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PETITIONER: M/S.  A. C. ESTATES

       Vs.

RESPONDENT: M/S.  SERAJUDDIN & CO.  AND ANOTHER

DATE OF JUDGMENT: 07/05/1965

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. SHAH, J.C. MUDHOLKAR, J.R.

CITATION:  1966 AIR  935            1966 SCR  (1) 235

ACT: West  Bengal  Premises Tenancy Act (12 of 1956),  s.  16(3)- Scope of.

HEADNOTE: The  appellant, the owner of certain premises  in  Calcutta, leased  them out and the respondent was inducted as  a  sub- tenant  by  the  tenant in June 1954.  In  July.  1954,  the appellant  issued  notice  to  the  tenant  determining  the tenancy from the end of August 1954.  In September 1954, the appellant  filed a suit for ejectment of the tenant.   While the suit was pending, the West Bengal Premises Tenancy  Act, 1956,  came into force on 31st March 1956.   The  respondent filed a petition under s. 16(3) of the Act, praying that the Controller  may declare that the interest of the tenant  had ceased, that the respondent had become a direct tenant under the  appellant and for fixation of the rent.  On 9th  August 1956, the Controller made an order declaring the  respondent as  a  direct  tenant  and  adjourned  the  proceedings  for evidence  regarding the rent payable.  On 22nd August  1956, the ejectment suit was decreed and so, the appellant applied to  the  Controller praying that the  respondent’s  petition under  s. 16(3) may be dismissed.  The Controller  dismissed the   respondent’s   application  on  the  day   fixed   for determining the rent.  The respondent’s appeal to the  Court of  Small  Causes was allowed.  The appellant then  filed  a petition  under  Art. 227 of the Constitution  to  the  High Court, and it was dismissed except as to fixation of rent. In his appeal to this Court, the appellant contended that  : (i)  the order of 9th August 1956 was not a final order  and therefore  the  Controller could rescind it,  and  (ii)  the respondent was no, entitled to invoke s.     16(3),  because the tenant had been ejected on 22nd August 1956. HELD  :  (i) The High Court was right in  holding  that  the Controller had no power to set aside the order that had been made on 9th August 1956, for it was right when it was  made. [242 C-D] The  word  "tenant"  is defined in s. 2(h)  of  the  Act  to include  any  person  continuing  in  possession  after  the termination of his tenancy, but shall not include any person against whom any decree or order for eviction had been  made

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by  a  court of competent jurisdiction.   There  is  nothing repugnant in the subject or context of s. 16(3) to take  the view  that the definition of "tenant" in s. 2(h)  would  not apply  to  a  case under s. 16(3).   Therefore,  the  tenant continued  to  be a tenant up to 22nd August 1956,  and  the respondent, who became a sub-tenant in June 1954,  continued :to  be sub-tenant after the coming into force of  the  Act. [240 E-G] Under  the  first part of s. 16(3), the  Controller  has  to declare by order that the tenant’s interest in the  premises sub-let  has  ceased and that the sub-tenant  has  become  a direct tenant under the landlord; and under the second part, the Controller has to fix the rents payable to the landlord, by the tenant and the sub-tenant. [240 1-1-241 B] In  the  instant case after having made such  a  declaration under  the  first  part of the section,  in  favour  of  the respondent, it was not open sup./65-16 236 to  the Controller (while proceeding to fix rent  under  the second part) to rescind the order which had become final  so far  as the Controller was concerned, on some  ground  which supervened  after  the  date  of  the  order  nor  can   the Controller’s latter order be justified under s. 29(5) of the Act, which gives the Controller the powers under ss. 151 and 152  and  the  power of review under O.  47,  of  the  Civil Procedure Code. [241 G-H; 242 B-C] (ii)There  is  nothing in the contention of  the  appellant that s. 16(3) would not apply to the respondent. [242 E] In the present case, the benefit of the section was given to the  respondent not after 22nd August 1956, when the  tenant was  evicted, but before that date, that is, on  9th  August 1956.   That order so far as it went was final and  was  not open  to  review or cancellation by the Controller  who  had thereafter only to fix the rent under the second part of the section. [242 E-F]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 258 of 1963. Appeal  by special leave from the judgment and  order  dated May  6,  1960 of the Calcutta High Court in Civil  Rule  No. 3579 of 1959. S.   C. Mazumdar, for the appellant. D.   N. Mukherjee, for the respondent No. 1. The Judgment of the Court was delivered by Wanchoo,  J. This is an appeal by special leave against  the judgment  of the High Court of Calcutta.  The  appellant  is the  owner  of premises bearing No. P-16,  Bentinck  Street, Calcutta.  It had let out a suite on the second floor of the premises on a monthly rental of Rs. 66 to Gee Tsing Po.  The exact date when the suite was let to Po is not on the record but it was sometime before June 1954.  In June 1954, Po sub- let   the  entire  suite  to  respondent  No.   1,   Messrs. Serajuddin and Company, which will hereafter be referred  to as the respondent.  In July 1954, the appellant gave  notice to  Po  terminating his tenancy with the  expiry  of  August 1954.  In September 1954 the appellant filed a suit  against Po  praying for his ejectment on certain grounds  under  the West  Bengal  Premises Rent Control  (Temporary  Provisions) Act,  No. XVII of 1950, which was then in force.  That  suit was still pending when the West Bengal Premises Tenancy Act, No.  XII of 1956 (hereinafter referred to as the  Act)  came into  force from March 31, 1956.  Section 16 (3) of the  Act

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gave certain rights to sub-tenants.  As the appeal turns  on the interpretation of that provision, it is necessary to set it out here:- "16(1)  237 .lm15 (2)Where before the commencement of this Act, the  tenant, with or without the consent of the landlord, has sublet  any premises  either in whole or in part, the tenant  and  every sub-tenant to whom the premises have been sublet shall  give notice to the landlord of such subletting in the  prescribed manner within six months of the commencement of the Act  and shall  in  the prescribed manner notify the  termination  of such sub-tenancy within one month of such termination. (3)  Where in any case mentioned in sub-section (2)    there is  no consent in writing of the landlord and  the  landlord denies  that he gave oral consent, the Controller shall,  on an  application  made to him in this behalf  either  by  the landlord or the sub-tenant within two months of the date  of the receipt of the notice of sub-letting by the landlord  or the  issue of the notice by the sub-tenant, as the case  may be,  by order declare that the tenant’s interest in so  much of the premises as has been sub-let shall cease and that the subtenant shall become a tenant directly under the  landlord from the date of the order.  "The Controller shall also  fix the  rents payable by the tenant and such sub-tenant to  the landlord  from date of the order.  Rents so fixed  shall  be deemed to be fair rent for purposes of this Act." The respondent took action under s. 16(3) as apparently  the sub-letting  to  him by Po was not with the consent  of  the landlord,   and  made  an  application  thereunder  to   the Controller  on June 4, 1956 and prayed that  the  Controller should  declare that the interest of the tenant  had  ceased and the respondent had become the tenant directly under  the landlord  in respect of the suite in question.  It was  also prayed that fair rent of the premises should be fixed at Rs. 66 per mensem. The  application was opposed on behalf of the appellant  and two  main points were urged in that connection,  namely,-(i) The tenancy of Po had been lawfully terminated at the end of August  1954 and the suit for his ejectment was  pending  in the Small Cause Court and therefore the respondent could not take  advantage  of the Act in 1956, for it never  became  a sub-tenant  in law before the Act was passed; and  (ii)  the respondent  was  not in fact the tenant of  Po  from  before March 31, 1956. The matter came up before the Controller on August 9,  1956. The  Controller accepted the respondent’s case that  it  had become 238 the  sub-tenant  of  Po  in fact from  June  9,  1954.   The Controller  further  held  that in view of  this  fact,  the respondent  became a sub-tenant under the appellant in  law, for  in any case, the tenancy of Po had not been  determined till  August  1954  even  on the case  put  forward  by  the appellant.  He therefore made the following order :-               "The  applicant  (i.e. Serrajuddin &  Co.)  is               therefore  entitled  to be declared  to  be  a               direct  tenant under the O.P. No. 1. But  this               will  not  be  sufficient to  dispose  of  the               present  proceeding inasmuch as under  section               16(3) of the Act of 1956 I am to fix the  fair               rent  payable  by the tenant and that  of  the               sub-tenant." He  thereupon directed the Inspector to go to  the  locality

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and  measure the accommodation of the disputed premises  and other similar premises in the neighborhood as might be shown by either or both parties.  The Inspector was also  directed to make note of advantages and amenities of all the premises measured  by him and thereafter submit his report as to  the fixation of fair rent.  A date was fixed for the  submission of  the Inspector’s report and thereafter the fair rent  was to be fixed. Before however the Inspector’s report was received, the suit for ejectment of Po pending in the Court of Small Causes was decreed  on  August 22, 1956 and time was given  to  him  to vacate  the same by the end of October 1956.   Therefore  on September  11, 1956, the appellant filed what it  called  an additional written objection. in that the appellant informed the  Controller that a decree for ejectment against  Po  had been  passed.  It was urged that in view of that decree,  Po was  no longer a tenant of the appellant and  therefore  the respondent could not be a sub-tenant.  The appellant  prayed that the application of the respondent was not maintainable, in the circumstances and the Controller had no  jurisdiction to  entertain the application and so the application  should be dismissed.  The matter then came up before the Controller on  January 29, 1957. on. which date the  appellant’s  addi- tional objection as well as the Inspector’s report was taken up for consideration.  The Controller took some evidence  on the  question of fair rent and heard arguments on that  day. On February 11, 1957, the Controller passed final orders  in which  he said that there was no tenant of the first  degree on that date, namely, 11th February 1957.  As the  ejectment decree had been passed in accordance with the provisions  of the  1950-Act, the sub-tenant had by operation of  that  law become a direct tenant.  239 So  according  to  the Controller there  was  no  subsisting tenancy  on February 1 1, 1957 and no order could be  passed under  s. 16 (3) of the Act.  He consequently dismissed  the application under s.     16(3),  but passed no order  as  to costs. The  respondent  then went in appeal to the Court  of  Small Causes, Calcutta, as provided in the Act.  The Appeal  Court held that the order of August 9, 1956 made by the Controller was final and further as the entire premises had been sublet there was no necessity for any further determination of rent as the sub-tenant would be liable to pay the rent payable by the tenant.  The Appeal Court therefore set aside the  order of   the  Controller  dismissing  the  application  of   the respondent and declared the respondent as tenant at a rental of Rs. 66 per month. The   appellant   then  applied  under  Art.  227   of   the Constitution  to  the High Court and two  main  points  were urged on its behalf before the High Court, namely-               (i)   The  order of August 9, 1956 was  not  a               final  order for the purpose of s.  16(3)  and               therefore  it  was open to the  Controller  to               rescind  that order when the further  fact  of               the  ejectment decree of August 22,  1956  was               brought to his notice;               (ii)Section  16(3)  applies  only  when  the               original tenancy also subsists up to the  date               of  the final order which the  Controller  was               proposing  to  make on January  29,  1957  and               which he eventually refused to make because by               that date the tenancy of Po had come to an end               by the ejectment decree of August 22, 1956. The  High Court held that s. 16(3) was in two parts :  first

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relating to the declaration of the sub-tenant as a tenant in place of the tenant of the first degree, and second relating to  the fixation of fair rent for the part or whole  of  the premises  in respect of which the declaration was made.   It further  held that the declaration of August 9,  1956  under the first part of s. 16(3) was final and the Controller  had no  jurisdiction  after August 9, 1956 to rescind  it.   The High  Court pointed out that as on August 9, 1956, when  the order  under  the  first part of s. 16(3)  was  passed,  the tenancy  of the tenant of the first degree  was  subsisting, action  could  be  taken under s. 16(3)  in  favour  of  the respondent.   In  this  view of  the  matter,  the  revision application of the appellant 240 was dismissed except as to the fixation of rent.  It is this order of the High Court which is being impugned before us by special leave. We  are  of opinion that the appeal must fail.  There  is  a clear  finding  of the Controller that  the  respondent  was inducted as a sub-tenant by Po in June 1954.  At that  time, the  appellant had not even given notice to  Po  determining his tenancy.  It was only in July 1954 that notice was given to  Po  determining the tenancy as from the  end  of  August 1954.  Therefore, the respondent became a sub-tenant of  the tenancy which Po held under the appellant. The next question is whether the respondent was entitled  to the  benefit of the Act which came into force on  March  31, 1956.   On that date a suit was pending against Po based  on the  notice  given  to  him in  July  1954  determining  his tenancy.  The argument on behalf of the appellant is that as Po’s  tenancy had been determined by the end of August  1954 by  virtue of the notice referred to above,  the  respondent was no longer sub-tenant on March 31, 1956 as the tenancy of the  tenant of the first degree had itself come to  an  end. This  in our opinion is not correct.  The word  "tenant"  is defined  in  S.  2(h)  of the  Act  to  include  any  person continuing  in possession after the termination of his  ten- ancy  but  shall  not include any person  against  whom  any decree  or  order for eviction had been made by a  court  of competent   jurisdiction.    In  view  of   this   inclusive definition of the word "tenant’ in the Act Po would continue to  be  a tenant under the Act though his tenancy  had  been determined  by notice and he ceased to be a tenant  only  on August  22,  1956 when the decree for ejectment  was  passed against  him.  It is true that the definitions in s.  2  are subject  to  anything  being repugnant  in  the  subject  or context.   But  we see nothing repugnant in the  subject  or context  of  s.  16(3)  to persuade  us  to  hold  that  the definition  of tenant in S. 2(h) would not apply to  a  case under S. 16(3).  The Act is a measure for the protection  of tenants and sub-tenants and should not be so interpreted  as to  take  away the protection which it intends  to  give  to them.  We are therefore of opinion that Po continued to be a tenant  up to August 22, 1956 and therefore  the  respondent continued to be a sub-tenant after the coming into force  of the Act. This  takes  us  to the order of August 9,  1956.   We  have already  set  out  s. 16(3) and there is no  doubt  that  it consists of two parts.  Under the first part, the Controller has  to  declare by order that the tenant’s interest  in  so much of the premises as has                             241 been  sublet  has  ceased and the sub-tenant  has  become  a tenant  directly  under the landlord from the  date  of  the order.  The second part gives power to the Controller to fix

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rents  payable  by  the tenant and such  sub-tenant  to  the landlord  from the date of the order.  It may be  that  both orders  under the two parts may be passed on the same  date; but  it appears what usually happens is that the  Controller first declares that the tenant’s interest has ceased and the sub-tenant has become a tenant directly under the  landlord, and  thereafter proceeds to fix rent under the  second  part after   taking  such  further  evidence  as   he   considers necessary.   Even  so,  the  order  under  the  first   part declaring that the tenant’s interest has ceased and the sub- tenant has become a tenant directly under the landlord  must be  treated as final so far as the Controller  is  concerned and it cannot be a mere interlocutory order, which could  be rescinded by the Controller while he is taking steps to  fix the  rent  as provided in the second part of s.  16(3).   In this  connection our attention is drawn to the  decision  of the  Calcutta  High Court in Anil Kumar Mukherjee  v.  Malin Kumar Mazumdar(1), where it was held with reference to S. 29 of the Act that the words "final order" there mean the order making the declaration and fixing the rent under s. 16(3) or the order dismissing the application under s. 16(3).  We  do not   propose  to  consider  whether  Mukherjee’s  case   is correctly decided.  Assuming it to be correct, what it  lays down inter alia is that an order under the first part of  s. 16(3) merely making a declaration without the further  order fixing rent under the second part thereof is not  appealable as  a  final order under S. 29.  But what we  are  concerned with here is whether it was open to the Controller after  he had made the order declaring the sub-tenant a direct  tenant under  the  landlord to set aside  that  order  subsequently while proceeding to fix rent on the basis of something which transpired  after  that order had been passed.   We  are  of opinion  that an order like that passed on August  9,  1956, must be taken to be final insofar as it declares the tenancy of  the  tenant  of  the first degree  to  have  ceased  and declares  the  sub-tenant  to be the direct  tenant  of  the landlord,  so  far as the Controller  is  concerned.   After having  made  such  a  declaration it is  not  open  to  the Controller  (while proceeding to fix rent under  the  second part of that section) on some ground which supervenes  after the date of the order to rescind it.  Our attention in  this connection is drawn to S. 29(5) of the Act which gives power to  the  Controller to review his orders on  the  conditions laid down under Order XLVII of the Code of Civil  Procedure. But this cannot be a case of review on the (1)  (1959-60) 64 C.W.N. 938. 242 ground  of discovery of new and important matter,  for  such matter has to be something which existed at the date of  the order and there can be no review of an order which was right when made on the ground of the happening of some  subsequent event  (see  Rajah  Kotagiri Venkata Subbamma  Rao  v.  Raja Vallanki  Venkatrama Rao(1).  Section 29 (5)  further  gives power to the Controller to act under s. 151 or S. 152 of the Code of Civil Procedure.  Section 152 has no application  in the  present case for there is no clerical  or  arithmetical mistake  here.   Nor can the Controller in our  opinion  set aside  an order which was right when it was made,  under  s. 151  of the Code of Civil Procedure as there is no  question in  such circumstances of subserving the ends of justice  or preventing  the abuse of the process of the court.   We  are therefore of opinion that the Controller had no power to set aside the order that had been made on August 9, 1956 for  it was  right  when it was made.  The view taken  by  the  High Court in this connection is correct.

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It  is  equally clear that when the  Controller  passed  the order on February 11, 1957 dismissing the application  under S.  16(3) that order was appealable under S. 29(1),  for  it was undoubtedly a final order within the meaning of s. 29(1) and the respondent would be entitled to appeal therefrom. Finally there is nothing in the contention of the  appellant that  s. 16(3) would not apply because the tenant  had  been ejected  on  August 22, 1956 and thereafter  the  sub-tenant could  not  claim the benefit of S. 16(3).  In  the  present case the benefit of s. 16(3) was given to the sub-tenant not after August 22, 1956 but before that date i.e. on August 9, 1956.   That order so far as it went was final and  was  not open  to  review or cancellation by the Controller  who  had thereafter only to fix the rent under the second part of  s. 16(3).   While going on with the proceeding for fixation  of rent,  the Controller could not set aside the order  already made under the first part of S. 16(3) on August 9, 1956  and insofar  as he did so, he acted without  jurisdiction.   The Appeal Court was therefore right in setting aside the  order of  the Controller and the High Court was equally  right  in dismissing  the  application by the appellant except  as  to fixation of rent. The  appeal  therefore fails and is  hereby  dismissed  with costs.                      Appeal dismissed. (1) L.R. (1899-1900) 27 I.A. 197. 243