A    

SMT. SHANTI BAI AND OTHERS  V.  

DINKAR BALKRISHNA VAIDYA AND ORS.  

MARCH 2, 1994  

[S. MOHAN AND M.K. MUKHERJEE,  

Tenancy laws:  

Bombay Rents, Hotel and Lodging House Rates Control.Act, 1947—Sec-  • tions 14 and 15—Held protection for available to assignees of sub-lessees--

Protection available only to lawful sub-lessees—Sub-lessee cannot create fur- ther sub-lease—Transfer of Property Act, 1882—Section 108(j).  

The suit property, an extent of 11,000 sq.ft. of land which was owned  by one T was mortgaged by him to D in 1947 and subsequently leased out  

D by T in favour of S in 1948. Under the lease deed the purpose was  mentioned as for residence and shops and the lessee was authorised to  sub- lease. There was also no prohibition against assignment. In 1949 the  lessee sub-leased the property by a registered deed to defendants 2 and 3,  who constructed fourteen shops on a portion of the land sub-let to them  

E and let them out to several persons, who in turn assigned their interest to  different persons. An extent of 4000 sq, ft. was sub-let by defendants 2 &  3 to S B, and seven shops were also sold by them to SB. On 6.12.1952  defendants 2 &3 assigned their rights, title and interest in respect of the  land in favour of Defendants 6, 7 & 8.  

In 1952 the mortgagee D filed a suit for enforcement of the mortgage  which was decreed. The mortgagee himself purchased the suit land in the  auction. The sale was confirmed and symbolical possession was delivered  to him.  

In the meantime the Nazir of the Court was appointed as guardian  • under the Court of Wards Act since the mortgagee was declared a lunatic.  

The Nazir filed a suit for recovery of a possession and arrears of rent (Civil  Suit No. 1142 of 1965) since his demand for rent from the original lessee  was not complied with. A ground of sub letting was also added. The suit  was decreed but the decree of the trial court was revised in appeal. The  

H it petition filed by the mortgagee-purchaser D under Article 227 of the  296

SMT. SHANTI v. D.B. VAIDYA   297  

Constitution of India was allowed by the Bombay High Court. The assig- nees from the original sub lessee appealed to this Court by special leave,  claiming the protection of the Bombay Rents, Hotel and Lodging House  Rates Control Act, 1947 as sub lessees.  

Dismissing the appeal, this Court  

HELD: 1. The appellants who are assignees from the sub- lessees  cannot claim protection as sub-lessees. The original lessee and sub-lessees  are not before the court. It is well settled that in such circumstances that  a sub-tenant cannot create further sub-tenancy. [301-F]  

Jai Singh Morarji & Ors. v. Mir. Sovani Pvt. Ltd. & Ors., [1973] 2 SCR  603, applied.  

2. There is no scope for application of section 15 of the Bombay Rent  Control Act. Though the parties are afforded liberty to contact out of the  section, it is only a lawful sub tenant who could claim protection. If in law  they are not sub-tenants of the original lessor, this sections totally in-  applicable. [301-G]  

3. Section 14 is also inapplicable. For the application of section 14,  there must be a lawful sub-tenacy. This is not so here. The occupants were  not lawfully inducted as sub-tenants either prior to 1959 or 1973 (the  relevant years for the applicability of sections 14 and IS). [301-H, 302-A]  

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2006 of  'A  

• From the Judgment and Order dated 15.7.80 of the Bombay High F   Court in S.C. Application No.242 of 1973.  

U.R. Lalit, V.N. Ganpule and B. Sangal for the Appellants.  

S.K. Dholakia, U.Bhagat and V.B. Joshi for the Respondent No. 10- G   

V.A. Bobde, V.D. Khanna, A.M. IChanwilkar, P.H. Parelch and J.S.  Wad for the Respondents.  

The Judgment of the Court was delivered by  

A  

1981.  

15.

298   SUPREME COURT REPORTS  [1994] 2 S.C.R.  

A  MOIHAN, J. The short facts leading to this civil appeal are as under:  

The suit property was originally owned by Trimbak Han Awate. He  executed a simple mortgage on 28.4.1947 to an extent of 11,000 square feet  which represent the entire property for a sum of Rs.20,000 in favour of  Dinkar S. Vaidya. On or about 7.7.1948, Awate executed a lease-deed in  favour of Shankar Godaji Gore. The purpose mentioned in the lease-deed  was residence and shops. Under the lease-deed, the lessee was authorised  to sub-lesase. The period of lease was 25 years. The annual rent was  Rs.1,500 payable monthly at the rate of Rs.125. There was no prohibition  from the assignment in the said lease.  

On 17.2.1949, Shankar Godaji Gore,the lessee excuted a registered  sub-lease in respect of entire land in favour of two persons Sulochanabai  Thakur and KrishnabaiSarde, original defendants No.2 & 3. The sub-lease  was for a period of 99 years and 9 months. The monthly rent was fixed at  Rs. 50. Defendants 2 & 3, the sub-lessees constructed fourteen shops on a  portion of the land sub let to them. These shops were let out for rent to  several persons. They in their turn assigned their interest to different  persons. On 7.11.1949, an area of 4,00 sq. ft. was sub-let by defendants nos.  2 & 3 in favour of Sardar Biwalkar on a rent of Rs. 135 p.m. for a period  of 67 years. On the same day of the lease, defendants 2 & 3 sold seven out  of fourteen shops,  to Biwalkar. On 6.12.1952, defendants 2 & 3 assigned all  their rights, title and interest in respect of the suit land in favour of  Bayajabai Ganpat Gore, Sundarabai Babasaheb Gore and Yashodabai  Balasaheb Gore, defendants 6, 7 and 8 respectively.  

In 1952, Dinkar Balkrishna Vaidya, the mortgagee filed a suit being  Special Civil Suit No. 89 of 1952 for enforcement of mortgage. In that suit,  mortgagor Awate and defendant No.1 to 4 were made party-defendants.  That suit was decreed. In execution of the final decree in the auction the  mortgagee Dinkar Balkrishna Vaidya himself came to purchase the suit  land measuring about 1.000 sq. ft. The sale was confirmed on 19.12.57.  

G  Symbolical possession was granted on 2.3.1960. It appears that during the  pendency of the suit, mortgagee was declared a lunatic. Therefore, Nazir  of the Court was appointed as guardian and the property was taken  possession of by the Nazir under the provisions of Court of Wards Act.  

The Nazir filed Regular Civil Suit No. 1142 of 1965 in the Small  H Causes Court, Poona for recovery of possession and arrears of rent since

SMT. SHANTI v. D.B. VAIDYA [MOHAN, J.]  299  

his demand for rent from Shankar Godaji Gore was not complied with. A  Shankar Godaji Gore assigned his right, title and interest in the shop  premises to defendant Nos. 19 and 20. Likewise, on 27.8.63 defendant No.  5 assigned his right, title and interest in the shop in favour of defendant  No. 21. Therefore, another ground of sub-letting was also added. That suit  was decreed on 27.11.68. Aggrieved by the said jugdment, Civil Appeal  Nos. 279, 354 and 265 of 1969 were preferred against the same. Civil  Appeal Nos. 279 and 354 of 1969 came to be allowed while Civil Appeal  No. 265 of 1969 was dismissed for non-prosecution. Thereupon, the first  respondent moved the High Court under Article 227 of the Constitution  of India. That was numbered as Special Civil Application No. 242 of 1973.  By the impugned order dated 15.7.1980, that came to be allowed. Hence, C  the present civil appeal.  

The learned counsel for the appellants Shri U. R. Lalit after taking  us through the relevant provisions of the Bombay Rents, Hotel and Lodg- ing House Rates Control Act, 1947 (hereinafter referred to as 'the Act')  submitts that the lease-deed in favour of Shankar Godai Gore specially  enabled him to sub-let. Under the lease-deed dated 7.7.1948, Awate the  original owner permitted the lessee Shankar Godaji Gore to construct  therein and give the said building or any portion thereof to any person on  lease rent and he could take the income derived therefrom. Therefore,  there was clear enablement to sub-lease.  

D •  

Under the Transfer of Property Act, there is no bar for a lessee to  sub-lease. In such a case that right or interest could be assigned in favour  of third party. That was what was done by the lease-deed dated 17.2.1949.  The sub-lessees constructed the building and let out a few and assigned  their rights in favour of other defendants. It the sub-lessees continued in  possession prior to 21.5.1959, they would been entitled to the statutory  protection because prior to 1959, if there was sub-letting, the landlord  could not proceed to evict. Section 15 of the Act barring sub-lesseescame  into force only by amendment Act 49 of 1959, that too, subject to the  contract to the contrary. Here is a case of a contrary contract. Under these  circumstance the ruling reported in Sardar Total Singh v. Mls Gold Field  Leather Works, Bombay, 11985] 2 SCR 563 would squarely apply. No  eviction was possible under Section 13(1)(e) of the Act because it must be  an unlawful sub-letting. Therefore, there is total protection both under  1959 Act and 1973 Act.

300   SUPREME COURT REPORTS  [1994i 2 S.C.R.  A  There is no warrant to hold that first defendant has unlawfully  

sub-let. In any event, if defendant Nos. 2 and 3 are sub-tenants in accord-  ance with Section 14 of the Act, unless special sub- tenancy is determined,  no eviction is.  possible.  

Mr. S.K. Dholalcia, learned counsel for the respondent Nos. 24, 26  and 27 supporting this argument submits that there is privity of contract  between the original lessor and the occupant. The predecessor of the  original lessor had authorised the defendant No. 1 to build the superstruc- ture. Defendant No. 1 had absolute right to transfer his interest and having  transferred his right of construction to defendant Nos. 2 and 3, the  

C  construction was made by defendant Nos. 2 and 3 lawfully and binding on  the original lessee as he had not made any cotract to the contrary. The  occupants were inducted lawfully as tenants of the superstructure before  1959 or 1973 and therefore are eligible to the protection available under  Sections 14 and 15 of the Act. Even on equity, they are entitled to a  decision in their favour. It has been noted by the High Court that some of  the occupants are tailors, laundrymen etc. and their livelihood is dependant  on these premises. The eviction will entail severe hardship.  

Mr. V.A. Bobde, learned counsel for the respondents submits, no  doubt under the original lease date 7.7.1948, a permission had been given E  to Gore to construct but he never constructed. He created a sub-lease in  favour of defendant Nos. 2 and 3. It was the sub-lessees who had put up  this building. In relation to the demised property there was no privity of  contract between the original lessor and the contesting defendents. Defen- dants 2 and 3 constructed 14 shops and assigned their right in favour of  defendant Nos. 6, 7 and 8. How can these occupants claim the right as F  sub-tenancy ? Jai Singh Morali and Ors. v. M/s Sovani At. Ltd and Ors.,  '1973] 2 SCR 603 clearly lays down that no further sub-lease is possible.  That would squarely apply to the facts of the present case. The reliance  placed on Tota Singh's case (supra) is not correct. In any event, Section 14  does not take within it assignments and transfers.  

Tha short question that arises for our consideration in this case is,  whether the occupants, the present appellants who are the assignees from  defendant Nos. 2 and 3 can claim the protection of the Act as sub-lessees.  

The original lease-deed date 7.7.1948, between Awate and Gore H states in clause 2 sub-clause (1) and (3) as follows:

SMT. SHANTI v. D.B. VAIDYA [MOHAN, II    

301  

"2(1)1 have taken the said land on rent for the period of 25 years A  from the date 7.7.1948 and have taken the same in my possession  this day.  

MOM  X1000:   MODCX  MOM(  

2(3) The land is vacant and I shall construct buildings therein as  per my wishes and I shall give the said building on any portion  thereof to any person on lease rent and I shall take the income  derived therefrom."  

Admittedly Gore did not put up any construction. However, reliance  is placed on Clause 2 sub-clause (3) extracted above to urge that he had a  right of sub-lease because he could build and let it out in favour of any one  he liked. In our considered opinion the permission to construct means  nothing more than an emphasis of the manner of enjoyment of the proper- ty. Even then as stated above, Gore never constructed. He leased-out the D -  property in favour of defendant Nos. 2 and 3 by lease-deed dated 17.2.1949.  Under clause 2 sub-clause (d), it is stated as follows:  

"The said land is vacant. We shall construct structures thereon as  per our wishes and we shall give the said building or any portion  thereof on sub-lease to any person and we shall take the income  derived therefrom. We shall obtain the permission required for the  said construction. In case your signature or consent is required in  that matter, you are to give the same."  

These sub-lessees (defendant Nos. 2 and 3) assigned their rights in  favour of defendant Nos. 6, 7 and 8 and others who are the appellants.  How can they claim protection as sub-lessees? The important point to note  here is that the original lessee Gore, defendant Nos. 2 and 3 sub-lessees  are no longer before us. They have not filed the appeal. In these cir7   cumstances, the principle applicable to this case is as stated in Jai Singh  Morarji & Ors. case (supra) that a sub-tenant cannot create further sub- tenancy. Therefore, we are totally unable to see any scope for application  of Section 15 of the Act. The parties are afforded liberty to contract out  of the Section. Even then it is only a sub-tenant who could claim protection.  If in law, they are not sub-tenants of the original lessor, this Section is  totally inapplicable.

302   SUPREME COURT REPORTS  11994] 2 S.C.R.  

A  Again for the application of Section 14, there must be a lawful  sub-tenancy. That is not so here. The occuants were not lawfully inducted  into possession as sub-tenants either prior to 1959 or 1973. Therefore, we  are unable to accept the contention urged by Mr. U.R. Lalit and Mr.S.K.  Dholakia, learned counsels. Hence, that Section is also inapplicable  

Weighing the equitable considerations, the Civil Appeal was ad- journed or effecting a compromise. But the parties have not done so.  Therefore, we are unable to grant any relief on that score. The Civil Appeal  will stand dismissed. However, there shall be no order as to costs.  

R.R.   Appeal dismissed.