http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 20  

PETITIONER: ANAND NIVAS (PRIVATE) LTD.

       Vs.

RESPONDENT: ANANDJI KALYANJI PEDHI & ORS.

DATE OF JUDGMENT: 05/09/1963

BENCH: SARKAR, A.K. BENCH: SARKAR, A.K. HIDAYATULLAH, M. SHAH, J.C.

CITATION:  1965 AIR  414            1964 SCR  (4) 892  CITATOR INFO :  E          1967 SC1853  (7)  E          1968 SC 471  (11)  RF         1969 SC1187  (8)  F          1972 SC2526  (9)  RF         1973 SC 772  (19)  D          1976 SC2229  (9,10)  D          1977 SC 739  (7)  E          1980 SC 226  (6,16)  RF         1982 SC1043  (19)  RF         1985 SC 507  (16)  RF         1985 SC 796  (18,19)  D          1987 SC 117  (45,50)

ACT: Houses  and Rents-Statutory Tenant and  Contractual  tenant- Difference-Right  of  sub-letting-Bombay  Rents,  Hotel  and Lodging House Rates Control (Amendment) Ordinance, 1959-Bom- bay Rents, Hotel and Lodging House Rates Control Act,  1947, ss. 12, 14 and 15.

HEADNOTE: The  respondents  granted to one Maneklat for five  years  a lease of the ground and the first floor of a building  named Anand Bhawan in the town of Ahmedabad.  After the expiration of  the  period of the lease, a suit was instituted  by  the respondents  against Maneklal for a decree in ejectment  and the  realisation of arrears of rent.  The suit was  decreed. However,  Maneklal  sublet  a part of the  premises  in  his occupation  to  the appellant after the institution  of  the suit  against him but before the promulgation of the  Bombay Rents,  Hotel  and Lodging House Rates  Control  (Amendment) Ordinance,   1959.    In  execution  of  the   decree,   the respondents obtained possession of the first floor but  were obstructed  as to the rest by the appellant and  two  others who  claimed to be sub-lessees from Maneklal and thereby  to have  acquired  rights of tenancy of the ground  floor  upon determination of the tenancy of Maneklal. The appellant filed a suit for a declaration that it was not bound   to  deliver  possession  of  the  premises  in   its occupation  in  execution  of  the  decree  passed   against Maneklal  and for an injunction restraining the  respondents

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 20  

form enforcing the decree.  The trial Court refused to grant the  interim injunction against the respondents.  The  lower appellate   court   also  refused  to  issue   the   interim injunction.   The  High Court dismissed the  appeal  of  the appellant on the ground that a statutory tenant re- 893 maining in possession after determination of its contractual tenancy  was in law not competent to sublet the premises  in whole  or in part and a person claiming to be  a  sub-tenant from  a  statutory tenant could not  effectively  plead  the protection  of s. 14 of the Bombay Rents, Hotel and  Lodging House Rates Control Act, 1947 as amended by the Ordinance of 1959.  The appellant came to this Court by Special Leave. Held (per Hidayatullah and Shah, JJ.  Sarkar, J. dissenting) (i) Maneklal was a statutory tenant and as such had no right to  sublet the premises and the appellant acquired no  right of a tenant on the determination of the right of Maneklal by virtue of s. 14 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 as amended in 1959. (ii)The  appellant was bound by the decree obtained by  the respondents against Maneklal and it could not take advantage of the Transfer of Property Act and the Indian  Registration (Bombay Amendment) Act, 1939. By  s. 15(1), all transfers and assignments of interests  in the  premises  and sub-letting of premises by  tenants  are, subject  to  any contract to the  contrary,  made  unlawful. This  provision applies only to contractual tenants and  not to  statutory tenants who have no interest in the  property. A  statutory  tenant  cannot  sublet  the  premises  because subletting  involves  a  transfer  of  the  right  to  enjoy property for a certain period in consideration of price paid or  promised  and a statutory tenant has merely  a  personal right to resist eviction.  Section 15(2) is in the nature of an  exception  to  s.  15(1).   It  applies  to  contractual tenancies.   It protects subtenants of  contractual  tenants and  removes the bar against subletting imposed by s.  15(1) as  well  as  by contract, provided  the  transferee  is  in possession  of  the  premises at  the  commencement  of  the Ordinance. A statutory tenant is a person who remains in occupation  of the  premises let to him after the determination of  or  the expiration  of the period of the tenancy.  He has no  estate or  interest  in the premises occupied by  him.   He  merely enjoys the protection of the law in that he cannot be turned out  so  long  as he pays the standard  rent  and  permitted increases, if any, and performs the other conditions of  the tenancy.   His  right  to remain  in  possession  after  the determination of the contractual tenancy is personal.  It is not capable of being transferred or assigned and devolves on his  death only in the manner provided in the Act.   On  the other  hand, the right of a contractual tenant is an  estate or interest in the premises and in the absence of a contract to  the  contrary, is transferable and the premises  may  be sub-let by him. Roe v. Russel, [1928] 2 K. B. 117, Lewis v. Reeves, [1951] 2 All E. R. 855, Krishna Prasad Bose v. Sm.  Sarajubala Dassi, A.I.R. 1961 cal. 505 and Solomon v. Orwell, [1954] 1 All  E. R. 874, referred to. 894 Per  Sarkar, J. (1) The word ’tenant’ in s. 13(1)(c) of  the Bombay,  Rents, Hotel and Lodging House Rates  Conrtol  Act, 1947   includes  not  only  contractual  tenants  but   also statutory  tenants and a statutory tenant has the  power  to sublet.   There is no justification for the view  that  sub- letting  by  a  statutory tenant of a part  of  the  demised

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 20  

premises  results  in  a  parting  with  possession  of  the premises or that such parting deprives him of the protection of the Act.  Section 13(1)(e) of the Bombay Act implies that a  statutory  tenant  can  sublet a  part  of  the  premises lawfully.  Section 15 of the Bombay Act deals not only  with contractual  tenants but also with statutory  tenants.   The result  is that the sub-letting by Maneklal of the  premises must be held to have been lawful. (ii)The  appellant was not bound by the decree obtained  by the  respondent  against Maneklal.  It is true that  a  sub- tenant under the general law of landlord and tenant is bound by  the decree obtained by the landlord against  the  tenant for possession, though he was not made a party to the  suit, but  where a statue like the Bombay Act gives  sub-tenant  a right to continue in possession even after determination  of the  tenancy of the statutory tenant, the sub-tenant is  not bound by the decree and his tenancy does not come to an  end with the tenancy of the superior tenant.  A decree  obtained by  a landlord against his tenant does not give him a  right to  evict a subtenant like the appellant who is entitled  to the benefits of s. 14 of the Act. Section  52  of  the  Transfer of  Property  Act  cannot  be resorted to by the respondents in the present case to  evict the appellant. Baker v. Turner, [1950] A. C. 401, Keeves v. Dean, [1924]  1 K.  B. 685, Roe v. Russel, [1928] 2 K. B. 117,  Campbell  v. Lill,  (1926)  135 L. T. 26, Vevindramuthu  Pillai  v.  Maya Nandan, (1920) 1.   L.R.43  Mad.  696 and Yusuf  v.  joytish Chandra Banerji, (1932) 1.    L. R. Cal. 739, referred to.

JUDGMENT: CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 168 of 1963. Appeal  by special Leave from the judgment and decree  dated May 1, 1962, of the Gujarat High Court in Appeal from  Order No. 46 of 1962. I.M. Nanavati, 1. B. Dadachanji 0. C. Mathur and Ravinder Narain, for the appellant. S.T. Desai, M. M. Shah and I. N. Shroff, for the res- pondents. September 5, 1963.  A. K. Sarkar, J. delivered a  dissenting opinion.  The judgment of M. Hidayatullah and J.  C.   Shah, jj. was delivered by Shah, J. SARKAR  J.-In  my opinion this appeal  should  succeed.  The respondent landlords demised certain premises to 895 Maneklal  Mafatlal  for a term of five years from  March  5, 1950.   The tenant continued in possession after the  expiry of the term under the protection from eviction given by  the Bombay  Rents  and Lodging House Rates (Control)  Act,  1947 which came into force on February 2, 1948. On  April   27, 1956, the landlords filed a suit against     him         for eviction for non-payment of rent and obtaineda   decree on  June 22, 1960.  While this suit was pending  the  tenant sub-let a part of the demised premises to the appellant.  In execution  of the decree the landlords got possession  of  a small  part  of  the  premises  which  was  in  the   actual occupation  of the tenant.  As to the rest, the  sub-tenants in  possession  including the appellant  resisted  eviction. The  appellant  in fact filed a suit against  the  landlords claiming  that  under  s.  14 of the Act  it  had  upon  the determination of the interest of the tenant in the  premises by the decree against him become their direct tenant of  the portion sub-let to it and asking for a permanent  injunction

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 20  

restraining  the landlords from evicting it.  In  that  suit the appellant made an application for an interim  injunction but  the application was rejected by the trial Court and  an appeal  therefrom,  by the appellate Court.   The  appellant then  moved  the High Court of Gujarat in revision  and  the High Court confirmed the orders of the Courts below  holding that after the expiry of the term the tenant had no power of sub-letting  and  the appellant, therefore, was not  a  sub- tenant  and  it  was not entitled to  any  injunction.   The correctness of this judgment of the High Court is challenged in this appeal. The protection under which the tenant in this case stayed on after the expiry of his lease was given by sub-s. (1) of  s. 12  of the Act which provides that a landlord shall  not  be entitled  to the recovery of possession of any  premises  so long  as the tenant pays rent and observes and performs  the conditions  of the tenancy as provided in the section.   The tenant  contemplated  in sub-s. (1) of s. 12 -is  plainly  a tenant whose had come to an end.  The Act at various  places uses  the word "tenant" as including such a person and  also defines the word "tenant" in s. 5(11) (b) as including  "any person  remaining, after the determination of the lease,  in possession,  with or without the assent of the landlord,  of the premises leased to such person . . . . "’ 896 Such a person has been called a statutory tenant and I shall also use that description for economy of expression. The  landlords contend that though by virtue of s. 12(1)  of the Act the tenant could not be evicted after the expiry  of his lease, yet he had then lost all interest in the  demised premises and could not, therefore, sub-let the same.  How it may be that under the general law of landlord and tenant,  a tenant  has  no right to sub-let -after the  expiry  of  the lease but we have here a statute which has altered that  law in  many  ways.   The  power of  tenant  to  sub-let  cannot therefore  be  decided by reference to the  general  law  of landlord and tenant but the Act must be examined to see  how it  affects  that power.  In my opinion such a  power  in  a statutory   tenant  is  contemplated  by  the  Act  and   in particular by cl. (e) of sub-s. (1) of s. 13.  That  section lays   down   the   circumstances  in   which   a   landlord notwithstanding  the  bar in s. 12(1), can get a  decree  in ejectment  against the tenant and the part of it to which  I wish to refer is in these terms : S.   13. (1) "Notwithstanding anything contained in this Act               but subject to the provisions of section 15, a landlord  shall  be entitled to recover  possession  of  any premises if the Court is satisfied-                ............................................                ............................................ (e)that the tenant has, since the coming into operation of this  Act,  unlawfully  sub-let the whole  or  part  of  the premises or assigned or transferred in any other manner  his interest therein;" This  clause plainly contemplates a tenant  sub-letting  and this is not in dispute.  But it is said that the tenant here referred  to is one whose lease has not expired-whom I  will for  short  call a contractual tenant-as to whose  power  to sub-let  there is no question.  The reason given in  support of  this view is that a statutory tenant having no  interest in  the  premises cannot certainly assign  or  transfer  his interest  in the demised premises and, therefore,  the  word "tenant"  in  cl.  (e)  of s.  13(1)  must  in  relation  to assignment  and  transfer  by a tenant be  understood  as  a contractual  tenant.  That being so, and as it  is  unlikely

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 20  

that the word had been used in different meanings in the 897 same  clause,  it  must mean only a  contractual  tenant  in relation to sub-letting also. I  am unable to accept this contention.  The  word  "tenant" has been given various meanings by the definition clause  in the  Act.   All those meanings must be given  to  that  word wherever  it occurs in the Act unless the context  otherwise requires.   If a statutory tenant cannot transfer or  assign his interest-as to which I express no opinion-cl. (e) of  s. 13(1)  cannot, of course, be contemplating him as doing  so. That, however, would not show that definition of "tenant" as a statutory tenant would not be available for deciding  what kind  of tenants were contemplated by cl. (e) when  it  said that  a  tenant unlawfully sub-letting would  be  liable  to eviction.   In  all  other ,clauses in  s.  13(1)  the  word "tenant" clearly includes both a statutory and a contractual tenant  and,  therefore, the section contemplates  the  word "tenant" being used in ,more than one sense.  The fact  that the  clause talks of ,a contractual tenant  alone  assigning does  not provide a context preventing-- the  word  "tenant" when it talks of the tenant sub-letting, as being understood in the sense of a statutory tenant. Another  contention advanced draws its force from  the  word "sub-let".   It proceeds on the basis that the word  "  sub- let" can only mean transfer of an estate.  It is said  -that cl.  (e) by using the word "sub-let" indicated that  it  did not  contemplate a statutory tenant as he could not  sub-let for  he  had  no  interest  in  the  demised  premises.   No authority  has been brought to our attention in  support  of the contention that letting or sub-letting necessarily means transfer of estate or property and I do not think that it is well  founded.   Decisions of Courts in England to  which  I will later refer, have held that a statutory tenant who  has no estate or property in the demised premises, can  sub-let. When the clause talks of a statutory tenant sub-letting,  it may  not  be contemplating transfer ,of property.   The  Act undoubtedly  creates rights in the tenant in respect of  the property.   He can maintain an ,action for trespass  against any  one including the landlord, illegally depriving him  of the possession of property.  He ,has at least this  interest in the property that he can require possession of, it to  be delivered to him.  It is not as if his 898 right is one only of a personal action in damages.  The sub- letting contemplated in cl. (e) of s. 13(1) may be of’  this statutory  right in the property.  It would be no answer  to this  to say that the right impersonal, for the right  would not be personal in the strict sense if it can be sublet.  In Baker  v. Turner(1) Lord Porter approved of the  observation of  Scrutton  L. J. in Keeves v. Dean(2) about  a  statutory tenant  that "Parliament has certainly called him a  tenant, and he appears to me to have something more than a  personal right against his landlord". Then  it was said that under the clause unlawful  subletting as  also unlawful assignment and transfer were  grounds  for eviction and if the clause implied a power in the  statutory tenant to lawfully sub-let it also must equally imply in him a power to, lawfully assign or transfer his interest in  the tenancy.  It was contended that since it was impossible  for a statutory tenant to assign or transfer any interest in the premises  as he had none, it would follow that he could  not lawfully sub-let either.  In the first place, I do not think that  the  word  "unlawfully"  in  the  clause  applies   to "assigned  or transferred"; I think as the clause stands  it

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 20  

applies  only to sub-letting.  The Act  furthermore  nowhere states  what  is  an unlawful assignment or  transfer  of  a tenant’s interest.  It would undoubtedly have done so if  it contemplated   unlawful  assignment  or  transfer.   It   is significant  that  it  specifically  talks  of  lawful   and unlawful  sub-letting in ss. 14 and 15.  Nor can it be  said that the unlawful assignment or transfer contemplated by cl. (e)  is  one which is against the terms of the  contract  of tenancy,  for  it would be unnecessary to  provide  that  an unlawful  assignment  or transfer by a  contractual  tenant, that is, an assignment or transfer which is contrary to  the terms of the contract of tenancy, would justify an order for possession as in such a case the protection against eviction under  s. 12(1) would have been lost by non-observance of  a condition  of the tenancy.  Therefore, it seems to  me  that the  present  contention  of  the  landlords  wholly   lacks foundation. But  assume I am wrong; that cl. (e)  contemplates  unlawful assignment or transfer of a tenant’s interest in the 1  [1950] A. C. 401, 416. 2 [1924] 1 K. B. 655, 644. 899 demised  premises. A statute can well authorise a  statutory tenant  to  assign or transfer his interest in  the  demised premises.   Indeed  s. 17 of the English Rent  Act  of  1957 provides for the transfer of a statutory tenancy.  It cannot be said that assignments or transfers of statutory tenancies are inconceivable.  It has to be remembered that there is no authority for the proposition that a statutory tenant has no interest in the demised premises and this is at the basis of the theory, which I think is misconceived, that a  statutory tenant cannot transfer his tenancy.  It is true that he  has no estate or property in the demised premises, but that is a different matter.  He has none the less an interest, a right in  the premises occupied by him, which he may be  empowered to  transfer.  Lastly, I am unable to agree that  because  a statutory  tenant cannot transfer, assuming that to  be  so, that  would show that the word "tenant" in cl. (e)  must  be understood  as  referring to a contractual tenant  only.   I think  the  word  must  have  the  meanings  given  in   the definition  including  the  meaning of  a  statutory  tenant unless the context otherwise indicates.  No such  indication can  be  said to be present merely because the word  in  one part of the clause refers to a contractual tenant only. In  Roe v. Russel, (1) the Court of appeal in  England  held that   s.  4(1)(h)  of  the  Rent  and   Mortgage   Interest (Restrictions)  Act, 1923 which provided that no  order  for ejectment  of a tenant from a dwelling house shall  be  made unless  "(h) the tenant without the consent of the  landlord has.......... assigned or sub-let the whole of the dwelling- house  or sub-let part of the dwelling-house, the  remainder being  already sub-let", indicated that a  statutory  tenant had  the power to sub-let a part of the premises.   In  this case  it  had  been held that the statutory  tenant  had  no estate  or  property  as a tenant at all but  had  a  purely personal  right  to  possess, but that did  not  create  any difficulty in the way of the Court holding that he had power to  sub-let.  All subsequent cases in England have  accepted that  Roe v. Russel(1) has laid down the law  correctly.   I entirely  agree  with that view.  In Campbell  v.  Lill,(2), which is an earlier case and which took the same view as Roe v., Russel,(1) the argument that s. 1 [1928] 2 K. B. 117. (2)  (1926) 135 L. T. 26. 900

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 20  

4(1)(h)  of  the English Act of 1923 dealt  only  with  con- tractual  tenants was expressly rejected on the ground  that the  word  meant  both  contractual  and  statutory  tenants throughout  the  section  and it would be  contrary  to  all canons  of  interpretation to give it a  restricted  meaning only  in cl. (h).  I wish also to observe that  the  English provision  made  an  assignment by a  tenant  a  ground  for eviction  but none the less the word "tenant" was  mentioned as  referring to a statutory tenant.  It was not  said  that since  the tenant contemplated was one who could assign,  it must   have  been  that  a  contractual  tenant   only   was contemplated.  These arguments, it will be remembered,  were also advanced in this case. Now the similarity between s. 13(1)(e) of the Bombay Act and s.  4(1)(h) of the English Act is obvious.  If  the  English provision implied that a statutory tenant could sub-let part of the premises, there would be no reason for saying that s. 13(1)  (e)  of  the Bombay Act did not imply a  power  in  a statutory tenant to sub-let lawfully for what was  penalised was only an unlawful subletting.  There is, therefore,  some support  for the view that I have taken.  The learned  judge in  the High Court did not question the correctness  of  the decision  in Roe v. Russel(1) but sought to  distinguish  it from  the  present  case on grounds  which  I  have  earlier discussed.   I  find  that case  indistinguishable  for  the purpose of interpreting s. 13(1)(e) of the Bombay Act. Indeed if cl. (e) of s. 13(1) did not contemplate subletting by  a statutory tenant as the landlords contend, the  result would  be  most anomalous.  Therefore, in my view,  the  Act provides a context which indicates that the word "   tenant" in  that  clause  had been used  as  including  a  statutory tenant.  Suppose a statutory tenant does actually sublet and he  and  his  sub-tenant  are content  to  carry  out  their bargain, as happened in the present case, then the  landlord would  not  be able to take advantage of s. 13 (1)  (e)  and evict the tenant if the contention of the landlords in  this case  is correct, for, ex hypothesi, the sub-letting by  the tenant  was ineffective and, therefore, as good as not  made at all.  The result would be that a contractual ten,ant sub- letting would forfeit the protection under s. 12(1) 1[1928]  2 K. B. 117. 901 while  a  statutory tenant in fact doing so would  still  be entitled  to  the protection of the Act.  This would  put  a statutory  tenant in a better position than the  contractual tenant.  An interpretation of the Act which leads to such  a result  would  be  most unnatural and it is one  that  I  am unable to accept. It  is  not  contended that such  an  anomalous  result  was intended  but it is said that even if the word  "tenant"  in cl.  (e)  of s. 13(1) is understood as referring to  a  con- tractual tenant only, there is no anomaly, for the statutory tenant  would  by  sub-letting  render  himself  liable   to eviction under other provisions of the Act though not  under s.  13(1)(e).  It was contended that a statutory  tenant  is entitled  to  protection  only  so long  as  he  remains  in possession and by sub-letting the statutory tenant would  be forfeiting  his  right to protection under s. 12(1)  of  the Act.   Therefore  it was said that a statutory  tenant  sub- letting would not be in a better position than a contractual tenant doing so. I  am unable to accede to the proposition that  a  statutory tenant sub-letting a part of the premises has so parted with the possession thereof as to forfeit his claim to protection under s. 12(1).  It has to be remembered that in the present

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 20  

case  the  tenant had not parted with the  entirety  of  the premises  bar sub-letting.  In Roe v. Russel(1) it was  said at  p. 134, "when an individual is placed, as the  statutory tenant  undoubtedly  was,  in  the  position  of  having  an exclusive  personal  possession  of  his  premises,  he   is necessarily  in  a position in which he can  place  a  third person in actual possession of a part of the premises, while retaining  possession  of the remainder,  and  that  totally irrespective   of  whether  his  own  right   to   exclusive undisturbed  possession  is purely personal  or  amounts  to something  of  the nature of an estate or  interest  in  the premises.   In Campbell v. Lill(2) it was said, "The  policy of  the  statute is to give protection only  to  persons  in occupation within the meaning of the statute and it aimed at persons  who had parted with possession and such parting  is deemed to have taken place if the tenant assigns or sub-lets the  whole  of the premises or sub-lets part  of  them,  the remainder being already sub-let.  In the present case (1) [1928] 2 K.B. 117. 2  [1926] 135 L. T. 26. 902 the  tenant  sub-let  a portion only and  remained  in  pos- session  of the remainder.  In these circumstances, I  think the tenant is protected." Both  these  cases  show  that  under  the  English  Act,  a statutory  tenant  cannot be said to have parted  with  pos- session  by  sub-letting part of the demised  premises.   It would  appear that under the Bombay Act there is  even  less reason for saying that a statutory tenant sub-letting a part of the demised premises has gone out of possession of  them, for I find nothing in that Act which justifies the view that in  order to be entitled to protection the statutory  tenant must  himself be in possession of the entire  premises.   On the  other hand, the English Increase of Rent  and  Mortgage Interest  (Restrictions)  Act, 1920 by sub-s. (1) of  s.  15 provided  that "a tenant who by virtue of the provisions  of this  Act retains possession of  any  dwelling-house........ shall,  so  long as he retains possession,  observe  and  be entitled  to the benefit of all the terms and conditions  of the original contract of tenancy".  Notwithstanding this the view  in England has been that parting with possession of  a portion  of the demised premises by way of sub-letting  does not deprive a tenant his protection under the Act.  I do not find  any  such  express provision in our  Act  regarding  a statutory  tenant’s possession of the premises. If  the  Act contemplated a statutory tenant sub-letting-and that is  the basis  on  which I am examining the  effect  of  sub-letting under  s. 12(1) it cannot by providing that by doing so,  he would be so far out of possession as to cease to be entitled to the protection of the Act.  Such an interpretation of the Act  would  result  in one part  of  the  Act  contradicting another  and  would  be  wholly  unacceptable.   I  find  no justification in any case for the view that subletting by  a statutory  tenant of a part of the demised premises  results in  a parting with possession of the premises or  that  such parting deprives him of the protection of the Act.  I  think that  s. 13(1)(e) clearly indicates that a statutory  tenant has the power to sub-let. I  now  set out s. 14 of the Act on which the claim  of  the appellant is based. S.14. "Where the interest of a tenant of any premises  is determined for any reason, any sub-tenant 903 to whom the premises or any part thereof have been  lawfully sub-let  before the commencement of the Bombay Rents,  Hotel

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 20  

and Lodging House Rates Control (Amendment) Ordinance,  1959 shall,  subject to the provisions of this Act, be deemed  to become  the  tenant of the landlord on the  same  terms  and conditions  as  he would have held from the  tenant  if  the tenancy had continued." It is not in dispute that the sub-letting took place  before the  date mentioned in this section.  It was contended  that the   word  "interest"  in  the  section  showed   that   it contemplated only sub-letting by a contractual tenant.  I am unable  to  agree for reasons earlier set out.   As  I  have already  said,  a statutory tenant has an  interest  in  the premises  and  when the section talks of the interest  of  a tenant being determined, it obviously means in the case of a statutory tenant, determined by a decree or by such a tenant giving  up  the  protection of the Act.  In  this  case  the interest of the tenant was determined by the decree that was passed  against  him.  I may here state that  the  Ordinance mentioned in the section came into force on May 21, 1959. I,  therefore,  find that the appellant became  a  subtenant before  the date mentioned in s. 14 and the interest of  the tenant who sub-let to it had been determined.  The appellant has  however  still  to prove that "the  premises  had  been lawfully sub-let to it.  The only provision in the Act which declares  a  sub-letting  to be unlawful  is  s.  15.   That section is in these terms : S.15.  (1)  Notwithstanding,  anything contained  in  any law,  but subject to any contract to the contrary, it  shall not  be lawful after the coming into operation of  this  Act for  any       tenant to sub-let the whole or any part of the               premises  let to him or to assign or  transfer               in any other manner his interest therein : Provided  that the State Government may, by notification  in the  Official  Gazette, permit in any area the  transfer  of interest  in  premises held under such leases  or  class  of leases  and  to  such  extent as may  be  specified  in  the notification. (2)Notwithstanding  anything  contained in  any  judgment, decree or order of a Court or any contract, 904 the  bar  against  sub-letting, assignment  or  transfer  of premises  contained  in subsection (1) or  in  any  contract shall,   in  respect  of  such  sub-lessees,  assignees   or transferees as have entered into possession despite the  bar               before  the commencement of the Bombay  Rents,               Hotel and Lodging House Rates Control -(Amend-               ment)  Ordinance,  1959  and  as  continue  in               possession  at  such  commencement,  have   no               effect  and  be deemed never to have  had  any               effect. It is said that the section is confined only to  contractual tenancies.  The argument is that sub-s. (1) makes subletting by  contractual  tenants after the date  mentioned  unlawful excepting  where  the contract otherwise provides  and  that sub-s.  (2) saves from this illegality certain varieties  of sub-lettings  by the tenants.  It is however not in  dispute that  if  the section applies to sub-lettings  by  statutory tenants, then the present sub-letting to the appellant would be saved by sub-s. (2). It  is said that the words "but subject to any  contract  to the contrary" in sub-s. (1) of s. 15 show that that  section was intended to refer to sub-lettings by contractual tenants only.   It  seems  to  me  that  even  if  those  words  are applicable  only when a contractual tenant sub-lets,  as  to which  I  have  some  doubts, that would  not  lead  to  the conclusion that the tenant there referred to is only a  con-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 20  

tractual tenant.  Those words would only be applicable where a covenant permitting sub-letting is contained in the lease. Take a case of a contractual tenant where the lease contains no covenant permitting him to sub-let.  In such a case those words would have no application even though the tenant is  a contractual  tenant.  Therefore where there is  no  contract about  granting  of  sub-leases, the section  may  still  be applicable  and in such a case there would be no  reason  to support  the  view that it is concerned with  a  contractual tenant  only.  The section would have to be  interpreted  in such a case without reference to the words in question.   It would then surely apply to a statutory tenant who, as I have said,  can sub-let.  It cannot therefore be said that s.  15 deals only with a contractual      tenant. But  what  happens if s. 15 does not apply  to  a  statutory tenant?  It was said that that would then show that 905 a statutory tenant cannot at all sub-let.  If apart from  s. 15,  the  proper reading of the Act is, as  I  have  earlier said, that a statutory tenant has the power to sub-let, I do not   see   that  this  section  would  provide   a   ground sufficiently strong to outweigh all the considerations which have  led me to that view.  The only result then, if  s.  15 applies to a contractual tenant alone, would be that a  sub- letting by a tenant would not have been made unlawful by the section.   If  that is so, then also the  appellant’s  claim under  s. 14 would become unchallengable.  Whatever view  is taken  of  s. 15, it is impossible to say that  the  section makes  the sub-letting to the appellant in the present  case unlawful.  It is unnecessary to go into any question of  the Act contemplating a sub-letting which was unlawful for  rea- sons  other than those mentioned in it, for it has not  been contended  that the sub-letting in the present case was  for any  such reason unlawful.  The result is that the  sub-let- ting to the appellant must be held to have been lawful. One other matter remains to be dealt with.  It was said, and this  is  not  in  dispute,  that  the  sub-letting  to  the appellant  took  place after the landlords had  filed  their suit  against  the  tenant which resulted in  a  decree  for ejectment  to  which I have earlier referred.  It  was  con- tended  that  the  appellant was, therefore,  bound  by  the decree in view of s. 52 of the Transfer of Property Act.  On behalf  of the appellant it was said that that  section  was amended  so far as Bombay was concerned by Bombay Act 14  of 1939  and the amended section required certain notice to  be given  before  the  sub-letting could  be  affected  by  the principle  of lis pendens stated in the section.  I  do  not think  it necessary to deal with this contention for  in  my view,  even s. 52 as it stands in the Transfer  of  Property Act without any amendment does not affect the sub-letting in this case. The  first  thing  that I wish to point out  is  that,  that section  does  not make any transfer  of  property  illegal. Therefore,  the section does not justify the view  that  the subletting to the, appellant, assuming it was a transfer  of property, as to which doubts may legitimately arise, was. in any way unlawful or invalid.  If any authority is needed for this proposition, reference may be made to Veyin- 58-2 S C India/64 906 dramuthu Pillai v. Maya Nandan.(1) All that s. 52 does is to provide  that pending a litigation concerning property,  the property cannot be transferred so as to affect the rights of any party thereto under the decree that may be passed in the suit.   The  only  effect then of the section  is  that  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 20  

rights  of the decree-holder under the decree are not to  be affected by the transfer. Now  the  rights  of  a  landlord  who  gets  a  decree  for possession  of  property against his tenant are  those  men- tionEd  in 0. 21, r. 35 of the Code, namely, to  obtain  de- livery of it "if necessary, by removing any person bound  by the decree who refuses to vacate the property".  It is  true that  a  sub-tenant under the general law  of  landlord  and tenant  is  a  person bound by the decree  obtained  by  the landlord  against the tenant for possession, though  he  was not  made a party to the suit.  The reason for this is  that the  sub-tenant’s right to remain in possession came  to  an end  with the determination of the tenancy of the  tenant  : see  Yusuf v. lyotish Chandra Banerji(2).  Where  however  a statute  like  the Act in the present case  gives  the  sub- tenant  a  right to continue in possession  even  after  the determination  of  the tenancy of the  superior  tenant,  he would  not be a person bound by the decree for  his  tenancy has  not  come to an end with the tenancy  of  the  superior tenant.   A  sub-tenant to whom the premises  were  lawfully sub-let,  would  under s. 14 of the Act be  such  a  person. That  being so, a decree obtained by a landlord against  his tenant  does not give him a right to evict a sub-tenant  who is  entitled to the benefit of s. 14.  Section 52 could  not be resorted to by the landlords in the present case to evict the appellant. I would for these reasons allow the appeal. SHAH,  J.-A  lease of the ground and the first floors  of  a building  named ’Anand Bhavan’ in the town of Ahmedabad  was granted by the trustees of the trust named "Anandji Kalyanji Pedhi" to one Maneklal, for five years commencing from March 5,  1950  at  a  monthly  rental  of  Rs.  2,000/.   A  suit instituted  by  the trustees in the Court  of  Small  Causes (which is the Court competent under (1)  (1920) I.L.R. 43 Mad. 696.  (2) (1932) I.L.R.  59  Cal. 739. 907 s.28  of the Bombay Rents, Hotel and Lodging House  Rates Control  Act  57  of 1947-hereinafter  called  ’the  Act’-to entertain the suit) against Maneklal after the expiration of the  period of the lease for a decree in ejectment  and  for arrears of rent was decreed on June 22, 1960.  In  execution of the decree the trustees obtained possession of the  first floor  but  were  obstructed as to the  rest  by  a  private limited  company called-"Anand Nivas Private  Ltd."-and  two others  who  claimed  to be sub-Iessees  from  Maneklal  and thereby  to  have acquired rights of tenancy of  the  ground floor upon the determination of the tenancy of Maneklal. Anand  Nivas  Private Ltd-which will hereinafter  be  called ’the  Company’-filed  Suit No. 2814 in the  Court  of  Small Causes at Ahmedabad for a declaration that it was not  bound to  deliver possession of the premises in its occupation  in execution  of the decree in the suit filed by  the  trustees against  Maneklal  and  for  an  induction  restraining  the trustees   from   enforcing  the  decree.    The   Company’s application  for an injuction restraining the trustees  from obtaining  possession in enforcement of the decree  obtained by  them  against the tenant was dismissed by the  Court  of First  Instance.  In appeal against that order the  District Judge,  Ahmedabad refused an interim  injuction  restraining the  trustees from executing the decree pending the  hearing and  disposal of the appeal.  The High Court of Gujarat  was then  moved  against that order by a petition  invoking  its revisional jurisdiction.  At the hearing, die petition  was, by  order of the Court, converted into an appeal from  order

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 20  

refusing  to grant an injuction.  The High  Court  dismissed the  appeal holding that a "statutory tenant"  remaining  in possession  after determination of his  contractual  tenancy was in law not competent to sublet the premises in whole  or in  part  and a person claiming to be a  sub-tenant  from  a statutory tenant could not effectively plead the  protection of  s. 14 of the Act as amended by Ordinance III of 1959  or Bombay Act 49 of 1959.  With special leave, the Company  has appealed to this Court. The  Company sets up its claim to protect its possession  on the, plea that it had acquired die , rights of a 908 tenant  by  virtue  of  s. 14 of  the  Act.   This  plea  is supported on two grounds : (i)that  the contract of tenancy in favour of  the  tenant expressly  authorised him to sublet, and the  tenant  having lawfully  sublet  the premises the Company acquired  on  the determination of the interest of the tenant the rights of  a tenant under the landlord; and (ii)in  any event, on the -determination of  the  statutory tenancy  of  the tenant by virtue of Ordinance III  of  1959 issued by the Goveronr  of Bombay, retrospectively  amending               s.  15  of the Act the  Company  acquired  the               rights of a tenant under the landlord. In  the  view  of the High Court clause  (i)  of  the  lease restricted  "the  ordinary rights of the  tenant  to  sublet under s. 108(j) of the Transfer of Property Act", and cannot be interpreted as conferring any right on the tenant to sub- let,  because  it "postulates the existence of  a  right  to sublet,  and  provides for restrictions on the  exercise  of such  right".  Whether the covenant in the lease  authorised or  recognised the power of subletting in the tenant  before the period of the lease expired, need not be decided in this appeal.   It is common ground that after the  expiration  of the period of the lease, no extension of or fresh lease  was granted to the tenant, and he could set up only such  rights as the Act granted or recognised. Sub-section (1) of s. 12 of the Act provides "A  landlord  shall  not  be entitled  to  the  recovery  of possession of any premises so long as the tenant pays, or is ready  and willing to pay, the amount of the  standard  rent and  permitted increases, if any, and observes and  performs the  other conditions of the tenancy, in so far as they  are consistent with the provisions of this Act." For  the  protection of tenants the clause  imposes  a  pro- hibition against the landlord against recovery of possession of the premises demised to a tenant so long as he pays or is ready  and  willing to pay the standard rent  and  permitted increases   and  also  observes  and  performs   the   other conditions of the tenancy consistent with the provisions  of the  Act.  A person remaining in occupation of the  premises let to him after the determination of or ex- 909 piry of the period of the tenancy is commonly though in  law not  accurately, called a "statutory tenant.  Such a  person is not a tenant at all: he has no estate or interest in  the premises  occupied by him.  He has merely the protection  of the  statute in that he cannot be turned out so long  as  he pays the standard rent and permitted increases, if any,  and performs the other conditions of the tenancy.  His right  to remain   in  possession  after  the  determination  of   the contractual tenancy is personal: it is not capable of  being transferred  or assigned, and devolves on Ms death  only  in the  manner provided by the statute.  The right of a  lessee from  a landlord on the other hand is an estate or  interest

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 20  

in  the  premises and in the absence of a  contract  to  the contrary  is transferable and the premises may be sublet  by him.   But with the determination of the lease,  unless  the tenant  acquires  the  right of a tenant  holding  over,  by acceptance  of  rent  or  by assent  to  his  continuing  in possession by the landlord, the terms and conditions of  the lease  are  extinguished, and the rights of  such  a  person remaining  in possession are governed by the statute  alone. Section  12(1)  of the Act merely recognises  his  right  to remain  in  possession so long as he pays or  is  ready  and willing to pay the standard rent and permitted increases and performs  the other conditions of the tenancy, but  not  the right  to enforce the terms and conditions of  the  original tenancy   after   it  is  determined.   On   a   matter   of interpretation of s. 12(1) the decisions of the King’s Bench Division  of  the  High  Court  in  England,  viz.   Roe  v. Russel(1)  and  Lewis v. Reeves(2), on  which  reliance  was placed  by  the appellant are of little  assistance.   Those cases  were  decided on the interpretation of  the  relevant provisions  of  the Increase of Rent and  Mortgage  Interest (Restriction)  Act,  1920  (10 & 11, Geo.  5  Ch.  17),  and particularly of s. 15(1). In Roe v. Russel(1) the question whether a statutory  tenant of a dwelling-house holding upon terms which do not prohibit subletting,  may sublet part of the dwelling house, fell  to be  determined, and the Court held that a right to sublet  a part of the premises provided the remainder was not  already sublet could be claimed by a (1)  [1928] 2 K.B. 117. (2)  [1951] 2 All E.R. 855. 910 statutory tenant relying upon the "terms and conditions"  of the  original contract of tenancy.  A similar view was  also taken  in Lewis v. Reeves(1).  In that case the widow  of  a statutory  tenant remaining in possession, sublet a part  of the  premises  in her occupation.  It was held that  on  the death  of the widow the sub-tenant became the direct  tenant of  the  landlord,  because  subletting of  a  part  of  the premises by the widow of a statutory tenant who acquired all the rights under s. 12(1)(g) of the Rent Act (10 & 11 Geo. 5 Ch.17) was lawful. But  these  cases were decided on the interpretation  of  s. 15(1)  of the Act of 1920, which insofar as it is  relevant, provided : "A  tenant  who  by virtue of the  provisions  of  this  Act retains  possession of any dwelling-house to which this  Act applies shall, so long as he retains possession, observe and be  entitled to the benefit of all the terms and  conditions of the original contract of tenancy, so far as the same  are               consistent  with the provisions of  this  Act,               and       *          *         *               " The  terms of s. 15(1) of the Increase of Rent and  Mortgage Interest  (Restriction)  Act, 1920, differ  materially  from sub-s.  (1)  of s. 12 of Bombay Act 57 of 1947.   Whereas  a tenant who retains possession, and is protected by virtue of the provisions of the English Rent Act is entitled, so  long ashe retains possession, to the benefit of all the  terms andconditions  of the original contract of tenancy so  far asthey are consistent with the provisions of the Act, the Bombay  Act  merely  grants  conditional  protection  to   a statutory  tenant and does not invest him with the right  to enforce  the benefit of any of the terms and  conditions  of the original tenancy.  This difference in the phraseology of the two enactments is vital to the matter under  discussion,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 20  

and  we  are  unable to hold-assuming that  the  tenant  was entitled  to  sublet  the premises under the  terms  of  the Iease-that  he  could, relying upon s. 12(1),  exercise  the right  to sublet granted under the lease after he  became  a statutory  tenant.  The first ground on which the claim  was founded by the Company must therefore fail. (1)  [1951] 2 All.  E.R. 855. 911 The  second  ground  on which the Company claimed  to  be  a lawful tenant of the trustees cannot also be sustained.   In the High Court it was common ground between the parties that the tenant continued to remain in possession after March  5, 1955  of  the  premises leased to him  not  because  of  any renewal  or grant of a fresh tenancy, but in virtue  of  the protection  afforded  to  him by, the Act  as  a  ’statutory tenant’.  As a statutory tenant he had no estate or interest capable of being assigned or transferred, and his  statutory right to occupy could not in law be sublet, because a lawful subletting  postulates a right: to enjoy the property and  a right  to  transfer the same to another.  There  can  be  no subletting when there is no right in the premises especially when the statutory tenancy ceases when the tenant parts with possession.   The  decision of the Calcutta  High  Court  in Krishna  Prosad  Bose v. Sm.  Sarajubala Dassi(1)  on  which reliance  was placed by the Company in support of  its  plea that  a statutory tenant is entitled to sublet the  premises in  his occupation does riot assist the argument.  The  West Bengal  Premises  Rent Control (Temporary  Provisions)  Act, 1950, recognises the right of a statutory tenant to  sublet. Section   12(1)  of  the  West  Bengal  Act  provides   that notwithstanding anything to the contrary in any other Act or law,  no order or decree for the recovery of  possession  of any  premises  shall be made by any court in favour  of  the landlord  against a tenant, including a tenant  whose  lease has  expired.  By the proviso it is enacted that nothing  in the  sub-section  shall apply to any suit for a  decree  for such recovery of possession against a tenant who has  sublet the  whole or a major portion of the premises for more  than seven  consecutive months provided that if a tenant who  has sublet  the major portion of the premises agrees to  possess as  a  tenant  the portion of the  premises  not  sublet  on payment  of rent fixed by the Court, the Court shall pass  a decree  for  ejectment from only a portion of  the  premises sublet  and  fix proportionately fair rent for  the  portion kept  in possession of such tenant.  By sub-s. (2) of s.  13 it is provided, in so far as it is material, that where  any premises or any part thereof have been or has been sublet by a tenant of the first degree, if the tenancy of such tenant (1) A.I.R. 1961 Cal. 505. 912 is lawfully determined otherwise than by virtue of a  decree in  a suit obtained by the landlord by reason of any of  the ground specified in clause (h) of the proviso to sub-section (1)  of section 12, the sub-lessee shall be deemed to  be  a tenant in respect of such premises or part, as the case  may be, holding directly under the landlord for the tenant whose tenancy  has  been  determined.  In  Krishna  prosad  Bose’s case(1) Sinha, J., set out certain principles governing  the position of a statutory tenant of which the seventh set  out below is material : "Although a statutory tenant has no estate, and although his right is a personal right, he can sublet, provided the right of  subletting  can  be  spelt out  from  the  Rent  Act  in operation,  either  from its express terms or  by  necessary implication.   The sub-tenant will get only such  rights  as

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 20  

are conferred by the statute" and  observed  that  the right of the  statutory  tenant  to sublet was clearly recognized by s. 13(2), and the right  of a  sub-tenant to become a direct tenant under the  owner  in certain  circumstances was expressly provided for.   We  are not concerned in this case to decide whether the  provisions of the Act were correctly interpreted by the Court: ’it  may be  sufficient  to observe in this case that  the  Court  in Krishna Prosad’s case (1) held that the right of a statutory tenant  to  sublet  was  recognised  by  the  statute  which afforded him protection. But  it was urged that by Ordinance III of 1959 a  right  to sublet premises in the occupation of a statutory tenant  was invested  retrospectively  since  the  commencement  of  the parent  Act.  It is common ground that the tenant  purported to sublet a part of the premises in his occupation after the trustees  instituted  a suit in ejectment against  him,  and before  Ordinance III of 1959 was promulgated.  The  Company has  claimed the right of a subtenant on the  second  ground relying  upon the Ordinance, ,and it would be  necessary  to consider the material statutory provisions as amended by the Ordinance. Section 5(11) as amended defines a "tenant" as meaning : (1) A.I.R. 1961 Cal. 505. 913 "any person by whom or on whose account rent is payable  for               any premises and includes-               (a) such sub-tenants and other persons as have               derived  title  under  a  tenant  before   the               commencement  of  the Bombay Rents  Hotel  and               Lodging   House  Rates   Control   (Amendment)               Ordinance, 1959; (a            ) any person to whom interest in premises  has               been  transferred  under the proviso  to  sub-               section (1) of section 15; (b)  any  person remaining, after the determination  of  the lease,  in  possession, with or without the  assent  of  the landlord,  of  the  premises leased to  such  person  or  Ms predecessor who has derived title before the commencement of the   Bombay  Rents,  Hotel  Lodging  House  Rates   Control (Amendment) Ordinance, 1959; (c)  any member of the tenant’s family residing with him  at the  time  of  his death as may be  decided  in  default  of agreement by the Court." The expression "tenant" in the different clauses is  defined to mean a contractual tenant or a statutory tenant or  both. In  the principal definition the expression  "tenant"  means only  a person who is a contractual tenant because  rent  is payable  by  a  contractual tenant and not  by  a  statutory tenant.   By cl. (a) sub-tenants and other persons who  have derived title under a tenant before the commencement of  the Ordinance  III of 1959 would be regarded as tenants.   These would be sublessees, transferees or assignees of contractual tenants.   Similarly by cl. (a) persons to whom interest  in premises  has been transferred in virtue of  a  notification issued  by the State Government permitting in any  area  the transfer  of interest in premises held under such leases  or class  of leases and to such extent as may be  specified  in the  notification,  would  be  transferees  of   contractual tenants.  Clause (b) contemplates a tenant holding over  and a statutory tenant alike; it takes in a person remaining  in occupation with or without the assent of the landlord,  when the premises were let to him or to Ms predecessor before the commencement  of the Ordinance.  Clause (c) includes in  the definition  the members of the family of a  tenant-statutory

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 20  

or  contractual residing with him at the time of his  death, as may 914 be  decided  in default by agreement by the  Court.   Having regard  to the plurality of its meaning, the sense in  which the  expression  is  used in different  sections,  and  even clauses, must be ascertained from the context of the  scheme of  the  Act; the language of the provision and  the  object intended to be served thereby. In sub-s. (1) of s. 12 which imposes a prohibition against a landlord  recovering possession of premises, the  expression "tenant" must of necessity mean a statutory tenant and not a contractual  tenant, for unless the contractual  tenancy  is determined, the landlord has no right to recover possession. Section 13(1)(e), in so far as it is material, provides that : "Notwithstanding anything contained in this Act, but subject to  the  provisions  of  section 15,  a  landlord  shall  be entitled to recover possession of any premises if the  Court               is satisfied- (e)  that the tenant has, since the coming into operation of this  Act,  unlawfully  sublet  the whole  or  part  of  the premises or assigned or transferred in any other manner  his interest therein;" In  this clause the expression "tenant"  apparently-means  a contractual tenant, for it authorises a landlord to  recover possession of premises if the tenant has unlawfully  assign- ed,  transferred his interest in the premises or has  unlaw- fully sublet the premises.  A statutory tenant has no  inte- rest  in the premises occupied by him, and he has no  estate to  assign or transfer.  To read the clause as meaning  that an  assignment  or transfer of any premises  which  attracts liability  to  eviction would be only in respect of  a  con- tractual  tenancy  whereas  subletting  which  invites  that penalty  may  be  in respect  of  tenancies-contractual  and statutory alike, would be to attribute to the Legislature an intention to impute two different meanings to the expression "  tenant"  in  cl.  (e)  of  s.  13(1).   By  cl.  (e)  the Legislature  has recognised the right of a landlord  to  re- cover  possession if the tenant has without being so  autho- rised by contract, sublet in whole or in part the  premises, or assigned or transferred in any other manner his  interest therein.   The adverb "unlawfully" qualifies all  the  three verbs-sublet, assigned and transferred.  That is clear from 915 the  terms of s. 15(1) which prohibits "subject to any  con- tract to the contrary" subletting of premises or  assignment or transfer of interest therein. Section 15(1) provides : "Notwithstanding anything contained in any law, but  subject to  any  contract to the contrary, it shall  not  be  lawful after  the coming into operation of this Act for any  tenant               to  sub-let  the  whole or  any  part  of  the               premises  let to him or to assign or  transfer               in any other manner his interest therein : Provided that the State Government may, by notification  in- the  Official  Gazette, permit in any area the  transfer  of interest  in  premises held under such leases  or  class  of leases  and  to  such  extent as may  be  specified  in  the notification." By  cl.  (1)  of  s. 15 all  transfers  and  assignments  of interest  in  the premises, and subletting of  premises,  by tenants  are, subject to any contract to the contrary,  made unlawful.   The  clause  however  saves  contracts  to   the contrary  and to be effective can operate only in favour  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 20  

contractual tenants.  A statutory tenant having no  interest in  the  property, it was plainly  unnecessary  to  prohibit transfer of what was ineffective.  Nor can there be  letting of   the  premises  by  a  statutory  tenant,  for   letting postulates  a transfer of the right to enjoy  property  made for a certain time, express or implied, in consideration  of price  paid or promised and a statutory tenant has merely  a personal right to resist eviction.  Section 15(1)  therefore applies  only  to contractual tenants.  The proviso  to  the clause  also furnishes an indication to that effect for  the exemption which the Provincial Government may grant can only be  in  respect  of  leases or  a  class  of  lease.(.  Sub- section(2)  is  in  terms  an  exception  to  sub-s.(1).  It provides that : "Notwithstanding anything contained in any judgment,  decree or  order  of  a  Court or any  contract.  the  bar  against subletting, assignment or transfer of premises contained  in subsection (1) or in any contract shall, in respect of  such sub-lessees   ,  assignees  or transferees as  have  entered               into  possession  despite the bar  before  the               commencement  of the Bombay Rents,  Hotel  and               Lodging House Rates Control (Amendment)  Ordi-               nance,  1959 and as continue in possession  at               such 916 commencement, have no effect and be deemed never to have had any effect." The exception clause could manifestly not apply to statutory tenancies  when  the  principal  clause  applied  only   to- contractual tenancies.  The effect of the clause is to vali- date  assignments,  transfers and sub-tenancies  granted  by contractual  tenants, despite the prohibition  contained  in sub-s.  (1)  or even in the contract of  tenancy,  and  this validation  is  effective,  notwithstanding  any   judgment, decree  or  order of a Court.  The  sub-section  is  plainly retrospective,  and  protects  sub-tenants  of   contractual tenants  and removes the bar against sub-letting  by  sub-s. (1) as well as by contract, provided that the transferee  is in possession at the commencement of the Ordinance. The  argument  that  by  restricting  the  operation  of  s. 13(1)(e)  to  contractual tenants  subletting  by  statutory tenants  would be protected, is without force,  Sections  12 and 13(1) have to be read together.  Clause (e) of s.  13(1) entitles   a   landlord  to  obtain  possession,   where   a contractual tenant has during the subsistence of the tenancy sublet the premises or assigned or transferred his  interest therein.  Where a statutory tenant has purported  to  sublet the  premises,  or has purported to assign or  transfer  his interest  therein,  and in pursuance of such  a  transaction parted  with  possession,  he would  forthwith  forfeit  the protection which the statute accords to him by s. 12(1). In the light of this legal position the claim of the Company founded on s. 14 may be considered.  The section enacts : "Where  the  interest  of  a  tenant  of  any  premises   is determined  for  any  reason, any  sub-tenant  to  whom  the premises  or  any  part thereof have  been  lawfully  sublet before  the  commencement  of the Bombay  Rents,  Hotel  and Lodging  House  Rates Control (Amendment)  Ordinance,  1959, shall,  subject to the provisions of this Act, be deemed  to become  the  tenant of the landlord on the  same  terms  and conditions  as he  would  have held from the  tenant  if  the               tenancy had continued." There is abundant indication in the section that it  applies to  contractual tenancies alone.  In the first  instance  it speaks of the interest of the tenant and determination of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 20  

917 that  interest.   It then invests a sub-tenant to  whom  the premises  have been lawfully sublet before the date  of  the Ordinance with the rights of a tenant of the landlord on the same  terms  and conditions as he would have held  from  the tenant  if the tenancy had continued.  The subletting to  be lawful must be permitted by contract, or validated by sub-s. (2)  of  s.  15.  The object of s. 14  is  to  protect  sub- tenants.   By that section forfeiture of the rights  of  the tenant in any of the contingencies set out in s. 13 does not in all cases destroy the protection to the sub-tenants.  The protection  which a sub-tenant is entitled to claim  against his  own  landlord  (that is the  head  tenant)  becomes  on determination  of the head tenancy available to him  against the  head landlord, but the condition on which such a  claim may  be sustained is that there is a lawful  subletting.   A statutory  tenant is, as we have already observed, a  person who on determination of his contractual right, is  permitted to remain in occupation so long as he observes and  performs the conditions of the tenancy and pays the standard rent and permitted  increases.  His personal right of  occupation  is incapable of being transferred or assigned, and he having no interest  in  the  property  there is  no  estate  on  which subletting  may operate.  If it be assumed that a  statutory tenant  has  the right of subletting, some  very  surprising consequences may ensue.  A statutory tenant by parting  with possession  of the premises would forfeit all rights in  the premises  occupied by him, but he would still, if s.  14  is construed as suggested by the Company, be able to create  an interest  in  the  person  inducted  in  the  premises   not derivatively but independently, for the statutory tenant had no  interest in the premises and the protection  granted  by the  statute  is by the very act of transfer  of  possession extinguished.   Again  even  though  the  sub-tenant  of   a statutory  tenant  may  not be protected,  because  the  bar against  such  subletting is not effectively removed  by  s. 15(2),  he would still be entitled to claim the rights of  a tenant  under s. 14 on determination of the tenancy  of  the head  tenant.  Having regard to these  considerations  there can be little doubt that a sublessee from a statutory tenant under the Act acquires no right of a tenant in the  premises occupied by him. 918 Even  under  the  Increase of  Rent  and  Mortgage  Interest (Restriction) Act, 1920, protection was accorded to the sub- tenant  of  a part of the premises occupied by  a  statutory tenant : when the statutory tenant parted with possession of the  entirety of the premises occupied by him either by  one subletting or more or by subletting of part and  surrendered of the rest of the premises, the persons claiming a right of occupation  derivatively  from the statutory tenant  had  no protection : Solomon v. Orwell(1).  In that case a statutory tenant  of a dwelling-house bad sublet a part of the  house, vacated  the premises in her occupation by removing  herself therefrom.  The landlord then filed a suit against the  sub- tenant  who had remained in possession of a part  sublet  to her.   The subtenant submitted that after the  surrender  of the  statutory tenancy, she was entitled to the same  rights against  the  landlord  as  the  statutory  tenant  had  and therefore  her  tenancy could not be  terminated  by  merely giving  a notice to quit.  This contention was  rejected  by the  Court holding that "a statutory tenant had no  interest capable  of  existing  in law as an  estate,  but  merely  a statutory right of occupation which could not be the subject of surrender at common law, and, therefore, when the  tenant

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 20  

vacated  the premises the sub-tenant’s right  of  occupation automatically came to an end." We therefore hold that before the  date  of  the institution of the  suit,  Manekal  as  a statutory tenant had no right to sublet the premises and the Company  acquired no right of a tenant on the  determination of the tenant’s right by virtue of s. 14 of the Act. One more argument remains to be considered. It was  urged-on the  assumption that a statutory tenant has an  interest  in the  property  occupied by him, and that  by  purporting  to sublet he transferred that interest-that the doctrine of ’ut lite  pendente nihil innovetur’ enunciated in s. 52  of  the Transfer of Property Act did not operate against the Company and the Company was not bound by the decree obtained against the  tenant.   Reliance in support of that plea  was  placed upon   the   Transfer  of  Property  Act  and   the   Indian Registration  (Bombay Amendment) Act, XIV of 1939.  By  this Act the rule of ’Lis Pendens’ applies only when a notice  of the pendency [1954] 1 All E.R. 874. 919 of  the  suit in which any right to immoveable  property  is directly  and specifically in question, is registered  under s.  18 of the Registration Act.  The Act is some what  clum- sily worded : it applies not to proceedings in Court but  to notices in respect of suits or proceedings.  But the  reason for  the  method  of drafting adopted is not  far  to  seek. Condition of registration of notice relating to the suit  is only  to  apply  where the suit is in  respect  of  property situate  in the area to which the Act is extended.   A  suit relating  to  immoveable  property  may,  in  certain   cir- cumstances,  lie in a Court other than the Court within  the territorial  jurisdiction whereof it is situate (e.g.  under cl. 12 of the Letters Patent and s. 17 Code of Civil  Proce- dure)  and it appears that the Legislature intended to  make the Act applicable only to transfers of title to immoveables only   in  areas  where  the  litigants  were   sufficiently sophisticated to understand the importance of  registration. As Bombay Act XIV of 1939, it intended to apply to the situs of  immoveable  property  and  not  the  Court   proceeding, application  of the rule of ’Lis Pendens’ is, in respect  of proceedings  relating  to immoveable properties  situate  in certain areas, made conditional upon the registration of the notice of the pendency of the suit. But  this  Act  did  not apply to  the  suit  filed  by  the trustees.   The Act by s. 2 applies only to notices in  res- pect  of  suits or proceedings which  relate  to  immoveable property situate wholly or partly in Greater Bombay.  By the proviso  to  s.  2  it may be  extended  by  the  Provincial Government by notification to notices relating to immoveable properties  situate wholly or partly in such other areas  as may be specified.  The suit was filed by the trustees in the Court of Small Causes at Ahmedabad and our attention has not been  invited to any notification issued by the  appropriate Provincial Government extending the Act to notices  relating to  immovable  properties in areas outside  Greater  Bombay. Whereas  the  rule of ’Lis Pendens’ under  the  Transfer  of Property  Act aplies to all suits and proceedings which  are not  collusive in which the right to immoveable property  is directly  and  specifically in question, by  virtue  of  the amended  Act  the rule applies in  proceedings  relating  to immoveable property in the areas notified, only if a  notice of suit is registered, and from the date of regis- 920 tration.   The section in terms applies only to  notices  in respect  of suits or proceedings which relate to  immoveable

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 20  

property in the Greater Bombay Area-it does not apply to any suits  in  which  property  in Greater  Bombay  is  not  the subject-matter in dispute. The  Transfer of Property (Bombay Provision  for  Uniformity and  Amendment)  Act, 57 of 1959, does not also  assist  the Company.   By that Act, amongst other things, uniformity  in the provisions of the Transfer of Property Act as amended in its  application to the State of Bombay as it existed  after the  enactment  of the States Reorganisation Act  1956,  was sought  to be achieved.  Section 3 of the Act  enacted  that the  provisions of Bombay Act XIV of 1939 which amended  the Transfer  of  Property Act in its application  to  the  pre- reorganized  State  of Bombay, were extended  to  and  shall apply to that part of the State to which they did not  apply immediately before the commencement of that Act.   Enactment of this Act was necessitated because of s. 119 of the States Reorganization  Act, 1956, which continued,  notwithstanding the  formation of the new States, the territorial extent  of the laws previously in operation.  It was found expedient to secure uniformity of the laws in the State, and therefore it was enacted by the State Legislature that one of the  condi- tions of the applicability of the rule of ’Lis Pendens’  was that  notice of a suit or proceeding in which any  right  to immoveable  property within the area notified under s. 2  of Act  XIV of 1939, is directly and specifically in  question, is  registered  under s. 18 of the  Registration  Act.   The decree  in the suit filed by the trustees  against  Maneklal was therefore enforceable against the Company. The appeal fails and is dismissed with costs.                        ORDER BY COURT The  appeal  is dismissed with costs.   On  the  Appellant’s undertaking to vacate and deliver possession of the property within  one  month  from  today,  execution  of  the  decree obtained  by the Respondent in Suit No. 707 of 1956  against Maneklal  Mafatlal,  is stayed for  one  month.September  5, 1963. 921