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PETITIONER: SHALIMAR TAR PRODUCTS LTD.

       Vs.

RESPONDENT: H.C. SHARMA & ORS.

DATE OF JUDGMENT12/11/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) OZA, G.L. (J)

CITATION:  1988 AIR  145            1988 SCR  (1)1023  1988 SCC  (1)  70        JT 1987 (4)   440  1987 SCALE  (2)1114  CITATOR INFO :  RF         1989 SC1141  (16)  R          1989 SC1806  (9)  R          1989 SC1819  (10)  RF         1991 SC1055  (5)  RF         1991 SC2053  (16)

ACT:      Delhi Rent  Control Act,  1958: Sections  14(1) proviso (b), 16(2) and (3)-Tenant-Eviction on ground of sub letting- consent to  sub letting should be in writing-Mere permission or acquiecence  would not do-Waiver of this statutory right- Not permissible.

HEADNOTE: %      The  respondent-landlord   sought   eviction   of   the appellant-tenant on  the ground  of having  sub-let  without written consent  the portion  in his occupation in favour of M/s. R.C.  Abrol &  Co. The  appellant resisted the petition for eviction, contending that it was not maintainable in the absence of  a notice  to quit while determining the tenancy, that there  was no  sub-letting or  parting of possession by the appellant in favour of M/s. R.C. Abrol & Co., in view of Clause 14  of the Lease agreement, which provided: "That the lessee undertakes  not to  sub-let the premises to any other party without  the written permission of the lessor and that the lessee’s  contractors M/s.R.C.  Abrol and Co. will share the premises  with the  permission of  the lessor". The Rent Control Tribunal  ordered eviction  of the  appellant on the ground of sub-letting.      The High  Court dismissed  the  Second  Appeal  of  the appellant and  confirmed the  decision of  the Rent  Control Tribunal ordering eviction.      In the  appeal to  this Court  by special  leave it was contended for  the appellant,  that there was no sub-letting or parting  of possession  by the appellant-tenant in favour of M/s.  R.C. Abrol  & Co.  (P) Ltd.,  and that if there was sub-letting that  had been  made with the written consent of the landlord.      Dismissing the Appeal, ^

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    HELD: 1.  Sections 14(1)  proviso (b), 16(2) and (3) of the Delhi  Rent Control  Act, 1958  require  the  tenant  to obtain consent of the landlord in writing for sub-letting of the premises.  The purpose  of such written consent was that it would  cut out litigation on this ground. Mere permission or acquiescence  would not  do. The  consent must  be to the specific sub-letting  and must  be in  writing. There  is no implied permission. [1026A, 1028D] 1024      South Asia  Industries Private Ltd. v. S. Sarup Singh & others, A.I.R. 1966 S.C. 346,referred to.      Raja Ram  Goyal v.  Ashok Kumar  and others,[1975]  All India Rent  Control Journal  534; Kartar Singh v. Shri Vijay Kumar and Another, [1878] All India Rent Control Journal 264 and M/s.  Delhi Vanaspati  Syndicate, Delhi  v. Bhagwan Dass Faquir Chand, A.I.R. 1972 Delhi 17,approved.      2. Everyone  has a right to waive and to agree to waive the advantage  of a  law made  solely for  the  benefit  and protection of  the individual  in his  individual  capacity. Waiver is  a question  of fact  which has  to be  decided by facts and evidence. [1029C]      Chaplin v.  Smith, [1926)  1 King’s Bench Division 198, referred to.      In the  instant case,  there was no question of waiver. There was  no conscious  relinquishment of  the advantage of any statute.  No Court  has gone into this fact. It does not seem to  have been urged before the High Court also. As this requirement of  the statute  is in the public interest there cannot be  any question  of waiver  of a right, dealing with the rights of the tenants or the landlord. [1029D]      3. To  constitute sub-letting  there must be parting of the legal  possession. Parting of the legal possession means possession with  the rights to include and also the right to exclude others. This is a question offact. [1032B]      Mehta Jagjivan  Vanechand v.  Doshi  Vanechand,  A.I.R. 1972 Gujarat 6, referred to.      In the  instant case, exclusive possession was given to the  sublessee,   R.C.  Abrol  &  Co.  and  the  tenant  has transferred the  right to  possess in  that portion.  It  is clear that  the sub-letting  was done  wihout the consent in writing of  the landlord. There was, therefore an inevitable breach of  the covenant.  The High Court was therefore right in upholding  the order  of the  Rent Control  Tribunal  and directing eviction of the appellant. [1032G-1033A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1425 of 1973.      From the  Judgment and  Order dated  21.9.1973  of  the Delhi High 1025 Court in S.A.O. No. 294 of 1972.      Dr. Shankar Ghosh and Rathin Das for the Appellant.      A.B. Rohtagi,  Soli J.  Sorabjee, Mrs.  R. Swami,  A.K. Verma and Ms. S. Sethna for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI  J. This  is an  appeal by  special leave directed  against the  judgment and  order of the High Court of  Delhi dated  the 21st  September, 1973  in  Second Appeal No.  294/72. The  High  Court  dismissed  the  Second Appeal of  the appellant  and confirmed  the decision of the Rent Control  Tribunal and ordered eviction. Before the High Court three contentions were urged namely:-

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    1.   The petition  for eviction was not maintainable in           the absence  of a notice to quit while determining           the tenancy,      2.   There was  no sub-letting or parting of possession           by the  appellant-tenant in favour of R.C. Abrol &           Company Pvt. Ltd.,                                and      3.   If there  was such  sub-letting, it  had been made           with the  written consent  of the  landlord so was           not actionable.      The  Rent   Control  Tribunal  confirmed  the  findings against the  appellant in  all the three contentions and the High Court  also affirmed  the findings  of the Rent Control Tribunal. We  must note that no contention was raised before us as  far as point No. 1, namely notice was not served. The only contention  before us was that there was no sub-letting or parting  of the  possession by  the  appellant-tenant  in favour of R.C. Abrol & Company Pvt. Ltd. and secondly it was urged that  if there was sub-letting that had been made with the written  consent of  the landlord.  The Clause 14 of the lease deed  in the  instant case which provides, inter alia, the terms and conditions is as follows:-           "Clause 14-That  the lessee undertakes not to sub-           let the  premises to  any other  party without the           written permission  of the  lessor, and  that  the           lessee’s contractors  M/s R.C.  Abrol &  Co.  will           share the  premises with  the  permission  of  the           lessor." 1026      This is  in consonance  also with provisions of Section 14(1)(b) of  the Delhi  Rent Control  Act, 1958 (hereinafter called the  Act) and  Sub-Sections (2) and (3) of Section 16 of the  said Act.  The first question, therefore, is whether there was  any sub-letting  and secondly  if so was the same with the  consent in  writing of  the  landlord.  All  these questions are  essentially questions  of facts and were held against the appellant by the Rent Control Tribunal which was the final  Court of facts, applying the correct propositions of law. This conclusion has been affirmed by the High Court. Before us  it was pointed out by Sree Shankar Ghosh, learned counsel for  the appellant,  that it  was not necessary that the consent  to sub-letting should be in writing and what he contended was  that it was necessary to have the consent and the manner  of proving  consent was  provided in writing. In other words,  he contended that the provision which required that the consent should be in writing meant it was mandatory so far as it enjoined consent but it was directory so far as it said  that such  consent should be in writing. Apart from the statute  in this  case, we  find it  difficult to accept this argument  in view of the specific clause in the statute hereinbefore. In  South Asia  Industries Private  Ltd. v. S. Sarup Singh  and others,  A.I.R. 1966 S.C. 346. Justice A.K. Sarkar as  the learned Chief Justice then was, observed that the object  of interpreting  a statute  was to ascertain the intention  of   the   legislature   in   enacting   it.   An interpretation  defeating   the  object  of  a  statute  is, therefore, not permissible.      In paragraph 11 of the judgment at page 350 the learned Judge observed as follows:-           "I notice  that the lease gave no express right to           the lessee  to assign  with or without the consent           of the  lessor. The lessee no doubt had that right           under the Transfer of Property Act. It may be that           under the  clause the  lessee’s assignee  would be           included in the expression "lessee" as used in the

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         lease; that  is the  entire effect  of the clause.           But this  would  be  so  whether  the  lessor  had           consented to the assignment or not. therefore this           clause does  not lead  to the  conclusion that the           lessor had  consented to  the assignment. It is of           no assistance  in the  present  case.  I  am  also           inclined to the view that the consent contemplated           by Section  14(1) proviso  (b) is a direct consent           to  a  contemplated  assignment  to  a  particular           assignee.  See   Regional   Properties   Ltd.   v.           Frankenschwerth, [1951]  1 All ER 178. Clearly the           clause in  the case  relied upon  could not  be  a           consent of this kind." 1027      It is true that Justice R.S. Bachawat had expressed the view that the consent could be general or special but in the case before the Court there was no conduct which showed that there was  consent by the general words of the clause in the deed. We  are of  the opinion  on reading  of the  different provisions that  the consent enjoined by bargain between the parties in  this case  must be in writing and must be to the specific sub-letting.      That was  the view  of the Delhi High Court in Raja Ram Goyal v.  Ashok Kumar  and others,  [1975]  All  India  Rent Control Journal 534. In Kartar Singh v. Shri Vijay Kumar and Another, [1978]  All India  Rent Conrol Journal 264 the High Court of  Punjab &  Haryana has also expressed similar view. In the  case of  M/s Delhi Vanaspati Syndicate, Delhi v. M/s Bhagwan Dass  Faqir Chand,  (A.I.R. 1972  Delhi 17)  Khanna, C.J. as he then was of the Delhi High Court observed at page 19 of the report:           "Section 16  of the  Act of  1958 holds the key to           the interpretation  of provisions of Clause (b) of           sub-section (1)  of Section 14 of this Act as well           as of Clause (b) of subsection (1) of S. 13 of the           Act of  1952. It  deals with  restrictions on sub-           letting. Sub-section  (1) of section 16 makes sub-           letting lawful  though it  was without the consent           of the  landlord provided that the sub-letting has           taken place  before 9th  day of June, 1952 and the           sub-tenant is in occupation of the premises at the           time when  the Act  of 1958  came into force. Sub-           section  (2)   of  section   16   reiterates   the           provisions of  Clause (b)  of sub-section  (1)  of           Section 13  of the  Act of 1952 and lays down that           the  sub-letting  after  9th  day  of  June,  1952           without obtaining  the consent  in writing  of the           landlord shall  not be  deemed to  the lawful.  It           does not  say that the requisite consent should be           obtained before  sub-letting the  premises and the           consent obtained  after sub-letting will not enure           for the benefit of the tenant.                However,  sub-section   (3)  of   Section  16           prohibits  subletting   of  the   premises   after           commencement of Act of 1958 without the ’previous’           consent in  writing of  the landlord.  The use  of           word ’Previous’  in this  sub-section  shows  that           where it was the intention of the legislature that           the consent  in writing  should be obtained before           sub-letting, it  said so specifically. The absence           of the  word ’Previous’  in subsection  (2)  shows           that it was not the intention of the legisla- 1028           ture that the consent in writing could be obtained           before sub-letting.  Before  the  Act  of  1952  a

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         tenant could successfully show acquiescence of the           landlord in  sub-letting to  escape forfeiture  of           tenancy. Since  the absence  of consent in writing           by  a   landlord  for  sub-letting  gave  rise  to           unnecessary litigation  between a  landlord and  a           tenant, the  Act of  1952 required  the consent of           the landlord  in writing  after its  commencement.           The purpose  seemed to  be that the consent of the           landlord evidence  by  a  writing  would  cut  out           litigation on  this ground.  After all  a landlord           could always agree to sub-letting either before or           after sub-letting of the premises. For that reason           no condition  was  laid  down  that  such  consent           should  be   obtained   before   sub-letting   the           premises."      We  are   in  agreement   with  this  approach  to  the interpretation  and  it  is  in  consonance  with  the  view expressed by  this Court  earlier as mentioned hereinbefore. In the  aforesaid view  of the  matter we are of the opinion that it  was necessary  for the tenant to obtain the consent in writing  to sub-letting the premises. The mere permission or acquiescence  will not  do. The  consent must  be to  the specific sub-letting  and must  be in  writing. Indeed there was no implied permission also here. Our attention was drawn to the  fact that  the landlord  had written  letter to  the tenant and  the landlord  objected to  the sub-letting,  the moment he realised the situation.      In that  view of  the matter  we  are  clearly  of  the opinion that in this case there was no consent in writing on the part of landlord to such sub-letting.      Dr. Shankar  Ghosh tried  to state  that in view of the fact that  the key  of the  premises was stated to be in the custody of  the tenant, there was no sub-letting. It was the mere user,  it was  urged. It  is difficult  to accept  this contention. The case of sub-letting was accepted as has been found by all the Courts in this case.      Our attention  was drawn to the certain observations on the  question   of   directory/mandatory   nature   of   the requirement that consent should be in writing.      Reliance was  placed on  the observations  of Craies on Statute Law  7th Edition  261 wherein  in the  election case requirement that ballot paper had to be kept in a particular manner was considered to be 1029 directory and  similarly it  was submitted  in this case the requirement of  the consent  to  be  in  writing  should  be construed to  be directory. It was urged that the conduct of the parties  indicated that  there  was  no  breach  of  the covenant. We  are unable  to agree.  Here the  situation  is clearly different.  Here the requirement of consent to be in writing was  to serve  a  public  purpose,  i.e.,  to  avoid dispute as to whether there was consent or not.      Reliance was also placed on the observations of Maxwell in the  Interpretation of  Statutes 12th Edition at page 328 on the question of waiver:      Everyone has a right to waive and to agree to waive the advantage  of   a  law  made  solely  for  the  benefit  and protection of  the individual in his individual capacity. We are, however, in this case unable to agree. Firstly, in this case there  was no  case of  waiver. Waiver is a question of fact which has to be tested by facts and evidence. There was no conscious relinquishment of the advantage of any statute. No Court  has gone  into this fact. It does not seem to have been urged  before the  High Court also. Apart from this, in this requirement  of the  statute which  is  in  the  public

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interest there  cannot be any question of waiver of a right, dealing with  the rights  of the tenants or the landlord. In Chaplin v. Smith, [1926] 1 King’s Bench Division 198, it was held that physical possession was not sufficient, there must be legal possession.      The question  was whether  there  was  any  consent  in writing in this case. We have noticed Clause 14 of the lease deed states  that the lessee will not sublet the premises or any part  to any party without the written permission of the lessor except that the lessee’s Contractors M/s R.C. Abrol & Co. Pvt. Ltd. will share the premises with the permission of the lessor.  So the  permission of  the lessor was there but the purpose  was of  the sharing  with M/s  R.C. Abrol & Co. Pvt. Ltd.  was not  of leasing  the premises  to  any  other entity. For  the purpose  of this,  it is  suffice for us to state that  Clause 14  as enjoined  did give  permission  of leasing the  premises to M/s. R.C. & Co. Pvt. Ltd. which was a different entity.      Dealing with this contention the High Court observed in its judgment  that the  company had  been incorporated  some time in  1957 after the commencement of the tenancy. Company was a  distinct legal  entity. It  appears in this case that the company  was composed of the different persons. The High Court noted that there was never any 1030 consent in  writing  of  the  landlord  to  sub-letting  the premises to  the incorporated  company. The  permission must have been  in writing  and specific  in the words of Justice Sarkar in  South Asia Industries Private Ltd. v. Sarup Singh and others, (Supra).      In the  case  of  Mehta  Jagjivan  Vanechand  v.  Doshi Vanechand, (A.I.R.  1972 Gujarat  6), Justice  Thakkar as he then was of the Gujarat High Court observed at page 8 of the report:           "A similar  question was  raised before the Madras           High Court  in Gundalpalli  Rangamannar Chetty  v.           Desu Rangiah, AIR 1954 Madras 182. A reference was           made to  Jackson v.  Simons, [1923] 1 Ch. 373, and           the distinction  drawn between physical possession           and legal  possession in  that decision  was taken           into account  in rejecting  the contention  of the           landlord  that   there   was   a   subletting   or           assignment. It  has been  observed by  the  Madras           High Court  in paragraph  (5) of the said decision           as under:-           "In ‘Jackson  v. Simons’  [1923] 1  Ch. 373(B) the           question was  whether the  tenant broke  a similar           covenant.  The   defendant  who  was  the  tenant,           without  the   plaintiffs’  consent  or  knowledge           agreed for  the sum  of Ls 7 per week to allow the           proprietor  of  a  night  club  carried  on  in  a           basement beneath the shop to the front part of the           shop between  the hours  of 10.30  P.M. and 2 a.m.           for the  sale of  tickets of admission to the club           Romer J.  held that  the arrangement  conferred to           estate or interest in the demised premises but was           a  mere   privilege  or  licence  to  use  portion           thereof,  the   defendant  retaining   the   legal           possession of  the whole  and  did  not  therefore           constitute  a  breach  of  the  covenants  not  to           assign, underlet or part with the demised premises           or any  part thereof."  The Madras High Court also           relied on  an observation made by Scrutton L.J. in           Chaplin v.  Smith, [1926]  1 KB  198, at  p.  211,           wherein it was observed:

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         "He did  not assign;  nor did  he underlet. He was           constantly on  the premises  himself and  kept the           key of them. He did business of his own as well as           business of the company. In my view he allowed the           company to  use  the  premises  while  he  himself           remained in possession of them." 1031           Reliance was also placed on the Treatise of Foa on           Landlord and  Tenant, 6th  Edn. at page 323, where           the law  on the subject has been summarized in the           following words:           "The  mere  act  of  letting  other  persons  into           possession by  the tenant,  and permitting them to           use the premises for their own purposes, is not so           long as  he retains the legal possesion himself, a           breach of  the covenant."  After  considering  all           these  decisions,   the  High   Court  of   Madras           extracted the following principles and came to the           conclusion that  a mere  taking in of partners did           not amount  to transferring  of possession and did           not constitute  assignment or subletting. Says the           Madras High Court:           "It is  clear from  the aforesaid  decisions  that           there cannot  be a  sub-letting unless  the lessee           parted with  legal possession.  The mere fact that           another is  allowed to  use the premises while the           lessee retains  the legal possession is not enough           to create a sub-lease. Section 105 of the Transfer           of Property  Act  defines  a  lease  of  immovable           property as  to transfer  of right  to enjoy  such           property. Therefore to create a lease or sub-lease           a right  to exclusive  possession and enjoyment of           the property  should be  conferred on  another. In           the present  case the  exclusive possession of the           premises was  not given  to the second respondent.           the first  respondent continued  to be the lessee,           though in regard to the business carried on in the           premises he  had  taken  in  other  partners.  The           partners are not given any exclusive possession of           the  premises   or  a   part  thereof.  The  first           respondent continues  to be  in possession subject           to the  liability to pay rent to his landlord. The           partnership deed  also, as  I have already stated,           does not  confer any such right in the premises on           the other  partners. I,  therefore,  hold  in  the           circumstances of the case the first respondent did           not sublet  the premises to the second respondent,           and therefore he is not liable to be evicted under           the provisions of Act No. 25 of 1949."           The view  taken by me is reinforced by the opinion           expressed  by   the  Madras   High  Court  in  the           aforesaid decision.  A similar  view has also been           taken by  Saurashtra High Court in Karsandas Ramji           v. Karsanji Kalyanji, AIR 1953 Sau. 113 at pp. 114           & 115. In my opinion, it is therefore clear 1032           that there has been no assignment or subletting in           favour of  the partners  of the firm by the tenant           so as  to attract  the Bar  of s.  13(1)(e) of the           Rent Act.  The view  taken by  the lower Courts is           correct and no exception can be taken thereto.      There is no dispute in the legal proposition that there must be  parting of  the legal  possession. Parting  of  the legal possession  means possession with the right to include and also  right to  exclude others. That is, in our opinion,

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is the  matter of fact. In this case, it has been found that there was  a right of possession in favour of the sub-lessee R.C. Abrol & Co. Pvt. Ltd. and right to exclude indeed as it appears from  the narration of the fact that the company has gone into  liquidation and the official liquidator has taken possession of  the premises  on behalf of the liquidator and that must be on the basis that it was the asset belonging to the company.  In that  aforesaid view  of the  matter we are unable to  accept this  proposition that  there was  no sub- letting.      Dr.  Shankar   Ghosh  drew   our   attention   to   the observations of  the High  Court of  Delhi in  the following three cases:      Vishwa Nath  and Anr.  v. Chaman  Lal Khanna  & Others, [1975] All India Rent Control Journal 514.      Shri Gurdial  Singh v.  Shri  Brij  Kishore  &  Others, [1970] Delhi Law Times 592.      M/s  Reliable  Finance  Corporation  (P)  Ltd.  v.  M/s Clearing House and Agencies Private Ltd & Ors. [1984] 2 Rent Control Reporter 449.      Madras Bangalore  Transport Co.  (West) v.  Inder Singh and Others, [1986] 3 S.C.C. 62.      He  contended  that  in  the  light  of  the  aforesaid authorities in  this case,  there was  no parting  of  legal possession in  favour of  the sublessee.  We are  unable  to accept  this   position.  In  the  instant  case,  exclusive possession was  given to  the sub-lessee  and the tenant had transferred the  right to  possess in  that portion.  It  is clear that  subletting  was  done  without  the  consent  in writing of the landlord. If that is so, there was inevitably breach of the covenant.      In that  view of the matter the High Court was right in upholding 1033 the  order  of  the  Rent  Control  Tribunal  and  directing eviction of  the appellant. The appeal, therefore, must fail and is accordingly dismissed.      In view  of the  fact that  the appellant  has been  in possession of  the premises  for quite some time and to make its arrangements  for shifting  we  direct  the  decree  for eviction shall not be executed before 30.6.1988 provided the appellant files  the usual  undertaking in this Court within four weeks  from today.  Mesne profits  will be payable from 1st  of  December  1987  @  Rs.7,000  per  month  until  the possession is delivered.      1.  That  the  appellant  will  hand  over  vacant  and peaceful possession of the premises to the respondents on or before 30.6.1988 from today.      2. That  the  appellant  will  pay  to  the  respondent arrears of rent, if any, within one month from today.      3. That  the appellant  will pay  to respondent further compensation for use and occupation of the premises month by month before 10th of every month.      4. That  the appellant will not induct any other person in the premises.      The Court further directs that in default of compliance with  any  one  or  more  of  these  conditions  or  if  the undertaking is  not filed  as required within the stipulated time, the decree shall become executable forthwith. N.V.K.                                     Appeal dismissed. 1034