Case: M/S.Shree Chamundi Mopeds Ltd Vs. Church Of South India Trust Asson

decree against a lessee. In that sense, it can be said that the leasehold interest of a company is its property. But the question is whether the same is true in respect of the interest of a company which is in occupation of the premises as statutory tenant by virtue of the protection conferred by the relevant rent law because in the instant case on the date of reference to the Board the proceedings for eviction of the appellant company were pending and the appellant company was in occupation of the premises only as a statutory tenant governed by the provisions of the Karnataka Rent Control Act. In Smt. Gian Devi Anand v. Jeevan Kumar, 1985 Supp (1) SCR 1, this Court has laid down that the termination of a contractual tenancy does not bring about a change in the status and legal position of the tenant .unless there are contrary provisions in the relevant Rent Act and the tenant, notwithstanding the termination of tenancy, does enjoy an estate or interest in the tenanted premises. It is further laid down that this interest or estate which the tenant continues to enjoy despite termination of the contractual tenancy creates a heritable interest in the absence of any provision to the contrary. This Court has also held that the legislature which by the Rent Act seeks to confer the benefit on the tenants and to afford protection against eviction, is perfectly competent to make appropriate provision regulating the nature of protection and the manner and extent of enjoyment of such tenancy rights after the termination of contractual tenancy of the tenant including the rights and the nature of protection of the heirs on the death of the tenant.14. In the instant case, we are concerned with the right of the tenant as governed by the Karnataka Rent Control Act. In Cl. (r) of S. 3, the expression "tenant" has been defined to include "the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants family after the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour". In view of Cl. (5) of the proviso to sub-sec. (1) of S. 21, protection against eviction is not available to a tenant who has "unlawfully sublet the whole or part of the premises or assigned or transferred in any other manner his interest therein and where the subletting, assignment or transfer has been made before the coming into operation of this part (except in respect of sub-letting, assignment or transfer to which the provisions of S. 61 are applicable), such sub-letting, assignment or transfer has been made contrary to any provision of law then in force. S. 23 prohibits subletting or transfer by the tenant and provides as under: "(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 part, for any tenant to sub-let 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, 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:Provided further that nothing in this section shall apply to a tenant having a right to enjoy any premises in perpetuity.(2) Any person who contravenes the provisions of sub-sec. (1), shall, on conviction, be punished with fine which may extend to one hundred rupees." 15. From these provisions, it would appear that except in cases covered by the two provisos to sub-sec. (1) of S. 23, there is a prohibition for a tenant to sub-let whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein. This prohibition is, however, subject to a contract to the contrary. A tenant who subjects or assigns or transfers the premises,in contravention of this prohibition loses the protection of law and can be evicted by the landlord under S. 21(1)(f). In the case of a statutory tenant, the relationship is not governed by contract. The prohibition against assignment and transfer is, therefore absolute and the interest of a statutory tenant can neither be assigned nor transferred. This means that the interest of the statutory tenant in the premises in his occupation, as governed by the Karnataka Rent Control Act is a limited interest which enables the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants family up to the death of the tenant and aperson continuing in possession after the termination of the tenancy in his favour, to inherit the interest of the tenant on his death. The said interest of the tenant is, however, not assignable or transferable and, therefore, the interest, of a company which is continuing in occupation of the premises as a statutory tenant by virtue of the protection conferred by the Karnataka Rent Control Act, cannot be regarded as property of the company for the purpose of sub-see. (1) of S. 22 of the Act and for that reason also the provisions of S. 22(1) were not attracted to the eviction proceedings institution by the respondents against the appellant company. The provisions of S. 22(1) did not, therefore, bar the prosecution of the said proceedings by the respondents and the order dated September 30, 1989 passed by the XII Additional Small Cause Judge, Bangalore allowing the eviction petition cannot be held to have been passed in contravention of the provisions of S. 22(1) of the Act. Civil Appeal No. 2553 of 1991 also, therefore, fails and is liable to be dismissed.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We are, therefore, of the opinion that the passing of the interim order dated February 21, 1991 by the Delhi High Court staying the operation of the order of the Appellate Authority dated January 7, 1991 does not have the effect of reviving the appeal which had been dismissed by the Appellate Authority by its order dated January 7, 1991 and it cannot be said that after February 21,991, the said appeal stood revived and was pending before the Appellate Authority. In that view of the matter, it cannot be said that any proceedings under the Act were pending before the Board or the Appellate Authority on the date of the passing of the order dated August 14, 1991 by the learned single Judge of the Karnataka High Court for winding up of the company or on November 6, 1991 when the Division Bench passed the order dismissing O.S.A. No. 16 of 1991 filed by the appellant company against the order of the learned single Judge dated August 14, 1991. Section 22(1) of the Act could not, therefore, be invoked and there was no impediment in the High Court dealing with the winding up petition filed by the respondents. This is the only question that has been canvassed in Civil Appeal No. 126 of 1992, directed against the order for winding up of the appellant company. The said appeal, therefore, fails and is liable to be dismissed.We are also unable to agree with the contention of the learned counsel for the appellant company that the leasehold interest of the appellant company in premises leased out to it is property for the purpose of Section 22(1). It is no doubt true that leasehold interest of the lessee in the premises leased out to him is property which can be transferred and the said interest can also be attached and sold by way of execution in satisfaction of a decree against a lessee. In that sense, it can be said that the leasehold interest of a company is its property. But the question is whether the same is true in respect of the interest of a company which is in occupation of the premises as statutory tenant by virtue of the protection conferred by the relevant rent law because in the instant case on the date of reference to the Board the proceedings for eviction of the appellant company were pending and the appellant company was in occupation of the premises only as a statutory tenant governed by the provisions of the Karnataka Rent Control Act. In Smt. Gian Devi Anand v. Jeevan Kumar, 1985 Supp (1) SCR 1, this Court has laid down that the termination of a contractual tenancy does not bring about a change in the status and legal position of the tenant .unless there are contrary provisions in the relevant Rent Act and the tenant, notwithstanding the termination of tenancy, does enjoy an estate or interest in the tenanted premises. It is further laid down that this interest or estate which the tenant continues to enjoy despite termination of the contractual tenancy creates a heritable interest in the absence of any provision to the contrary. This Court has also held that the legislature which by the Rent Act seeks to confer the benefit on the tenants and to afford protection against eviction, is perfectly competent to make appropriate provision regulating the nature of protection and the manner and extent of enjoyment of such tenancy rights after the termination of contractual tenancy of the tenant including the rights and the nature of protection of the heirs on the death of the tenant.14. In the instant case, we are concerned with the right of the tenant as governed by the Karnataka Rent Control Act. In Cl. (r) of S. 3, the expression "tenant" has been defined to include "the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants family after the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour". In view of Cl. (5) of the proviso to sub-sec. (1) of S. 21, protection against eviction is not available to a tenant who has "unlawfully sublet the whole or part of the premises or assigned or transferred in any other manner his interest therein and where the subletting, assignment or transfer has been made before the coming into operation of this part (except in respect of sub-letting, assignment or transfer to which the provisions of S. 61 are applicable), such sub-letting, assignment or transfer has been made contrary to any provision of law then in force.From these provisions, it would appear that except in cases covered by the two provisos to sub-sec. (1) of S. 23, there is a prohibition for a tenant to sub-let whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein. This prohibition is, however, subject to a contract to the contrary. A tenant who subjects or assigns or transfers the premises,in contravention of this prohibition loses the protection of law and can be evicted by the landlord under S. 21(1)(f). In the case of a statutory tenant, the relationship is not governed by contract. The prohibition against assignment and transfer is, therefore absolute and the interest of a statutory tenant can neither be assigned nor transferred. This means that the interest of the statutory tenant in the premises in his occupation, as governed by the Karnataka Rent Control Act is a limited interest which enables the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants family up to the death of the tenant and aperson continuing in possession after the termination of the tenancy in his favour, to inherit the interest of the tenant on his death. The said interest of the tenant is, however, not assignable or transferable and, therefore, the interest, of a company which is continuing in occupation of the premises as a statutory tenant by virtue of the protection conferred by the Karnataka Rent Control Act, cannot be regarded as property of the company for the purpose of sub-see. (1) of S. 22 of the Act and for that reason also the provisions of S. 22(1) were not attracted to the eviction proceedings institution by the respondents against the appellant company. The provisions of S. 22(1) did not, therefore, bar the prosecution of the said proceedings by the respondents and the order dated September 30, 1989 passed by the XII Additional Small Cause Judge, Bangalore allowing the eviction petition cannot be held to have been passed in contravention of the provisions of S. 22(1) of the Act. Civil Appeal No. 2553 of 1991 also, therefore, fails and is liable to be dismissed.