  appellant  applied  to   the Controller  under  s.  13  of the  East  Punjab  Urban  Rent Restriction  Act, 1949, for eviction of the respondents  and the Controller directed the company to deliver possession to the   appellant.    The   District   Court   confirmed   the Controller’s  order but the High Court set aside the  order, in a petition under Art. 227 of the Constitution, as  having been made without jurisdiction, holding that the company had no  interest  in  the tenancy after  August  31,  1954,  and nothing had passed to the respondent 1. Held,  that the High  Court was in error on both the  points and its order must be set aside. One  of  the  obligations of a tenant  under  s.  108(q)  of Transfer  of  Property  Act, on  the  determination  of  the tenancy,  is  to  put the landlord in  possession.   If  the tenant  fails  to do so before the expiry of the  period  of notice, his tenancy continues and cannot be terminated by an assignment in favour of another. W.   H.  King  v.  Republic of  India,  [1952]  S.C.R.  419, referred C.to. In  the instant case, the company had not admittedly  served the notice as required by law and, therefore, did not  cease to  be  the tenant and since the respondent I was  let  into possession  as  assignee  he  was  not  a  trespasser   and, consequently,  the  proceeding  before  the  Controller  was

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maintainable against both.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 356 of 1959. Appeal  by special leave from the judgment and  order  dated the November 18, 1957, of the Punjab 18 High Court at Chandigarh in Civil Miscellaneous  Application No. 712 of 1956. B. D. Sharma, for appellant. Hardev Singh and A. G. Ratnaparkhi, for respondent No. 1. Y. Kumar, for respondent No. 2. 1961.  April 17.  The Judgment of the Court was delivered by SHAH,  J.-The  Singer  Sewing  Machine  Company--hereinafter referred  to  as the company-was, since the year  1934,  the tenant for business purposes of a shop situate at Gurgaon in the  State  of Punjab and belonging to  Pandit  Kishan  Lal- hereinafter  called the appellant.  One Ganpat  Ram  Khosla- hereinafter  referred to as Khosla-was the Sales Manager  of the company. The Legislature of the State of East Punjab enacted Act  III of  1949 called the East Punjab Urban Rent Restriction  Act, 1949,  to restrict the increase of rent of certain  premises situated  within the limits of urban areas and the  eviction of tenants therefrom.  The Act granted protection to tenants of   premises  used  for  residential  and   non-residential purposes.   By  s. 2, el. (1), the expression  "tenant"  was defined, in so far as the definition is material, as meaning any person by whom or on whose account rent was payable  for a  building or rented land and included a tenant  continuing in  possession after the termination of the tenancy  in  his favour, but did not include a person placed in occupation of a  building  or rented land by its tenant, unless  with  the consent  of  the landlord...... By s. 13, the right  of  the landlord to evict a tenant even in execution of a decree was restricted  and the landlord could seek to evict his  tenant by  an  application to the Controller in  certain  specified circumstances set out in that section. On  August 30, 1954, the company addressed a letter  to  the appellant  intimating  that  it desired to  close  down  its office  in Gurgaon with effect from September 1, 1954.   The relevant part of the letter ran as follows: 19               "Now  the Company has closed its agency  busi-               ness  at  Gurgaon  and  Mr.  Khosla  will   be               carrying on Sewing Machine business in Gurgaon               in your shop in his personal capacity and  not               as a Manager of Singer Company.  In order that               there  may not be any  misunderstanding  about               the  payment  of  rent  in  future,  you   are               informed that from September, 1954 onwards Mr.               Khosla will be personally responsible for  the               payment of rent of your shop." The  appellant  informed  the  company  that  unless  vacant possession was delivered to him tenancy could not be validly determined,  and that the company will be  held  responsible till such delivery for liability to pay rent and that in the event  of possession being transferred to any other  person, legal  action  will be taken against the company.   But  the company  delivered  possession  of the shop  to  Khosla  and allowed him to occupy the shop in his personal capacity from September  1,  1954.  Thereafter, on October 31,  1954,  the appellant  applied under s. 13 of the Act to the  Controller

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for  an  order  against  Khosla and  the  company  on  three grounds,  (1) that the company did not require the  premises any longer while the appellant required the same for his own use,  (2) that the company had neglected to pay  rent  since September 1, 1954, and (3) that the company had assigned  or sublet the shop to Khosla without the written consent of the appellant.  Khosla and the company resisted the  application contending  that Khosla was the tenant of the appellant  and that  in any event, on August 28, 1954, the company  through its local Supervisor had delivered possession of the shop to the appellant and that the latter agreed to treat Khosla  as his  tenant  with  effect  from  September  1,  1954.    The Controller  rejected  the  pleas raised by  Khosla  and  the company and ordered that possession be delivered by the com- pany  to the appellant.  In appeal to the District Court  at Rohtak,  the order passed by the Controller  was  confirmed. In  a petition under Art. 227 of the Constitution  filed  by Khosla  in  the  High  Court  of  Judicature  for.Punjab  at Chandigarh,  the  order  passed by the  District  Court  was quashed.   The High Court was of the view that after  August 31, 1954, the 20 company had no interest left in the tenancy and the  tenancy being  from  month to month terminable at the  will  of  the appellant,  such tenancy could not be the subject-matter  of transfer  or of sub-letting.  The High Court therefore  held that  the  order passed was without  jurisdiction.   In  the course  of the judgment, the High Court observed  that  full rent  had  been  paid  even after  September  1,  1954,  and therefore  the ground of non-payment of rent "was  not  open to" the appellant.  It is accepted at the bar that in making this   observation,  the  High  Court  was  under   a   mis- apprehension.   The  rent accruing due was not paid  to  the appellant,  but was deposited in court.  Against  the  order passed  by  the High Court, this appeal  is  preferred  with special leave. The Controller and the District Court found that the  tenant of  the  shop  in dispute was not Khosla  but  the  company. These  two tribunals also found that possession of the  shop was handed over by the company to Khosla without the consent of the appellant.  These findings were binding upon the High Court. The  only question which fell to be determined by  the  High Court  was  whether by unilateral action on  its  part,  the company  could require the appellant to treat Khosla as  his tenant.  In our view, the High Court misconceived the nature of  the tenancy.  A tenancy except where it is at will,  may be terminated only on the expiry of the period of notice  of a  specified duration under the contract, custom or  statute governing  the  premises  in question.  A  tenant  does  not absolve  himself  from  the obligations of  his  tenancy  by intimating  that as from a particular date be will cease  to be  in occupation under the landlord and that some one  else whom  the  landlord  is not willing to accept  will  be  the tenant.   It  is  one of the obligations of  a  contract  of tenancy  that  the  tenant will,  on  determination  of  the tenancy,  put  the landlord in possession  of  the  property demised  (see  s. 108(q) of the Transfer of  Property  Act). Unless  possession is delivered to the landlord  before  the expiry  of  the period of the requisite notice,  the  tenant continues to hold the premises during the period as  tenant. Therefore,  by merely assigning the rights, the  tenancy  of the 21 company  did  not come to an end.  It was observed  by  this

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court in W. H. King v. Republic of India (1):               "There  is  a  clear  distinction  between  an               assignment of a tenancy on the one hand and  a               relinquishment or surrender on the other.   In               the  case  of  an  assignment,  the   assignor               continues to be liable to the landlord for the               performance  of  his  obligations  under   the               tenancy  and  this liability  is  contractual,               while the assignee becomes liable by reason of               privily   of  estate.   The  consent  of   the               landlord to an assignment is not necessary, in               the  absence of a contract or local  usage  to               the   contrary.    But   in   the   case    of               relinquishment  it  cannot  be  a   unilateral               transaction;  it can only be in favour of  the               lessor  by  mutual  agreement  between   them.               Relinquishment  of possession must be  to  the               lessor  or  one who holds  his  interest:  and               surrender  or  relinquishment  terminates  the               lessee’s rights and lets in the lessor." In  the  present  case, the company did  not  surrender  its rights to the appellant; it sought to transfer its rights to Khosla.  The company admittedly did not serve the notice  as required  by law, nor did the appellant agree to accept  the unilateral determination of the tenancy by the company.  The true  position  was  therefore  that  the  company  did  not immediately  on  the  service of the notice cease  to  be  a tenant;  and  Khosla,  because he was  let  into  possession became an assignee of the rights of the company as a tenant, and  he  could not be regarded as a  trespasser.   The  High Court was therefore in our view in error in holding that the proceedings  were  not  maintainable in  the  court  of  the Controller for possession.  Khosla being an assignee of  the tenancy rights of the company was as much liable to be  sued in  the court of the Controller as the company for an  order in ejectment. We therefore allow the appeal, set aside the order passed by the High Court and restore the order passed by the  District Court, Rohtak.  The appellant will be entitled to his  costs in this court as well as in the High Court from Khosla. Appeal allowed. (1)  [1952] S.C.R. 419. 22