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PETITIONER: LUDHICHEM AGENCIES ETC.

       Vs.

RESPONDENT: AHMED R.V. PEER MOHAMED AND ANR.

DATE OF JUDGMENT15/09/1981

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. ISLAM, BAHARUL (J)

CITATION:  1981 AIR 1998            1981 SCC  (4) 273  1981 SCALE  (3)1410  CITATOR INFO :  E&R        1987 SC 117  (53)  RF         1991 SC1494  (13)

ACT:      Bombay Rents  Hotel and Lodging House Rates Control Act 1947 Ss  14(1) (2)  and 15A(1)-Landlord  terminating tenancy and obtaining  decree for ejectment-Sub-tenant when entitled to statutory protection.

HEADNOTE:      Respondent No.  1 who  was the landlord and had let out the petition  premises to  respondent No. 2, served a notice (dated July  28, 1962)  terminating her tenancy and filed an ejectment suit.  A decree for ejectment was passed (in 1966) and the  appeal of respondent No. 2 was dismissed (in 1972). The   landlord   took   out   execution   of   the   decree. Obstructionist notice  served on  the petitioners  who  were sub-tenants of  respondent No. 2 was made absolute in favour of the landlord. The pensioners’ appeal was dismissed.      Dismissing the  petitioners’ suits against the landlord for  a   declaration  that   they  were  lawful  sub-tenants /licensee entitled  to the  protection of  the Bombay Rents, Hotel and  Lodging House  Rates Control Act, 1947 and for an injunction  restraining  the  landlord  from  executing  the decree for ejectment the trial Court held that they were not entitled to  the benefit of the Act as lawful sub tenants or as deemed tenants or as protected licensees. The petitioners appeals were  dismissed  on  the  ground  that  having  been inducted into the premises after 1960 they were not entitled to be regarded as lawful sub-tenants.      In the  Special Leave  Petitions to  this Court  it was contended that  the petitioners:  (1) must  be  regarded  as licensees entitled to the benefit of section 14(2) read with section  15-A(1)   of  the  Act:  and  (2)  having  been  in occupation since  1943 and  having in 1960 merely restricted their occupation to the portions occupied by them, they were lawful sub-tenants  since 1943, and, therefore, by virtue of section 14(1)  they must  be  regarded  as  tenants  on  the determination of respondent No. 2’s tenancy.       Dismissing the Special Leave Petitions: ^      HELD: 1.  An agreement  for  licence  can  subsist  and

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continue only  so long  as the licensor continues to enjoy a right, title or interest in the premises. On the termination of his  right,  title  or  interest  in  the  premises,  the agreement for  licence comes to an end. If the licensor is a tenant,  the  agreement  for  licence  terminates  with  the tenancy. No  tenant  is  ordinarily  competent  to  grant  a licence beyond  his  tenancy.  On  the  termination  of  the licensor’s tenancy the licensee cases to be a licensee. This loss of status is the point 713 from which  sub-section (2)  of section 14 of the Act begins to  operate   and  in  consequence  of  its  operation,  the erstwhile licensee  becomes a  tenant of the landlord on the terms and conditions of the agreement. [715 F-H]      In the  instant case  respondent No.  2 ceased  to be a tenant of  any description long before February 1, 1973. The contractual tenancy  came to  an end when the notice to quit took effect  and the  statutory tenancy  terminated when the decree for  ejectment was  passed thereafter.  When she  had ceased  to  be  tenant,  the  agreement  for  licence  stood automatically terminated  by reason of which the petitioners cannot claim to be licensees on February 1, 1973. [715 H-716 B]      2. The benefit of section 14(1) can be claimed by a sub tenant to whom the premises had been lawfully sub-let before the commencement  of the  Bombay Rents,  Hotel  and  Lodging House Rates Control (Amendment) Ordinance, 1959.                                                   [716 E]      In the  instant case  the sub-tenancy has been found to commence from  1962 and  not earlier.  The benefit  of  sub- section (1) of section 14 cannot be available, and there can be no right to continue in possession. [716 F]      Madhusudan  A  Mahale  v.  P.M.  Gidh  and  others,  16 Maharashtra Law Journal, 436 held inapplicable.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 5631 of 1981.                             AND      S.L.P. (Civil) No.5632 of 1981 With S.L.P. (Civil) Nos. 5698-5701 of 1981.      From the  judgment and  order dated the 15th July, 1981 of the  Bombay High  Court in Writ Petition Nos. 1814, 1965, 1966, 1913 and 1815 of 1981 respectively.      Soli J. Sorabjee, P.H. Parekh and Hemant Sharma for the petitioners in SLP No. 5631 of 1931.      D. V.  Patel, P.H.  Parekh and  Hemant Sharma  for  the petitioners in SLP No. 5632 of 1981.      Anil B.  Dewan, S.V.  Bhat, R. Satish and E.C. Agarwala for the respondents.      The Judgment of the Court was delivered by      PATHAK, J.  This and  the connected  petitions pray for special leave to appeal to this Court against the refusal of the Bombay  High Court  to grant relief under Article 227 of the Constitution in the 714 matter of  the dismissal  of six  declaratory suits filed by the petitioners.      The first  respondent, Ahmed  R.V. Peer Mohamed, is the owner  of   a  property,   "Peerbhai  Mansion",  situate  on Vithalbhai Patel  Road, Bombay.  He let out the entire first floor to  the second respondent, Smt. Saraswatibai Dahyabhai Bhatt. The  first floor  consisted of a hall and three rooms

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and an  adjoining terrace.  It seems  that Saraswatibai sub- divided the  hall into  a number  of cabins, and transferred them to  the occupation  of the  petitioners in this and the connected special  leave petitions.  The landlord  served  a notice dated  July 28,  1962 on  her terminating her tenancy and thereafter filed an ejectment suit No. 576/5157 of 1962. A decree  for ejectment  was passed  in 1966.  An appeal  by Saraswatibai was  dismissed in  1972. The  landlord took out execution of the decree. Obstructionist notice was served on all the petitioners and was made absolutely in favour of the landlord on February 27, 1974. The petitioners appealed, and on November 30, 1976 these appeals were dismissed.      The six petitioners then filed separate suits Nos. 5734 to 5739  of 1976 against the landlord for a declaration that they were  lawful sub-tenants  or licensees  entitled to the protection of  the Bombay  Rents, Hotel  and  Lodging  House Rates Control  Act, 1947  and  for  a  permanent  injunction restraining the  landlord  from  executing  the  decree  for ejectment obtained against Saraswatibai. During the trial of the suits  the sole issue pressed before the trial Judge was whether the  petitioners were entitled to the benefit of the Act as  lawful  sub-tenants  or  as  deemed  tenants  or  as protected licensees.  The Trial  Judge ruled  that they were not so  protected and  he dismissed  the suits  on March 29, 1978. The  petitioners appealed.  The only  point raised  in appeal was  whether the  petitioners could  be described  as lawful sub-tenants  or protected  licensees.  Affirming  the findings of  the trial  Judge the  appellate Court held that the petitioners  were inducted  into the premises after 1960 and, therefore,  were not  entitled to be regarded as lawful sub-tenants.  It   found  that  Saraswatibai  had  become  a statutory tenant  on the  termination of  her tenancy by the notice dated  July 28,  1962, and  the petitioners  were her licensees  and   after  the  decree  for  ejectment  against Saraswatibai on  September 30,  1966 her rights and interest in the  premises came  to an  end and  from  that  date  the licensees were  not entitled  to any  statutory  protection. Accordingly, the appellate Court maintained the dismissal of the suits filed by the petitioners. 715      The petitioners  filed writ petitions under Article 227 of the  Constitution before  the High  Court, and  the  High Court after  hearing the  parties rejected  the petitions by its order  dated July  15, 1981. These petitions for special leave to appeal are directed against that order.      Mr. Soli  Sorabjee, appearing  for  the  petitioner  in S.L.P. No.  5631 of  1981, contends that the petitioner must be regarded  as a licensee entitled to the benefit of sub-s. (2) of  s. 14  read with sub-s. (1) of s. 15-A of the Bombay Rents, Hotel  and Lodging  House Rates Control Act, 1947. He urges that  in virtue  of the  definition of  "licensee" set forth in  sub-s. (4A)  of s. 5 of the Act, that is to say, a person  who  is  in  occupation  of  the  premises  under  a subsisting agreement  for licence,  the petitioner,  must be regarded as  a licensee  in occupation  on February 1, 1973, and therefore  a tenant  falling within  the terms of sub-s. (1)  of   s.  15-A.  On  that,  learned  counsel  says,  the petitioner must  be deemed, pursuant to sub-s. (2) of s. 14, to be a tenant of the landlord, the first respondent, on the terms and  conditions of the agreement. Now, there can be no doubt that if the petitioner can be said to be a licensee in occupation on February 1, 1973 he is entitled to assert that he has  become a  tenant of  the landlord. But a licensee is one who  is in  occupation under  a subsisting agreement for licence. The agreement for licence must be subsisting on the

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date on  which he  claims to  be a  licensee. In the instant case, in order to establish his claim the petitioner must be in occupation  on February  1, 1973  under an  agreement for licence subsisting on that date.      In our  opinion, the  petitioner is not entitled to the benefit claimed by him. An agreement for licence can subsist and continue  to take  effect only  so long  as the licensor continues to  enjoy  a  right,  title  or  interest  in  the premises. On the termination of his right, title or interest in the  premises, the agreement for licence comes to an end. If the  licensor is  a tenant,  the  agreement  for  licence terminates  with   the  tenancy.  No  tenant  is  ordinarily competent to grant a licence enduring beyond his tenancy. On the termination  of  the  licensor’s  tenancy  the  licensee ceases to  be a  licensee. This  loss of status is the point from which  sub-s. (2)  of s.  14 begins  to operate  and in consequence of its operation, the erstwhile licensee becomes a tenant  of the landlord on the terms and conditions of the agreement.      What have we here ? Saraswatibai ceased to be tenant of any  description   long  before   February  1,   1973.   The contractual tenancy 716 came to  an end  when the notice to quit dated July 28, 1962 took effect  and the  statutory tenancy  terminated when the decree for  ejectment was passed thereafter. Before February 1, 1973  she had  ceased to  be a  tenant.  With  that,  the agreement for  licence stood  automatically  terminated.  In consequence, the  petitioner cannot legitimately claim to be a licensee on February 1, 1973.      Mr. Sorabjee  relies on  Madhusudan A.  Mahale v.  P.M. Gidh and  others, but  we are  unable to see any support for the petitioner in the judgment in that case.      In our  judgment, Special  Leave Petition  No. 5631  of 1981 must fail.      Mr. D.V. Patel, appearing for the petitioner in Special Leave Petition  No.  5632  of  1981,  points  out  that  the petitioner had  been in  occupation of  the entire flat as a sub-tenant since  1943  and  that  in  1960  he  had  merely restricted his  occupation to the portion presently occupied by him.  It must be taken, he contends, that he was a lawful sub-tenant since  1943, and  therefore, by  virtue of sub-s. (1) of  s. 14  of the Act he must be regarded as a tenant of the landlord on the determination of Saraswatibai’s tenancy. The contention  has no  force. The  courts below  have found that the  occupation  of  the  petitioner  in  the  premises presently in  his possession  must be treated as dating back to 1962  and not earlier. That being so, the benefit of sub- s. (1)  of s.  14 cannot be available to the petitioner. The benefit can  be claimed by a sub-tenant to whom the premises have been  lawfully sub-let  before the  commencement of the Bombay  Rents,   Hotel  and   Lodging  House  Rates  Control (Amendment) ordinance,  1959. In  as much as the sub-tenancy of the petitioner in the premises has been found to commence from 1962,  we must  hold that  this petitioner  also has no right to continue in possession. This Special Leave Petition must also be rejected.      As regards the remaining special leave petitions, it is admitted that  they must  be disposed of on the same footing as Special Leave . Petition (Civil) No. 5631 of 1981.      In  the   result  these  special  leave  petitions  are dismissed.      Learned counsel  for  the  petitioners  pray  that  the petitioners may  be allowed  to continue in possession for a period of eighteen

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717 months  in   view  of   the  great  difficulty  in  securing alternative accommodation in Bombay. They point out that the landlord, the first respondent, had agreed in the High Court to grant  that period  to the petitioners but subject to the condition that  the petitioners  did not  move this Court in appeal. Having  regard to  the circumstances of the case, it appears to  us appropriate  to direct  that the  petitioners shall not  be dispossessed  from the  accommodation in their possession upto September 30, 1982, provided they furnish an undertaking with  the Registrar  of this  Court  within  one month from today:      (a)  that they  will  hand  over  peaceful  and  vacant           possession of  the said  premises to the landlord,           the first  respondent, on  or before September 30,           1982.      (b)  that they  shall continue  to  pay  to  the  first           respondent by  the 7th day of each month an amount           on account  of  the  use  and  occupation  of  the           premises equal  to the monthly amount paid by them           to the  licensor Saraswatibai  under the agreement           for licence,      (c)  that they  will deposit  within three  months from           today  in   the  court  executing  the  decree  in           Ejectment Suit  No. 576/5157  of 1962  all arrears           calculated in  accordance with  the condition  (b)           mentioned above for the period commencing with the           date of the decree in that suit, and      (d)  that they  shall not  induct in  the said premises           any  other   person  as  sub-lessee,  licensee  or           otherwise. N. V. K.                                Petitions dismissed, 718