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PETITIONER: TIRATH RAM GUPTA

       Vs.

RESPONDENT: GURBACHAN SINGH & ANR,

DATE OF JUDGMENT06/02/1987

BENCH: NATRAJAN, S. (J) BENCH: NATRAJAN, S. (J) MUKHARJI, SABYASACHI (J)

CITATION:  1987 AIR  770            1987 SCR  (2) 190  1987 SCC  (1) 712        JT 1987 (1)   365  1987 SCALE  (1)255

ACT:     East  Punjab  Urban  Rent  Restriction  Act,    1949--S. 13(2)-Eviction of sub-tenant--Not permissible if sub-tenancy created before Act came into force.     Transfer  of  Property  Act--Ss. 108(j),  III(e)  &  115 Lessee has right to transfer by sub lease even a part of his interest in the property-Whether surrender of part  interest under a lease permissible.

HEADNOTE:     The appellant-landlord first let out a shop-cum-flat  to the  second respondent (tenant) and subsequently leased  out the  adjoining two flats to him. The second respondent  sub- let the two flats to the first respondent (sub-tenant) prior to  the  coming  into force of the East  Punjab  Urban  Rent Restriction  Act,  1949 in the area where  the  property  is situate.     The  landlord filed a suit seeking eviction of both  the respondents, inter alia, on the ground of unauthorised  sub- letting,  who contested the petition. However, there  was  a compromise  between the appellant and the second  respondent the appellant giving up his claim for eviction of the second respondent from the shop-cum-flat in his occupation and  the second  respondent  conceding that he has  sub-let  the  two flats  to  the first respondent without the consent  of  the appellant-landlord.  The Rent Controller passed an order  of eviction  of  the first respondent from the two  flats  sub- leased  to him. An appeal to the Appellate Authority  having failed, the first respondent filed a revision under s. 15(5) of  the Act. The High Court allowed the revision, set  aside the order of eviction and held that no order of eviction can be passed under s. 13(2) as the sub-tenancy had been created before the Act came into force in the area where the proper- ty is situate.     In  the appeal to this Court on behalf of the  appellant it  was contended; (i) that when the second  respondent  had admitted  the factum of the unauthorised sub-lease and  when the Rent Controller and the Appellate Authority had acted on his  admission, the High Court was in error  in  interfering with the order of eviction concurrently passed by 191

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the  Courts  below; (ii) that even without reference  to  s. 13(2)  the  sublease was not lawful because the  lease  deed entered  into between the parties contained a clause  inter- dicting  any  sub-lease without the written consent  of  the landlord; (iii) that the sub-lease was not lawful even under s. 108(J) of the Transfer of Property Act because the  lease deed contained a prohibition; (iv) that even if it is  taken that  there was no lease deed prohibiting the creation of  a sub-lease, the sub-tenancy had become unlawful from the date when  the second respondent was served a notice of  termina- tion of tenancy by the appellant; (v) that a subtenant  does not  have rights independent of the tenant and as such  when the  second  respondent suffered an order of  eviction,  the first  respondent was equally bound by the order; (vi)  that when  there was a surrender of tenancy rights restricted  to the two flats in question, the first respondent is bound  by the  surrender and cannot claim the sub-tenancy  rights  any further;  (vii)  and that the Act gives protection  only  to tenants and not to sub-tenants against unreasonable eviction and hence the first respondent cannot claim protection under the Act from eviction. Dismissing the Appeal,     HELD: 1.1 An order of eviction cannot be passed under s. 13(2) of the East Punjab Urban Rent Restriction Act, 1949 if the  sub-letting was prior to the Act coming into  force  in the area concerned. [194F] Surjit Singh v. Rattan Lal, AIR 1980P & H 319, approved. Gurcharan Singh v.V.K. Kaushal, [1981] 1 SCR 490, relied upon.     L2 In the instant case, the sub-lease had been  effected before the notice of termination of tenancy was issued.  The notice  of termination of tenancy subsequently issued  would not  make  the  sub-lease created earlier  unlawful  in  any manner. [195C]     2. Against a common decree of ejectment passed against a tenant  and the sub-tenant, the sub-tenant alone can  appeal in  his own right against the decree and have the  same  set aside even though the tenant decides not to file an  appeal. [195F]     Devaraja  Bhatt v.V.S. Rala & Ors., AIR 1953 Madras  356 (Vol. 40, C.N. 122), Express Estates Ltd. v. Modern Furnish- ing  House,  AIR 1953 Madras 414 and G.L. Kapoor  v.  Ramesh Chander Nijhawan & Ors., All-India Rent Control Journal 1972 Page 887, referred to. 192 Karam Singh v. Pratap Chand, AIR 1964 S.C. 1305, followed.     3.1  A  lease  is a transfer of a  right  to  enjoy  the property.  It creates an interest in the property by  virtue of  the contract of lease which may be either oral or  writ- ten. The interest created in the property can be put an  end to by terminating the contract. The contract however, cannot be terminated in part. [195H;196A]     3.2  In this case though the two items of property  were given  on lease at different times, the parties had  treated the  lease  as  a composite one and that was  why  a  common notice  had been issued for terminating the tenancy of  both the  items and furthermore a single petition had been  filed under  s. 13(2) to seek an order of eviction in  respect  of both the items of the lease property. [196A-B]     4.  In  this case the lease deed has not been  filed  in Court and marked as an Exhibit in evidence. The  explanation given by the appellant that the lease deed was shown to  the Rent  Controller and the Appellate Authority but it was  not filed  as an Exhibit because proceedings under the  Act  are not conducted in meticulous observance of the provisions  of

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Civil Procedure Code cannot be accepted and the Court cannot act  on the basis that a valid lease deed had been  executed and it contained a contract to the contrary in so far as the tenants’ right to sub-lease is concerned. [194G;195A-B]     5. The lessee has a right to transfer by sub-lease  even a  part  of his interest in the property as provided  in  s. 108(J)  of the Transfer of Property Act. A  transferee  from the  lessee has a right to claim the benefit of contract  to the  lessee’s interest, vis-a-vis the landlord. Thus a  sub- lease  who has obtained a part of the interest of  the  head tenant will be entitled to claim the benefit of the contract vis-a-vis  the  lessor, as the lessee cannot  surrender  the lease  in part. Section 111(e) contemplates a  surrender  of the  entire interest under the lease and not a part  of  the interest alone. Moreover, a lease can be determined only  by restoring possession in respect of the entire property which was taken on lease (see.) 108(m). [196B-D]     6. Section 115 of the Transfer of Property Act  provides that  the surrender of a lease does not prejudice an  under- lease of the property or in part thereof previously  granted by the lessee. The lessee, having parted with a part of  the interest in the property in favour of the sub-lessee, cannot surrender that part of the property which is in the  posses- sion  of the sub-lessee for he cannot restore possession  of the same 193 to the lessor apart from the fact that he can terminate  the contract  of lease only as a whole and not in respect  of  a part of it. [196D-F]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3182  Of 1984.     From  the  Judgment and Order dated 17.1.  1984  of  the Punjab  and Haryana High Court in Civil Revision No. 907  of 1977.     Anil  Dev Singh, R.C. Misra and Dr. Meera  Aggarwal  for the Appellant. Prem Malhotra for the Respondents. The Judgment of the Court was delivered by,     NATARAJAN,  J.  This  appeaI by Special Leave  is  by  a landlord  and is directed against the judgment of  the  High Court  of  Punjab and Haryana in Civil Revision No.  907  of 1977. In an eviction suit filed under Section 13 of the East Punjab  Urban  Rent  Restriction Act, 1949  (for  short  the ’Act’)  against the tenant and the sub-tenant (Respondent  2 and 1 respectively) in respect of two premises, there was  a compromise between the landlord and the tenant and in  terms thereof,  the  Rent Controller decreed the eviction  of  the first  respondent  from the premises sub-leased to  him.  An Appeal  to  the appellate Authority proved of no  avail  and hence  the first respondent filed Civil Revision No. 907  of 1977  under Section 15(5) of the Act to the High Court.  The High  Court  allowed the revision holding that no  order  of eviction can be passed under Section 13(2) of the Act as the sub-tenancy had been created before the Act came into  force in  the Union Territory of Chandigarh where the property  is situate.  The High Court’s order is challenged in  this  ap- peal.     The  brief facts requiting notice may now be  seen.  The appellant/  landlord  let  out  in  the  first  instance   a shop-cum-flat  No.  7 to the second respondent in  1963  and subsequently  in 1967 he leased out the adjoining two  flats

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also to him. The second respondent sub-let the two flats  to the  first  respondent. It is common ground  that  the  sub- letting was long prior to 4.11. 1972 when the Act came  into force in the Union Territory of Chandigarh.     On  March 8, 1973 the appellant filed a suit and  sought eviction of both the respondents on various grounds but  all of them except the 194 ground of unauthorised sub-letting were given up. The  peti- tion was contested by both the respondents. However, at  the stage  of arguments the appellant and the second  respondent entered  into a compromise between themselves and  in  terms thereof the appellant gave up his claim for eviction of  the second  respondent from the shop-cumflat in his  occupation. Thereafter  the second respondent conceded that he had  sub- let  the two flats to the first respondent without the  con- sent  of the appellant and hence an order of  eviction  con- fined  to the two flats sub-leased to the  first  respondent may  follow.  An appeal to the  Appellate  Authority  having failed  the  first respondent filed a revision to  the  High Court under Section 15(5) of the Act and succeeded in having the order of eviction set aside.     Mr.  Anil Dev Singh, learned counsel for  the  appellant sought  to  assail the order of the High  Court  on  various grounds. The first ground was that when the second  respond- ent  had admitted the factum of the  unauthorised  sub-lease and when the Rent Controller and the Appellate Authority had acted  on  his  admission, the High Court was  in  error  in interfering  with the order of eviction concurrently  passed by  the courts below. This argument is devoid of  merit  be- cause the admitted position is that the Act came into  force in  the area concerned only on 4.11. 1972 whereas  the  sub- lease had been effected much earlier. In view of that  posi- tion  the  High Court was entitled to set  right  the  error committed by the Rent Controller and the Appellate Authority in  ordering eviction under Section 13(2) of the Act.  As  a matter  of  fact the High Court was bound to set  right  the error in view of its own decision in Surjit Singh v.  Rattan Lal, AIR 1980 P & H 319 and this Court’s decision in Gurcha- ran  Singh v.V.K. Kaushal, [1981] 1 SCR 490. In  both  these cases it has been laid down that an order of eviction cannot be passed under Section 13(2) of the Act if the  sub-letting was  prior  to the Act coming into force in  the  area  con- cerned.     The  second ground urged was an alternative plea and  it was  argued that even without reference to Section 13(2)  of the Act the sub-lease was not lawful because the lease  deed entered  into between the parties contained a clause  inter- dicting  any  sub-lease without the written consent  of  the landlord.  In  other words, the argument was that  the  sub- lease was not lawful even under Section 108(J) of the Trans- fer  of  Property  Act because the lease  deed  contained  a prohibition.  We cannot countenance this argument  for  more than  one reason. In the first place the lease deed has  not been  filed in court and marked as an Exhibit  in  evidence. Learned counsel stated that the lease deed was shown to  the Rent Controller and the Appellate Authority but it was 195 not  filed as an Exhibit because proceedings under  the  Act are not conducted in meticulous observance of the provisions of the Civil Procedure Code. We can hardly accept the expla- nation  given and act on the basis that a valid  lease  deed had  been executed and it contained a contract to  the  con- trary  in so far as the tenant’s right to sub-lease is  con- cerned.

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   It was then argued by Mr. Anil Singh Dev that even if it is taken that there was no lease deed prohibiting the  crea- tion  of  a sub-lease, the sub-tenancy had  become  unlawful from 24.1.72 when the second respondent was served a  notice of  termination  of tenancy issued by  the  appellant.  This argument is also not tenable because the sub-lease had  been effected  before  the notice of termination of  tenancy  was issued.  Hence the notice of termination. of tenancy  subse- quently issued would not make the sub-lease created  earlier unlawful in any manner.     Another argument advanced was that a sub-tenant does not have  rights independent of the tenant and as such when  the second  respondent  has suffered an order of  eviction,  the first  respondent  was  equally bound by  the  order.  Three decisions were cited to fortify this contention viz. Devara- ja  Bhatt v.V.S. Raja & Ors., AIR 1953 Madras 356 (Vol.  40, C.N. 122); Express Estates Ltd. v. Modern Furnishing  House, AIR 1953 Madras 414 and G.L. Kapoor v. Ramesh Chander Nijha- wan & Ors., All-India Rent Control Journal 1972 Page 887.     These authorities cannot advance the case of the  appel- lant in any manner. The sub-tenancies which were respective- ly imugned in the cited cases had come into existence  after the Rent Control Act in the respective States had come  into force  and hence they are distinguishable on facts.  As  re- gards the right of a sub-tenant to file an appeal  independ- ently  of the tenant this Court has ruled in Karam Singh  v. Pratap  Chand,  AIR  1964 S.C. 1305 that  against  a  common decree  of  ejectment passed against a tenant and  the  sub- tenant,  the  sub-tenant alone can appeal in his  own  right against  the decree and have the same set aside even  though the tenant decides not to file an appeal.     There  was also a contention that when there was a  sur- render  of  tenancy rights restricted to the  two  flats  in question, the first respondent is bound by the surrender and cannot claim sub-tenancy rights any further. The  contention is unsustainable for a host of reasons. A lease is a  trans- fer of a right to enjoy the property. It creates an interest in the property by virtue of the contract of lease which may be  either  oral  or written. The interest  created  in  the property can be put an end 196 to  by  terminating  the contract.  The  contract,  however, cannot  be terminated in part. In this case though  the  two items  of property were given on lease at  different  times, the  parties  had treated the lease as a composite  one  and that was why a common notice had been issued for terminating the  tenancy  of  both the items and  furthermore  a  single petition had been filed under Section 13(2) to seek an order of  eviction,  in  respect of both the items  of  the  lease property.     The  lessee has a right to transfer by sub-lease even  a part of his interest in the property as provided in  Section 108(j)  of the Transfer of Property Act. A  transferee  from the  lessee has a right to claim the benefit of contract  to the lessee’s interest, vis-a-vis the landlord, (vide Section 108  second  paragraph  of clause (c)  of  the  Transfer  of Property  Act) Thus a sub-lessee who has obtained a part  of the  interest of the head tenant will be entitled  to  claim the  benefit  of the contract vis-a-vis the lessor,  as  the lessee  (head  tenant) cannot surrender the lease  in  part. Section 111(e) contemplates a surrender of the entire inter- est  under the lease and not a part of the  interest  alone. Moreover,  a lease can be determined only by restoring  pos- session in respect of the entire property which was taken on lease  (see Section 108(m). Section 115 of the  Transfer  of

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Property Act provides that the surrender of a lease does not prejudice an under-lease of the property or in part  thereof previously granted by the lessee. The lessee, having  parted with a part of the interest in the property in favour of the sub-lessee, cannot surrender that part of the property which is in the possession of the sub-lessee for he cannot restore possession of the same to the lessor apart from the fact the he  can terminate the contract of lease only as a whole  and not  in respect of a part of it. Having regard to all  these factors, even without going into the question of the partial surrender  of lease being vitiated by collusion, it  is  not open  to  the appellant in law to contend  that  the  second respondent  is  entitled to and had  validly  surrendered  a portion of the lease-hold property and the first respondent, being  the sub-tenant is bound by the surrender  and  should deliver possession.     The  last argument of the appellant’s counsel  was  that the  Act  gives protection only to tenants and not  to  sub- tenants  against unreasonable eviction and hence  the  first respondent cannot claim protection under the Act from  evic- tion. Reference was made in this connection to Section 2(ii) of  the Act which excludes a sub-tenant from the  definition of  tenant. The argument stems from an erroneous  assumption that  the first respondent is seeking protection  under  the Act from being evicted. The true position is that the  first respondent 197 has only taken the stand that the appellant is not  entitled to  evict him under section 13(2) of the Act since the  sub- lease  in  his favour had been created before the  Act  came into force.     We are, therefore, of the view that none of the  conten- tions of the appellant has merit or substance. Consequently, the appeal fails and is dismissed. The parties will,  howev- er, pay and bear their respective costs. A.P.J.                                         Appeal   dis- missed. 198